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Cable operators will sit in the hot seat Thursday as Congress reviews their plans to roll out targeted advertising amid fears that consumer privacy could be infringed if the companies were to track and record viewing habits. The House subcommittee on Communications, Technology and the Internet will hold a hearing that will look at new uses for digital set-top boxes, the devices that control channels and perform other tasks on the TV screen. Cable TV companies plan to use such boxes to collect data and direct ads more targeted to individual preferences. "We have recently called on Congress and the Federal Trade Commission to investigate cable's new interactive targeted TV ad system on both antitrust and privacy grounds," said Jeff Chester, executive director of the Center for Digital Democracy. He's concerned about Canoe Ventures, a consortium formed by the nation's six largest cable companies to oversee the rollout of targeted and interactive ads nationally. Chester worries that Canoe will track what consumers do in their homes. Currently, cable companies aim their ads based strictly on geography. Now, cable's goal is to take the Internet's success with targeted ads and transfer that to the TV medium. Thus, a household that watches a lot of Nickelodeon and the Disney Channel eventually could be targeted for theme parks promotions. This type of targeting is something broadcast TV can't do. For starters, Canoe plans to offer ads this summer that consider demographic factors such as age and income. Philadelphia-based Comcast Corp. and Cablevision Systems Corp. of Bethpage, N.Y., also have been testing or rolling out targeted ads outside the consortium. But cable operators are wary about being seen as trampling on consumer privacy and reiterate that they don't plan to target based on any personally identifiable information, such as someone's name and address. Canoe said it doesn't have plans this year to use set-top box data for ads. Instead, the first ads it pl

"The ubiquity of online advertising is a product of its importance to the internet economy, said a group of consumer advocates Wednesday during a debate on the future of online advertising. But the impact of new targeted advertising methods on consumer privacy and its potential to manipulate online experiences was the subject of heated argument at the event, sponsored by the Information Technology and Innovation Foundation. Privacy does not mean the same thing to all consumers in all situations, said Progress and Freedom Foundation Senior Fellow Berin Szoka. Advertisements are attempts to capture user attention - the "great currency of the Internet" - and when successful support a wide range of valuable content, he said. But in online life, "consumers have many values," Szoka added. "Privacy is one of them," he said, but it is not an absolute. Consumers must sometimes trade privacy for content, he said. "There is no free lunch." As more information and entertainment migrates to the internet, Szoka said it is "critical…that we find a way to support this media." Targeted advertising can fit the bill, he suggested - especially if technology gives users more control over their own preferences. Most consumers don't understand that advertising is a necessity for today's internet, he said. New technologies like targeting need to be given a try, he said, so content providers can recoup the value of their advertising - down 25 percent since 2000, he noted. Center for Digital Democracy founder Jeff Chester said Szoka's ideas about advertising's future represented a "false dichotomy." The real debate should be over the rules that regulate advertiser content, he said. Chester warned of a "Targeting 2.0″ system in which neuroscience combined with massive databases not only serve ads, but target content to users. "It's about influencing our behavior without our consent," he said. Chester pointed to the subprime lending cr

As online shopping becomes a greater force each year, the behavior of online shoppers becomes more and more scrutinized. Ad net AudienceScience, a key scrutinizer, announced today the findings of a commissioned study conducted on its behalf by JupiterResearch designed to measure the receptiveness of online shoppers to behavioral targeting. And the survey says: They like it -- at least that they are more responsive to ads that are behaviorally targeted than those that are contextually targeted. And they were pretty clear about it, with 65 % responding that they are more receptive to BT, and only 35% saying they paid more attention to contextual ads. "Since its inception, behavioral targeting has been an evolution of contextual advertising, and these findings are testament to its power to more effectively engage with consumers on their own level," said Marla R. Schimke, VP of Marketing, AudienceScience. "If we conduct the same study in a year, five years, ten years, I believe we'll see this already substantial gap between the two continue to widen as more and more brands and marketers realize that they can use behavioral targeting to specifically target their ideal customer."

