Behavior-based Internet Advertising: Who is Watching You?

The fact is, it almost certainly wasn't a coincidence. Behavior-based Internet advertising is a relatively new and very powerful way for advertisers to get their message in front of potential buyers that they know to be qualified. The question is, how do they know that the surfer is qualified?

The advertisers know this because the Internet advertising network is tracking the surfers' online activity. With tracking, advertisers know what sites you like. They know what searches you make. They have profiled you, and, unlike in real life, profiling on the web is AOK -- so far.

Check Your Computer for Cookies

Before we get into the legal issues involved, perhaps a further definition of the technology is in order. Most (but not all) behavioral Internet advertising is based on computer "cookies." These computer cookies are tiny files that are placed on your machine when you visit certain websites. In the simplest form, you go to a web page. An advertiser has a blank spot, or placeholder, for a banner ad. But instead of serving up just any banner ad, the advertiser parses through your computer for cookies to discover your likes and dislikes, and then you are fed Internet advertising based on your online behavior.

For some people, this is no big deal. They like Internet advertising to be targeted toward them, and they don't mind computer cookies. For others, it's a little Orwellian and creepy. This leads us to the great debate.

Opt-in or Opt-out?

One big question to be resolved is whether ultimately this type of Internet advertising will be "opt-in" (meaning that a user has to sign up in order to receive targeted ads) or "opt-out" (meaning that a user will receive targeted ads unless they specifically ask not to).

It shouldn't surprise anyone to know which side the advertisers are on. If governmental regulators eventually require that all Internet advertising be "opt-in", the industry will be severely restricted. My guess is that it would relegate behavior-based Internet advertising to a fringe player in the online marketing world.

The privacy advocates, naturally, are on the other side of the fence. The vast majority of people assume that their online activity is not being tracked, they say. Why should they have to take a specific action in order to remove computer cookies and to not be tracked and profiled?

A Do Not Track List?

Recently, a group of nine consumer advocate groups proposed the idea of a "Do Not Track" list for Internet advertising, which would work in a similar fashion as the "Do Not Call" list works today. Naturally, this is an "Opt-out" scenario, but because of the attention that the formation of such a list would bring, it may be a suitable compromise between advertiser and advocate.

How to Prevent Being Tracked

It is fairly easy to prevent being tracked by advertisers. You simply prevent your machine from accepting computer cookies. Go to START, SETTINGS, CONTROL PANEL and click on INTERNET OPTIONS then the PRIVACY tab. (Note that these instructions assume you are working with a Windows XP system. The procedure will be similar, however, for other operating systems.) Slide the bar all the way to the top to where it says "Block All Cookies."

However, you should be aware that this change may limit your Internet experience. Some websites will not display properly (or at all) if you do not accept computer cookies. In my experience, at least one of the top five search engines will not work at all. Other engines have limited functionality when you block Internet advertising.

Even if you do manage to turn off your computer cookies, don't rest easy just yet.

The Newest Technology

Recently, it was announced that a Silicon Valley startup named NebuAd has created a new technology that does not require computer cookies. Under the NebuAd model, the company teams up directly with service providers and installs equipment directly at their facilities that allows them to track the behavior of individuals on the web, even if their machine does not accept computer cookies. This, of course, requires Internet Service Providers (ISPs) to embrace the new technology; naturally, they are given a piece of the Internet advertising revenue that is generated. Whether or not any of the major players embrace this technology will probably depend largely on public outcry, or lack thereof. Of course, if this does become the newest behavioral targeting standard, we will return again to the question of "Opt-in" or "Opt-out."

Conclusion

The future of this approach to Internet advertising is unclear, and will depend largely on public education and reaction. Will people see value in receiving targeted ads, even if it means that somewhere there is an "anonymous" profile of them sitting on a server? Will they feel outraged and push for a total ban? It's hard to say.

Will this new approach be the death of the Internet as we know it? Probably not. But it should at least be interesting.