Behavior Advertising Strategy on Web Under Scrutiny

Published November 1, 2009

The targeting of Internet advertising based on an individual’s browsing behavior has come under increasing attack by privacy advocates who argue practices such as behavioral tracking are ripe for abuse.

A coalition of consumer and Internet rights groups in early September wrote a joint open letter to the U.S. House Committee on Energy and Commerce raising concerns about behavioral tracking. The group provided an outline of proposed regulatory rules they believe should be enforced to protect consumers.

Free Content vs. Privacy

Although behavioral advertising increases ad value and helps pay for the rich system of free content and services that users enjoy on the Internet, the signatories of the open letter say behavioral tracking has created a gray area where traditional privacy protections are absent. They are calling for lawmakers to modernize privacy laws in response.

The coalition—which includes the Electronic Frontier Foundation (EFF), Center for Digital Democracy, Privacy Rights Clearinghouse, Consumers Union, and other groups—offers a broad set of policy recommendations. They suggest tracking should be limited and should not be permitted to extend to collection of “sensitive” information such as data pertaining to finances, political affiliation, sexual orientation, or ethnicity.

Tracking the Trackers

Companies should be required to document the purpose for which they are collecting the data and should not be permitted to keep it for longer than is necessary to fulfill that purpose, the letter says. The proposal also calls for new rules to govern data disclosure.

The signers want users to be notified up front about how collected information will be shared with third parties. In the event a company wants to share the information in additional ways, the privacy advocates say explicit consent should be obtained from the user.

Striking a Balance

There is a careful balance here between privacy and legitimate market research and advertising, but it is a balance that the market, not the government, should work out, says Scott Testa, a professor of business administration at Cabrini College, Philadelphia.
“Whenever the government gets involved, it isn’t a good idea,” Testa said. “For the government to get involved is so crazy. There are so many social and economic issues to deal with.

“That they are even inquiring about this issue is ludicrous,” Testa added. “The government should give the consumer credit once in a while.”

Industry Self-Regulating

Dave Stein, chief technology officer for Burst Media in Burlington, Massachusetts, an online advertising company, said the Web advertising industry is already taking steps to ensure consumers’ privacy is protected.

“The industry is doing a lot of things to address these issues,” Stein said. “We have a ‘network advertising initiative’ with rules embedded in ads about the type of information that can be collected.

“We are establishing ways that we can be more transparent to the consumer about what we are doing,” Stein added. “We have ways to opt out of advertising at our own Web site,”

Personal Info Not Wanted

Companies do not collect personally identifiable information, Stein says, adding government does not need to impose new laws to prevent it.

“There are already a lot of laws that are out there that protect the consumers,” Stein said. “Consumer groups are seeking constant improvement of these rules, but industry self-policing is the best method.

“Imposing too much government regulation—with the inevitable costs—would drive a lot of the small firms in the industry out of business,” Stein said.

Opting Out

Stein says “the industry is doing quite a bit” to respond to market pressure for privacy, including informing Web surfers they can opt out of behavior advertising. Responsible and successful companies, he said, establish ways to be more transparent to the user.

“Establishing a policy of affirmative consent is easy to do,” Stein said.

Phil Britt ([email protected]) writes from South Holland, Illinois.