As the impact of digital advertising on consumer privacy comes under scrutiny, AT&T is taking a stance in support of stricter standards. Rep. Rick Boucher (D., Va.), chairman of the subcommittee, said in an interview Wednesday that a statute is needed to regulate how companies collect, share and use data on consumers' behavior in targeting online advertising. While ad targeting on the Web has been at the forefront of privacy advocates' concerns, worries are growing about other media, ranging from mobile phones to emerging TV technologies. To sell marketers targeted ads, technology and media companies collect data about customers, ranging from the Web sites they visit to the neighborhoods they live in to the TV shows they watch. Marketers often will pay a premium for this form of advertising because it allows them to show their ads to consumers who are likelier to buy their products or services. "Pitfalls arise because behavioral advertising in its current forms is largely invisible to consumers," says Dorothy Attwood, AT&T's senior vice president of public policy and chief privacy officer, in prepared testimony she is expected to deliver at the hearing of the House Subcommittee on Communications, Technology and the Internet. Her statement says consumers don't fully understand that their online activity is used to create detailed profiles of them. Internet and other media companies say the data they use to target ads are anonymous and can't be traced to individual consumers. AT&T plans to argue that consumers should have "full and complete" notice of what information is collected about them and how it is used and protected, and should have tools that let them determine whether their Web activities are being tracked. The company says it won't use consumer information for online behavioral advertising unless it first obtains consent from the consumers involved. AT&T's stance contrasts with the position taken by most big Internet companies and industry trade grou

"The last quarter of 2009 should be partly remembered in the advertising community as a juncture when big agencies -- namely Omnicom Media Group, The Nielsen Company, and WPP -- announced consumer data mergers. The deals entailed the marriages of offline and online data and appeared to reveal a potentially major stepping stone in the evolution of "hyper-targeting." Some of the agencies have trumpeted their newfound ability to create consumer segments related to behavioral elements such as "passion points" (e.g., shown interest in electronics, photography, fantasy football, etc.), as well as geographic location, beverage preferences, favorite social media sites, activity levels at the sites, and so on. Augustine Fou, group chief digital officer for Omnicom's Healthcare Consultancy Group and a ClickZ columnist, said that while increased hyper-targeting would likely result from the data marriages, unresolved issues remain before the use of combined online/offline data is widely adopted by brands. "For example, as diverse data sets begin to be integrated, it will become painfully apparent what data can be integrated -- or not -- and specific tradeoffs will have to be made to move forward," he explained. "In particular, privacy policies of sites and ad networks will need to be revisited." The growing ability for marketers to target online ads using data gathered offline has generally raised concern among consumer privacy advocates. To that end, Fou suggested that brands are cautiously optimistic about hyper-targeting and slightly wary of public/consumer perception. "

Marriage of offline and online data sources to target advertising may make tracking more interesting for consumers and advertisers alike.

"For more than a decade, Web companies have said that behavioral targeting, or tracking people anonymously as they navigate around the Internet and then serving them targeted ads, doesn't harm users. On the contrary, they argue, such targeting benefits people by providing them with more relevant messages, and also lets marketers spend their ad dollars more efficiently. When privacy advocates complain about behavioral targeting techniques, industry executives tend to respond by condemning the critics as ivory-tower elitists. But new research is increasingly casting doubt on the idea that the average consumer doesn't care about behavioral targeting. "

