Selling out Online Advertising

by on May 13, 2008 · 35 comments

Reports have surfaced that Charter Communications, a mid-sized U.S. cable ISP, is monitoring its customers in partnership with NebuAd to deliver targeted advertisements. Luckily, Wayne Crews and I have a brand new C:Spin digesting the privacy implications of advertisers tracking our Web browsing:

Online ads can be annoying. From pop-ups to flash screens, it’s hard to surf the Web for long without encountering a sales pitch for an unwanted product. A world without these ads might be pleasant, of course, but then who would pay for all the original content websites make available?  Advertising explains why we can browse the Internet without pulling out our credit cards at every turn. But New York lawmakers are now considering a bill that would make this scenario a reality, spelling doom for the advertising models that could fuel the Internet’s future. 

Irked by pervasive advertising, some consumers see the Wild Wild Web as a realm warranting legislative assurances that all information stays private, hidden beyond the reach of marketers without explicit consent. They prefer that we opt-in, rather than opt-out.  

But an alternative interpretation of the nature of the cyberspace is that any advertiser may legitimately assemble information that has been transmitted on what is clearly a very public network.  

Even Wikipedia, long funded entirely by private donations, may soon have to place ads on its popular encyclopedic entries. All the server farms and fiber optic cables that power today’s Internet are not cheap, and somebody has to pay. Ad revenues indirectly fund many of the network upgrades needed to prepare for the ever-increasing stream of global Web traffic. And since advertisers are expected to tighten their belts as the global economy slows down, effective advertising models are more important than ever. If the Internet is to realize its full potential, firms must be free to develop experimental new methods of delivering ads. 

Increasingly, today’s “dumb” online advertisements are yielding to “smart,” behavioral ads.  By cataloguing individualized information about a user’s browsing tendencies, behavioral advertisers like Phorm and NebuAd can guess what sort of ads might interest that person, and select which product to promote accordingly.  In this model, advertisers don’t even have to record specific web addresses; rather, browsing habits are stored only under broad subject categories, like automobiles or golf. Sensitive websites like WebMD aren’t logged whatsoever. All this data is tied not to our names but to anonymous identifiers like cookies or IP address, which typically cannot be traced back to a particular individual except by court order.

We also discuss the inherently voluntary, user-driven nature of online advertising:

To some extent, advertising is already opt-in. Consumers are able to ignore ads, or download simple software to avoid them altogether. Ad-Block, a popular Firefox plug-in, now has over 2.5 million users, and myriad anonymity services make it easier than ever for concerned users to conceal their IP address. Arguably, the consumer-control ethos—the notion that we don’t have to be tracked—puts consumers, not advertisers, in the drivers’ seat on the Internet’s road ahead. Ultimately, ownership of the collective desktop rests with the user, not the company.

 Read the rest of the C:Spin over at CEI’s website.

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