Internet Advertising, Tracking, and Privacy

Posted: December 9, 2011 by jrop in Jonathan

By Jonathan Apodaca

    In our Internet age, it is only natural that many people are spending more and more time inside their web browsers as more free products are offered online.  Recent surveys show that the average American spends over twelve hours per week on the Internet — the same amount that those same people spend watching television (Indvik).  The Ad supported Internet accounts for over two percent of the “total U.S. domestic product” (iab.).  It is a well known fact that ads support many free products that consumers enjoy.  The infamous television commercial is the prime example of this.

    My favorite example of a company that offers primarily free online products is Google.  Strictly speaking, Google is an advertising company (Golson).  With online products, the Internet brings a whole new dimension to the table: tracking.  As we will investigate throughout this piece, tracking is an advertiser’s dream.

    Since the beginning of ad-supported products, means of finding out who is in the consumer audience has been well sought after (Webster and Phalen).  This is termed “audience measurement.”  Audience measurement proved extremely important to early local television producers in order to keep the attention of their audiences (Montopoli).  How else do you keep the attention of your audience unless you know who your potential consumer is?  This proved to be an interesting problem — one that saw many creative solutions: from advertisers giving out coupons to merely measure response, to simply requesting the audience to keep “diaries”.  To illustrate, the situation here is relatively simple: imagine you are attempting to offer an ad-supported product.  In order to continue to make your product available, and continue to profit from it, you must keep those who are paying you to advertise their products happy.  How do they stay happy?  Simply put, advertisers are most satisfied when their promotions not only reach a large user-base, but more importantly, they reach a relevant user-base where the advertisement will convert into purchases, subscriptions, etc.  Therefore, you would do well to find out who your (and thus, the advertisers’) audience is.

    Google, for example, has this concept down pat.  As established earlier, Google is an advertisement company that obtains the majority of its profit revenue from advertisements.  One (relatively) cheap way that Google can take audience measurement is by tying its users activities to accounts.  Also, while maintaining ties to user accounts, Google offers a number of free products, of which include: Search, Gmail, Docs, Voice, Maps, Earth, Bookmarks, Chrome, YouTube, Music, Google+, etc.  The list goes on and on — not to mention that this monolithic company develops the Android operating system.  As mentioned before, Google is my favorite example to use as an advertisement company that utilizes effective audience measurement techniques.  Why?  Because Google puts out products that get into many areas of life that are regularly frequented by modern Americans.  That is, if one registers for an account with Google, Google presents them with products that are likely to be appealing for many areas pertinent to the modern American’s lifestyle and habits.

    To really drive this point home, take a break here and watch these two videos produced by Google: 1) Google’s Ads Preferences Manager, and 2) Better Ads in Gmail.

    So what did you think?  Let me just remark that on Google’s “Opt-out” page for personalized advertisements (it can be accessed with this link when logged in with your Google account), they openly state that those users that opt-in to allow Google to use additional information from your account to serve up personalized ads are “40% more likely to click on ads than opted-out users.”  Let’s translate that last sentence to say what Google hears from it: “Users that opt-in to allow Google to use additional information from their account to serve up personalized ads are 40% more likely to click on ads — and therefore 40% more likely to generate revenue for Google — than opted-out users.”

    To be specific, what Google is doing in this case is a specialized form of audience measurement, that has earned the term “behavioral targeting”.  Behavioral targeting differs from audience measurement in the following way: instead of merely measuring demographics, as audience measurement tends to do, behavioral targeting measures users’ personalities and tendencies.  By having this information, or the user’s individual behavior profile, advertisers have much more information in order to serve up personalized content targeted for each individual.  For more information about behavioral targeting, try this article by Deschene that outlines why it is a dream for online marketers.  But behavioral targeting, while marketing and advertisement companies are in heaven with this technology, has concerns with end users.

    When talking about behavioral targeting, one could make a case that the audience in discussion loses generality.  That is, because advertisement targeting specifically aims at the individual, almost all sense of a general audience is lost.  Also, when talking about behavioral targeting, because much more emphasis is placed on individual characteristics, a certain amount of privacy is lost by that individual.  The majority of end users are concerned with privacy issues on the Internet (Deschene).  However, there is one slightly comforting caveat: although behavioral targeting does usually in fact track you as an individual on the Internet, your Internet identity will differ from your real-world identity in one way or another (Dwyer).  That is, with respect to tracking on the Internet, “you”, when you are tracked, does not necessarily consist of your name, age, birthday, address, etc.  You could think of your Internet “you” as a number that advertisers assign to you (or your web browser), and then that number-“you” is tracked behaviorally.

    Some readers might take that last piece of information and say that because the Internet “you” is different from the real “you”, there really is no issue here.  However, while that is somewhat comforting, I don’t think that I am going out on a limb when I say that it would not be hard to tie that number-“you” to your real identity.  One word drives the point home: Facebook.  In fact, Facebook is centering its advertisement success around individuals (Hof).  Facebook is probably the closest tie to the real “you” that an Internet “you” can get (although from a sociological standpoint this is not the case, from a security standpoint, it is).

    There is a problem surrounding this situation: according to a 2009 study by TRUSTe, while 69% of users are aware that online activity may be tracked, this leaves 31% of users that are not aware that this is happening.  It is good that the majority of Internet users are aware of tracking schemes, yet 31% is a significant fraction of those users who are not aware of such an important issue.  There is only one solution that can address this problem: greater awareness needs to be raised so that that last 31% of users are not left in the dark to be put in potentially dangerous situations on the Internet.  One notable website that is attempting to remedy this is the Network Advertising Initiative (NAI) (of which Google is a member).

    Now, some folks might say, “Hey. The majority of users are aware (69% vs. 31% isn’t bad).”   However, the majority is not always acceptable — especially in this case.  Furthermore, much more research needs to be done in this area: what is the nature of users in the last 31% who are unaware of modern tracking techniques?  How could this negatively affect their Internet experience?  We shouldn’t be satisfied until everyone is aware of tracking techniques so that they can effectively and efficiently manage and secure their online identity.

    One other change that needs to happen is that online advertisers need to be forced to honor opt-out initiatives taken by users.  One such initiative is the previously mentioned NAI.  Also, Mozilla, the developer and maintainer of Firefox — one of the top competing web browsers — has added functionality to its browser in order to attempt to add a universal component to the web that would enable users to notify any and all sites that they visit that they do not wish to be tracked.  Even if this concept gets standardized, which it looks like it might, regulations need to be in place in order to enforce that advertisers honor users’ requests not to be tracked.

    Furthermore, there is evidence that web sites which are members of the NAI that offer a feature for users to opt-out of participating in behavioral targeting in effect disregard their users’ wishes anyway (The Register).  While the NAI is a noble effort, the fact that some sites do not comply to its agreements renders it far less useful than it could be to end users.  One possible solution to this is that regulations could be imposed on advertising companies that prohibit them from continuing behavioral targeting with users who have opted out of the feature.

    I have opted-in for the time being to many of the behavioral targeting in place on many websites that offer free products.  However, I would like the comfort of knowing that at any time I could opt-out, and these companies would honor my choice.  Online advertisers need some kind of incentive or prohibition in place to limit advertisers use of such technology within users’ consent.

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