You're watching Jon Stewart's "The Daily Show," when suddenly you see a commercial for the Mustang convertible you've been eyeing - with a special promotion from Ford, which knows you just ended your car lease. A button pops up on the screen. You click it with the remote and are asked whether you want more information about the car. You respond "yes." Days later, an information packet arrives at your home, the address on file with your cable company. This is the future of cable TV advertising: personal and targeted. Cable TV operators are taking a page from online advertising behemoths like Google Inc. to bring these so-called "addressable" ads onto the television. "It hasn't really been done on TV before," said Mike Eason, chief data officer of Canoe Ventures, a group formed by the nation's six largest cable operators to launch targeted and interactive ads on a national platform starting this summer. They're betting they can even one-up online ads because they also offer a full-screen experience - a car commercial plays much better on your TV than on your PC. As such, they hope to charge advertisers more. The stakes are high: Cable companies get only a small portion of the $182 billion North American advertising market. Eason said the cable operators, which sell local ads on networks like Comedy Central, get roughly 10 percent of the commercial time on those channels. With targeting, they are hoping to expand that. But they have to tread carefully. Privacy advocates worry the practice opens the door to unwanted tracking of viewing habits so ads can target consumers' likes or dislikes. They also fear it could lead to discrimination, such as poorer households getting ads for the worst auto-financing deals because they are deemed credit risks. "You've got to tell people you're doing it and you've got to give people a way to say no," said Pam Dixon, executive director of World Privacy Forum in Carlsbad, Calif. "Otherwise, it's just not fair."

More consumers are growing comfortable with online behavioral targeting, perhaps as a result of an increase in familiarity, but the majority remain uneasy with the practice. That's according to a new study conducted by TNS on behalf of the privacy group Truste. For the study, consumers were asked whether they agreed or disagreed with the statement: "I am comfortable with advertisers using my browsing history to serve me relevant ads, as long as that information cannot be tied to my name or any other personal information." Twenty-eight percent of respondents agreed, up from 24% who agreed when the same study was conducted last year. At the same time, 51% said they disagreed that they were comfortable with anonymous behavioral targeting. While that figure represents a slim majority, it's down from last year, when 57% of respondents said they disagreed. At the same time, more respondents than in the past now say they delete cookies. Almost half--48% of survey respondents--said they erase cookies at least weekly, up from 42% last year. It's not clear how much overlap there is between the respondents that regularly delete cookies and those who say they're uncomfortable with behavioral targeting. Colin O'Malley, vice president of strategic business at Truste, attributed the increase in the proportion of consumers who said they were comfortable with behavioral targeting to increased publicity over the issue. He said the recent attention to the issue in the mainstream media has helped to increase transparency. He added that the increased cookie erasures showed that consumers want to be able to manage their experience. "Cookie deletion is just one more indication that consumers are seeking tools to increase their level of control," he said.

I have an open question for the people who complain about the potential of advertising networks to track your behavior on the Internet: What is a better way? Some might say that all behavioral targeting should simply be banned. But if you don't think that showing Chevy ads to people looking for cars is equivalent to poisoning the peanut butter, we need a middle ground that explains to people what's going on and lets them decide what is acceptable. This is much harder than it sounds: Any one Web page you visit can have a dozen advertisements and invisible bits of code that each send information about you to different companies, each with different ways of using that data. The privacy policy of the site you are looking at - not that anyone reads privacy policies - can't even try to explain this to you, because the site owner doesn't even know what all of its advertisers are doing. I'm coming to the conclusion that each advertisement on a page has to speak for itself. That's implicit in the approach Google is taking for its new behavioral targeting system. It puts the phrase "Ads by Google" on all its advertisements. Click that link and you'll get some limited information about Google's targeting system and an ability to adjust some of the interests that Google is tracking. But Google's approach is presented in a way that glosses over what they are doing and discourages people from reading the disclosure and exercising control, says Joseph Turow, a marketing professor at the Annenberg School for Communication of the University of Pennsylvania. Mr. Turow has developed a plan that is simpler and more comprehensive: Put an icon on each ad that signifies that the ad collects or uses information about users. If you click the icon, you will go to what he calls a "privacy dashboard" that will let you understand exactly what information was used to choose that ad for you. And you'll have the opportunity to edit the information or opt out o

