Internet Marketing and Privacy
Expand All Guide SectionsOffline Consumer Targeting
For how long have offline marketers have been collecting data on consumers ? The Consumer Data Industry Association was formed more than a century ago. And marketers have been assembling electronic databases to track consumer interests since the 1960s. Nowadays, a many of your commercial transactions are recorded in a database somewhere. Your phone company keeps track of every telephone call you make, and uses your calling activity to market new calling plans and services to you. Credit card companies keep track of your charging activity, and use it to decide what marketing inserts to stuff into your monthly bill envelope. Hundreds of direct marketing companies gather information about your purchases, subscriptions, sweepstakes entries, and every other form you complete to determine what junk mail to send you. And almost everyone to whom you make a payment notifies credit reporting bureaus about your payment habits.
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- Traditional companies of all different types collect detailed information on your personal spending habits. Every time you make a purchase you leave a trail of some type. This information can be collected using methods such as supermarket or pharmacy frequent shopper cards, credit card spending reports or airline ticket purchasing habits.
- The collecting companies often sell this customer data to third parties marketing firms such as Claritas, Donnelly Marketing, Experian, Equifax and R.L. Polk. These third parties then use your personal spending information, combined with your demographics to build a complete profile of you, to better target advertising on behalf of their clients.
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Online Advertising Technology
The world of online privacy can often seem overwhelming. Privacy policies written in “legalese,” along with complicated, ever-evolving Web technologies, make it difficult for the average consumer to understand how online advertising operates.
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- Targeted online advertising is mainly conducted through “cookie” technology. Upon visiting any mainstream Web site, a small text file called a “cookie” is deposited on your computer. When you come back to this site at another time, the site recognizes your cookie, and can customize the page to fit your browsing habits.
- Cookies are how sites such as Amazon.com “remember” your account name whenever you visit. Web publishers also often allow “third-party” advertisers to place cookies on your computer that collect information such as your IP address.
- Cookies allow advertisers to target you based on the characteristics and habits of other Internet users. This targeting can be based on the Web sites you visit or links you click (behavioral targeting), the type of content on the Web site you are visiting (contextual targeting) or what you have typed into a search engine (keyword targeting).
- While consumers have very little control over most offline consumer tracking activities, in many instances, a consumer can "opt out" of online tracking and ad targeting. Many privacy advocates argue for an "opt-in" standard, but Internet users are notorious for passively accepting "default" settings, and any endeavor that requires an affirmative response is unlikely to succeed.
- Targeted advertisements generate more revenue than untargeted advertisements. Because the vast majority of Web content is advertising-supported, Web site owners argue that targeted advertising increases the resources that can be devoted to creating Web site content.
- While many companies state that they do not share the data they collect with third parties, the fact is that, with very few exceptions, any data collected about you anywhere, offline or online, has to be handed over to law enforcement authorities or even to an adverse party in a lawsuit, if a valid subpoena is presented to the data owner. Further, the security of any data is only as good as the humans responsible for keeping it secure.
- For a primer on Internet privacy and safety, visit the findingDulcinea Internet Security Web Guide.
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Third-Party Advertising
Most advertisements on the Web are not served or sold by the sites you see hosting them, but by third-party advertisers. These companies work with Web site publishers to provide the infrastructure technology behind the advertising and often sell advertising on the publisher’s behalf.
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- At its core, the values of the NAI can be described as “notice and choice.” NAI companies disclose exactly the type of information that they are collecting on you (especially the key difference of whether it is personally or non-personally identifiable information) and then give you the option to opt-out.
- An area of online advertising to be wary of is “lead generation” advertising. These ads, consisting of flashing banners promising items such as a “free iPod!” are from non-NAI advertising companies. They often don’t disclose the items you must sign up for to receive the gift in question, and your personal data isn’t secure on these sites. Avoid using them completely.
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Social Networking Sites and Advertising
Every day millions of Americans freely list personal details of their lives on social networking sites such as MySpace and Facebook. All of this potentially available information is an advertiser’s dream, and big business for social networking companies. But these sites and their advertisers must walk a fine line between advertising based on their users’ profiles and violating their users’ privacy rights.
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- Myspace and Facebook both plan to target advertising based on information provided by users in their profiles. This potentially includes information ranging from your taste in movies or books to your sexual orientation and relationship status. The New York Times provides a description of MySpace’s plan and the Wall Street Journal has one of Facebook’s.
- These programs and other forms of targeted advertising face potential backlashes from the vast user-bases of the social networking sites. Ironically, sites like MySpace and Facebook provide the ideal social tools for organizing consumer resistance to harmful advertising.
- For tips on safely using social networking Web sites, visit the findingDulcinea Social Networking Web Guide.
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Search Engines and Advertising
Perhaps just as much as they do with social networks, Internet users potentially reveal private details of their lives through the online searches that they conduct. How the different search engines use (or don’t use) this data is essential to understanding the privacy concerns raised.
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- Search engines make money almost completely through advertising. Advertisers pay the engines to appear on search results pages when certain keywords they have paid for are searched. These advertisements, not natural algorithmic results, are usually labeled “sponsored links” or “sponsor results.”
- Most major search engines may keep track of the searches you enter. If you have a tool bar, email address or other account with a search engine, your search and browsing history will be keyed to the account. If you do not have a tool bar or account, your history may be tied to a cookie on your Web browser. Most search engines explain their practices, and tell you how to opt-out of them if you wish, in their privacy policy or FAQ.
- There are three key factors in determining a search engine’s privacy practices: data retention length, how that data is deleted and whether such data can be tied to an individual user. CNET News.com breaks down how each major search engine fares on these points.
- For advice on which search engines to use, and how to use them effectively, visit the findingDulcinea Guide to Web Search.
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The Future of Internet Privacy
As the future takes shape, there will no doubt be more companies that cross the line in trying to take advantage of user privacy. The most powerful tool against these companies may not be government regulations, which are slow to react to technological innovations. Instead, the Internet, by its inherently social nature, empowers consumers to quickly organize against malicious privacy practices and force companies to respond.
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- With Internet users more concerned with their privacy than ever, privacy itself has become a commodity for Web service companies to sell themselves on. This has created market competition between companies to offer consumers the best privacy services. Ask.com provides an example of a search engine hedging its business on offering better privacy services than its competitors.
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