By: Brandy Worden, CLASS Co-President, 2010-11
Contact: president@consumerlawstudents.com
You may have noticed that increasingly, the ads you view on your web browser are directly linked to your interests. This is accomplished through targeted advertising. The Federal Trade Commission is mulling around the idea of creating a “Do Not Call List” equivalent for internet cookie tracking, the powerhouse to targeted online advertising.
To understand how advertising companies are getting the inside scoop on your cyber life, requires an understanding of cookies. This is not to suggest that companies coax personal information from you with baked goods. Rather, a cookie in this context is a file sent from a web server to a user's computer for the purpose of identifying the activities of the user.
When you request a Web site by typing it into the address bar, the Web site recognizes the IP address to know where to direct the information. Web sites create affiliate relationships with cookie tracker companies with whom they share what IP address is calling from that site. This enables trackers to assign a unique identifier number so logged activity can be attributed to the use of a specific IP address.
The cookies are designed in one of two forms. The cookie is either a session cookie that “is deleted when the browsing session ends,” or a persistent cookie that “remains in the hard drive after the even after the session ends.” The persitent cookie tracking maps our behavioral patterns as expressed in our browsing habits across the numerous web sites a user visits. With this information, the advertising company can build user profiles.
An example of a company using this profiling technique is [x+1]. They opt to assign user identifier numbers, based on IP addresses, to the cookies and then uses the unique user profiles to classify the user according to a spectrum of sixty-six Neilson segments. The Neilson segments attempt to profile the user by such estimating characteristics as geographic location, likely income, and education levels based on the user’s browsing history. For example, the “White Picket Fences” segment consists of people who “live in small cities, have a median household income of $53,901, are 25 to 44 years old with kids, work in white-collar or service jobs, generally own their own home, and have some college education.”
Privacy advocates have been for years advocating for increased privacy protection and transparency in this practice. Proponents of these changes are concerned because surveys indicate the majority of Americans are not even aware that cookie tracking is happening. Further, while advertising companies claim anonymity, individuals in the past have been identified using cookie tracking.
Should the FTC’s proposal come into effect, it is initially stated to apply only as a best-practices guide for companies. The guide would permit tracking along a single site (example: Amazon referencing your previous purchases to make shopping suggestions while you browse Amazon), but would discourage inter site tracking by third-party advertising companies if a user opted out.
Opponents to this proposal warn that reducing online advertising revenues by restricting profiling practices could lead to a decline in free online content.