In the 2002 film Minority Report, video billboards scanned the irises of passing consumers and advertised to them by name. That was science fiction back then, but today's marketers are creating digital signs that can display targeted ads based on information they extract from examining the contours of individual human faces. These smart signs are proliferating in commercial establishments and public places from New York's Times Square to St. Louis area shopping malls. They are a powerful innovation in advertising, but one that raises compelling privacy issues - issues that should be addressed now, before digital signs that monitor our behavior become the new normal. The most common name for this medium is digital signage. Most digital signs are flat-screen TVs that run commercials on a continuous loop in airports, gas stations, and anywhere else marketers think they can get your attention. However, marketers have had difficulty determining exactly who sees the display units, which makes it harder to measure viewership and target ads at specific audiences. The industry's solution? Hidden facial recognition cameras. The tiny cameras can estimate the age, ethnicity and gender of people passing by and can track how long a given person watches the display. The digital sign can then play an advertisement specifically targeted to whomever happens to be watching. Tens of millions of people have already been picked up by digital signage cameras. While camera-driven systems are the most common, the industry is also utilizing mobile phones and radio frequency identification (RFID) for similar purposes. Some companies, for example, embed RFID chips in shopper loyalty cards. Digital kiosks located in stores can read the information on the cards at a distance and then display ads or print coupons based on cardholders' shopping histories. Facial recognition, RFID and mobile phone tracking are powerful tools that should be matched by business practices that protect consu

In the 2002 film Minority Report, video billboards scanned the irises of passing consumers and advertised to them by name. That was science fiction back then, but today's marketers are creating digital signs that can display targeted ads based on information they extract from examining the contours of individual human faces. These smart signs are proliferating in commercial establishments and public places from New York's Times Square to St. Louis area shopping malls. They are a powerful innovation in advertising, but one that raises compelling privacy issues - issues that should be addressed now, before digital signs that monitor our behavior become the new normal. The most common name for this medium is digital signage. Most digital signs are flat-screen TVs that run commercials on a continuous loop in airports, gas stations, and anywhere else marketers think they can get your attention. However, marketers have had difficulty determining exactly who sees the display units, which makes it harder to measure viewership and target ads at specific audiences. The industry's solution? Hidden facial recognition cameras. The tiny cameras can estimate the age, ethnicity and gender of people passing by and can track how long a given person watches the display. The digital sign can then play an advertisement specifically targeted to whomever happens to be watching. Tens of millions of people have already been picked up by digital signage cameras. While camera-driven systems are the most common, the industry is also utilizing mobile phones and radio frequency identification (RFID) for similar purposes. Some companies, for example, embed RFID chips in shopper loyalty cards. Digital kiosks located in stores can read the information on the cards at a distance and then display ads or print coupons based on cardholders' shopping histories. Facial recognition, RFID and mobile phone tracking are powerful tools that should be matched by business practices that protect consu

More than 50 per cent of internet users say they would be more interested in advertisements if they were tailored to their own interests, according to a new report from Q Interactive. Furthermore, another 50 per cent of respondents said they would view an advertiser favourably if they received personalised ads. Despite a number of obstacles that prevent marketers from obtaining too much personal information, 53 per cent of internet users would rather have free online services and insider information in exchange for relevant targeting data. However, 32 per cent of the respondents said they would accept worse service in exchange for privacy, and 15 per cent would prefer to pay for premium service and view no advertising whatsoever. Last year, a survey from Dynamic Markets on behalf of Coremetrics, found that half of UK consumers were happy for marketers to use behavioural targeting to track their online behaviour.

Likely a bit of bias in the survey, but indicitive that targeted ads are not going away. Like most things digital, doing it safely is important for consumers. - Karl More than 50 per cent of internet users say they would be more interested in advertisements if they were tailored to their own interests, according to a new report from Q Interactive. Furthermore, another 50 per cent of respondents said they would view an advertiser favourably if they received personalised ads. Despite a number of obstacles that prevent marketers from obtaining too much personal information, 53 per cent of internet users would rather have free online services and insider information in exchange for relevant targeting data. However, 32 per cent of the respondents said they would accept worse service in exchange for privacy, and 15 per cent would prefer to pay for premium service and view no advertising whatsoever. Last year, a survey from Dynamic Markets on behalf of Coremetrics, found that half of UK consumers were happy for marketers to use behavioural targeting to track their online behaviour.

