Web Sites Capture Personal Data For Targeted Ads

While Internet advertising practices have raised the hackles of privacy advocates for years, recent data gathered in a study from Internet measurement firm comScore, commissioned on behalf of The New York Times, found that the prevalence of targeted advertising is more widespread than previously thought.

The comScore study focused on five online "data collection events" for 15 media firms: pages displayed, search queries entered, videos played, advertising displayed, and ads served on pages anywhere on the Web by advertising networks owned by the media companies, the Times said.

The results of those actions are gathered by online advertising companies. In turn, the collected information is sold to businesses looking to zero in on specific potential customers and increase the likelihood that the user will want to buy what's being peddled.

The practice is not likely to go away. Online advertising is big business: according to a February 2008 report from the Interactive Advertising Bureau and PricewaterhouseCoopers, online advertising revenues for 2007 are estimated to reach $21.1 billion, a 25 percent increase over the previous revenue record of nearly $16.9 billion for full-year 2006. Fourth quarter 2007 revenues totaled roughly $5.9 billion, making it the highest quarter ever reported and representing a 13 percent rise over the third quarter of 2007 and a 24 percent increase over the fourth quarter of 2006.

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It should be noted that the IAB represents more than 375 interactive companies that engage in and support interactive advertising. IAB members are responsible for selling over 86 percent of online advertising in the U.S. and one of its initiatives includes "fending off adverse legislation and regulation."

Even with growing privacy concerns, the Times noted that not all of the collected data is kept by companies who have access to it, much of it can't be traced to individual users, and in fact, not all of the data is useful. The question of targeted advertising brings up another question: how do you filter the Internet?

"You can only filter so much and then the Internet becomes unusable -- you will filter yourself right out of the Internet," said Tom Derosier, a systems builder and owner of CPU Guys in Hanson, Mass.

Derosier sees the issue from different angles. On the one hand, he might deal with a corporate customer who wants him to build a firewall to block sites from employees. He might also see a client who needs a program like NetNanny to block unsuitable material from children. Or he could have a customer looking to increase margins from targeted advertising.

"Any time you give out information, you're giving material for companies to increase their revenue," Derosier said. "If you're my customer and you want to block advertisements about home mortgages, you're giving me that information. It's what people on other end do with that information, some kind of balance."

"We're all on the same Internet, so how can you try to filter something that was designed to be open in the first place? You can't make a penny out of a dollar."