Should companies tell consumers when their net usage is being tracked?

In November, 2006, the Center for Digital Democracy and the U.S. Public Interest Research Group filed a hefty complaint with the FTC, claiming that some techniques used by behavioral ad networks were unfair and deceptive marketing activities.

by Helen Leggatt

Many consumers are unaware of their preferences being tracked online. Behavioral ads, of which around an estimated third are video-based, place a cookie on the consumer’s computer, which then tracks where the user goes and what the user buys online. Future ads are then tailored to that consumer’s interests and buying history.

But with the spend on behavioral ads estimated to be $1.5 billion in 2007, rising to more than $2 billion in 2008, big marketing networks such as Tacoda, BlueLithium and Revenue Science are defending the ethics of their targeting ability. Some sites, such as Tacoma and Doubleclick, are utilizing the Network Advertising Initiatives Opt Out tool, which enables consumers to "opt out" of targeted advertising delivered by these networks. While it doesn’t prevent consumers from receiving online advertising, it does ensure that no ads presented are as a result of preference and usage patterns.

Perhaps if consumers were given the choice of whether to receive random, non-personalized ads as opposed to relevant, targeted ads the behavioral model might take off. It’s the sneaky way in which the cookies are placed on computers that many won’t tolerate.

"There's nothing wrong with serving an ad targeted to what users are interested in," says Jeff Chester, the CDD's executive director (via PCWorld). "But you need to tell consumers exactly what you're doing and get their permission before you follow them from site to site."