Ad Trackers Are Prying In New Ways — But Is That A Problem For Consumers?

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Behavioral targeting has been moving beyond the “cookie” — the file code that is placed on a user’s computer when they visit a website — to include tools that can determine what consumers are viewing on a particular site in real time, as well as pinpoint location, household income, buying habits and medical history. To get a glimpse of how prevalent these new tracking technologies are, the WSJ took a look at some of the most popular websites and has concluded that advertisers’ potential reach and knowledge into internet surfers’ lives are deep and pervasive — and often without users’ knowledge or permission. The subtext of the article, which is the first of a series, is that BT (NYSE: BT) is a problem, which, naturally, sparked a debate on Twitter shortly after being posted on Saturday.

It’s generally a given that everyone’s movements online are monitored in some way. And that has increasingly brought calls from a wide range of activists for stricter legislation. Meanwhile, the industry, led by the Interactive Advertising Bureau, has desperately sought to keep the current self-policing regime in place by promising greater disclosure by its members. But until there’s a clearer sense on the part of what the public accepts and doesn’t, the status quo will remain uncertain.

The WSJ item, based on on interviews with individuals and its own “test computer,” does contain an interesting snapshot of what exactly is being accessed by the top websites. Among its findings:

— The top 50 U.S. websites had an average of 64 pieces of tracking technology embedded on them. About a dozen sites each had more than a hundred. (Wikipedia, a non-profit which doesn’t run ads, had no tracking tools on its site).

— Collectively, the top 50 sites had 3,180 tracking files in total on the WSJ’s test computer. About a third were non-intrusive, such as cookies that remember the password to a favorite site or arrange most-popular articles. The rest of the tracking tools — 2,224 in all — were installed by 131 companies, many of whom sell the data for targeting.

— In ’09, the average CPM of a targeted ad was $4.12 versus $1.98 CPMs for an untargeted ad.

— An ongoing study by AT&T (NYSE: T) Labs and Worcester Polytechnic Institute found tracking technology on 80 percent of 1,000 popular sites last fall, up from 40 percent of those sites in ’05.

The WSJ article opens with a portrait of an average internet user, and offers various details about her usage and interests after the newspaper sends the ID on a cookie to social media monitor Lotame. In a statement on Lotame’s blog, the company insists that it never knew that user

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chesterj1

The Wall Street Journal deserves praise for peeling back the online data collection, profiling, and targeting `complex’ that has been created without significant public debate and policy oversight. The series underscores what privacy and consumer groups have been telling policymakers: that policy safeguards are required that ensures privacy, protects consumers, but also allows e-commerce to grow. What the online marketing industry has done to create a largely stealth and out-of-control personalized data collection and targeting “ecosystem” has been irresponsible. It’s time now for wiser online marketing leaders to recognize they have to transform their business model –so that its “ecosystem” is sustainable and promotes democracy.

xioajiao

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