On Monday, U.K.-based digital rights organization Open Rights Group submitted an open letter to major online media players, urging them to prevent ISP-level behavioral targeting firm Phorm from tracking user interactions on their Web sites. The letter, sent to Google, AOL, Microsoft, Facebook, Yahoo, Amazon and Ebay, said, "[ORG] believes that it is clearly in your company's interest, it is in the interests of all of your customers, and it will serve to protect your brand's reputation, if you insist that the Phorm/Webwise system does not process any data that passes to or from your website." "We have received the letter and are giving it careful consideration from privacy and business perspectives," a spokesperson for AOL and its social network Bebo told ClickZ News. Similarly, in reference to the ORG correspondence, a Google spokesperson told ClickZ, "We've received the ORG's letter, but we're still considering the points they raised, so we don't have a response to make at this time." According to information published on the British Telecom Web site (one of Phorm's ISP-partners,) site owners can specifically request that their properties are not "scanned" by Phorm's technology, by contacting the firm directly. Phorm announced deals with three major U.K. ISPs over a year ago, but its technology is still yet to be fully deployed. BT has, however, carried out live trials of the platform with some of its customers. Phorm's CEO, Kent Ertugrul, claims that BT will implement his company's technology by the end of the year, but BT itself remains less committed to that timeline. Both AOL and Google have vested interests in the behavioral targeting space, although not in the controversial area of deep packet inspection (DPI), in which Phorm's technology lies. AOL-owned Tacoda targets ads based on users' activity across a range of partner sites, but does not directly intercept ISP-data. Google also announced this month that it will begin testing similar behavioral targe

Are you an advertiser looking to target mothers online with children under 12 who are concerned about obesity to promote a healthy snack food? Or people that don't support drilling in the Arctic National Wildlife Refuge but support offshore drilling generally? If so, Resonate Networks -- a new ad network geared to nonprofit, political and corporate advertisers -- promises to serve up just the right audience based on highly targeted, if anonymous, profile data focused on political views and attitudes. "It's really drilling down to people's beliefs and where they stand on issues," said Bryan Gernert, CEO of Alexandria, Va.-based Resonate, a non-partisan company launched by former Republican and Democratic political strategists including Harold Ickes, Bill Clinton's former deputy chief of staff and one of Resonate's investors. Unlike traditional ad networks that target advertising based on a site content or audience demographics, Resonate combines survey information, online and offline databases and proprietary algorithms to match Web users' political leanings and levels of activism with sites they tend to visit most often. "You can identify Web sites that have a preponderance of people who support certain issues," that go beyond obvious issue-oriented or political sites, said Gernert. He added that Resonate is already working with 500 of about 2,500 sites that correlate strongly with particular issues or audiences with high levels of engagement or influence.

On a side table in his Washington offices, Federal Trade Commission Chairman Jon Leibowitz keeps a framed image of Arnold Schwarzenegger from the 1984 film The Terminator. It was given to Leibowitz a couple of years ago by one of the FTC's regional offices, an homage to his crackdown on spyware that surreptitiously gathers information on Web users' surfing habits. Now, Leibowitz wants to terminate-or at least rein in-a different practice he finds no less harmful to consumers: delivering ads to individuals based on the Web pages they visit and searches they carry out. Appointed by President Barack Obama in February to run the country's top consumer watchdog, Leibowitz has made so-called behavioral targeting a top priority. How far he goes in regulating the practice could have big implications for a host of companies that depend on Web advertising and engage in some form of targeting. These include Google (GOOG), Facebook, and Microsoft (MSFT), which on July 29 announced a plan to partner with Yahoo! (YHOO) in the area of Internet search. It would also affect the way legions of companies and advertisers craft marketing campaigns. Behavioral targeting has become more prevalent as it gets easier and cheaper to use software to track online behavior and then use the data to pitch Web users related goods and services. These ads are more likely to induce a customer to make a purchase or otherwise respond to a pitch, researchers say.

