With respect, this sounds a little like when Snowden broke, and the NSA said "besides, it's just metadata."
Before I blocked ads, ads would follow me around. The information to do that was collected, and possibly sold, probably not by my ISP. It wasn't "my browser history," but it was as a result of my browsing activity.
This news has thrown around "your browsing history," which is at once sensationalist (because, as you point out, no one is selling that) and obfuscating, because someone is collecting and selling data that comes from browsing activity.
Ads following you around (retargeting) can sometimes be creepy, but no one had to buy and sell your browsing history to get there.
It is entirely a by-product of the fact that ad slots are auctioned off while a page loads, and when someone wins that auction, they can run JavaScript in your browser.
So if they cookie you on their website, then they get to run JavaScript from winning an ad auction on a different site, they can still see their cookies and know it is "you".
Not trying to downplay any privacy implications here, but ad networks and sites where ads are placed don't actually need any of your browsing history to make this work.
(I simplified this somewhat by ignoring the relationship between the actual advertisers and retargeting providers, but that is just more of an economies of scale/arbitrage thing.)
Not an adtech guy... do they actually buy ad slots just hoping that they manage to get someone they can retarget? Or do they know who you are pre-auction so they can bid higher? Just shooting from the hip I would guess the latter is more likely, which means the ad networks would have to have a list of user id, page/product pairs, which sounds a lot like your web history to me.
They know when they bid. The easiest way to think of it is that they check your cookies and have a few milliseconds to decide how much to bid. Whoever wins pays and gets the slot.
They aren't using your web history specifically, because it's actually pretty hard to do a good job inferring things about you in the few milliseconds you have to make a bid. Instead, there are multi-billion dollar companies including Google and Facebook who do the intetpreting for you and sort of offer a taxonomy of audience groups for you to choose from.
So the cookie check at bid time is usually asking one of these middlemen data processing companies for their read on you, which is derived from your browsing history or your Facebook post contents or even what you write in Gmail.
Only thing I'd add is that there are many heuristics for deciding how valuable you are as a pair of eyes. Retargeting is about getting an ad to follow you around the internet. But there's also geographical and demographic targeting, which depends on the advertiser having a hypothesis about which target audience is worth engaging.
There is plenty of material online explaining how all of this works, but you will have a lot of trouble finding primary sources from the companies themselves because they hide it behind "contact us for more information" gateways.
That said, here are a few terms to search as a starting point:
* Ad exchange
* Real time bidding
* Search retargeting
* Data management platform
* Demand side platform
Here are some product names:
* Doubleclick Bid Manager
* Google tag manager
* Google AdX
* Adobe Media Optimizer
And some companies to look up:
* AppNexus
* Bluekai
* Excelate
* Celtra
Finally, I'd set up your own AdWords and Facebook advertiser accounts to play around.
The only thing I would add is that it's more than just browsing data. The data the ISPs sell might get cross-corellated with online purchase histories, search terms, etc.
Right now your "data persona" is mostly obfuscated by market fragmentation and the fact that advertisers wouldn't know what to do with all of the data if they had it. As someone on the "inside", the AI push scares me because it will make actually reconciling all of the disparate data sources both feasible and profitable.
Before I blocked ads, ads would follow me around. The information to do that was collected, and possibly sold, probably not by my ISP. It wasn't "my browser history," but it was as a result of my browsing activity.
This news has thrown around "your browsing history," which is at once sensationalist (because, as you point out, no one is selling that) and obfuscating, because someone is collecting and selling data that comes from browsing activity.