"The Network Advertising Initiative will unveil a new tool on Thursday that allows people who want to avoid behavioral targeting to permanently preserve their opt-out cookies. Currently, Web users who don't want to receive targeted ads can opt out via cookies. But those cookies have notoriously short lives -- often because users who want to avoid tracking frequently delete all of their cookies, including the opt-out cookies. Once the opt-out cookies disappear, behavioral targeting companies revert to tracking users and serving them targeted ads. "

This post is one in a series on Privacy & Security, and covers some of the intersections of these domains for those who are not practitioners with in-depth understanding of the associated disciplines.
Behavioral Targeting
The tracking of consumers as they surf the Web to deliver targeted a

"Faced with increasing pressure from Washington, the Interactive Advertising Bureau launched a public service campaign on Thursday aimed at educating consumers about behavioral targeting. The online campaign, created pro bono by WPP's Schematic, features rich media banner ads with copy like "Advertising is creepy" and "Hey, this banner can tell where you live. Mind if we come over and sell you stuff?" More than one dozen publishers -- including Microsoft, Google's YouTube, and AOL -- have committed to donate a combined 500 million impressions for the initiative. The campaign comes as policymakers are questioning whether data collection by marketers violates consumers' privacy. Rep. Rick Boucher (D-Va.) has said he plans to introduce a bill that could require Web companies to notify users about online ad targeting, and in some circumstances, obtain their explicit consent. In addition, the Federal Trade Commission has criticized the industry for using dense privacy policies to inform people about behavioral targeting, or tracking people online and sending them ads based on sites visited. In a meeting with reporters Thursday morning, IAB President and CEO Randall Rothenberg said one goal of the campaign is to address regulators' concerns that consumers don't understand behavioral advertising. "

Amazon has opted out of Phorm's controversial targeted advertising technology, delivering a serious blow to the UK-listed company which has already prompted a European commission legal action against the British government. Phorm's technology, which is yet to be launched in the UK, allows ISPs to track their customers' activity on the internet in order to target adverts on pages they subsequently visit. Amazon's absence from Phorm's Webwise system deprives the company of the second most visited destination, after eBay.co.uk, among shopping and classified websites in the UK, according to data from Hitwise. It means Phorm will not have access to crucial information about what Amazon users are interested in. Last month the Open Rights Group, privacy campaigners, sent a letter to nine of the internet's biggest names, including Amazon, Google, Bebo, Facebook and Yahoo, asking them to opt out of Phorm's technology "to protect your users' privacy". Google and Bebo are actively considering whether to opt out and a spokesman for Amazon said the company has now removed all its domain names - including Amazon.com - from Webwise. A spokesman for Phorm said the company does not comment on individual cases but the it is understood to be planning a meeting with Amazon's management to explain the benefits of the Webwise system.

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I was at an advertising conference last week. Some folks are concerned that privacy advocates will press the government to regulate the most common of tracking technologies: behavioral targeting. That's the system that drops a cookie onto our computers to record many of our wanderings through the Web in hopes of targeting us with relevant ads. I had just written The Next Net, about how we'll be tracked on the mobile Internet. And I was thinking that if behavior targeting worries people, the data cascading from our phone use will terrify them. But there are also plenty of reasons to worry about regulation. First, there's a divide in our society between people extremely worried about erosion of privacy and others who appear, with their Web postings, videos and Tweets, to celebrate it. Which group wins? They both can. Take a look at this new friend-finding location-based application for Facebook, Locaccino. It comes out of Carnegie Mellon. The idea is that people can fine-tune their privacy profiles, deciding who can see where exactly they are, and who gets a blurrier vision, or none at all. The point is that millions of people are clearly eager to exchange all sorts of data. It's a way for them to learn, make friends, find things, and have fun. What's more, it supports a vibrant and innovative software market in a gloom-infested tech industry. Some of the innovation will go toward protecting privacy. Because privacy is something that both sides of this debate want and need, even if they don't agree on what it is. Regulations? The most important privacy regs, in my view, should mandate clear communications on how customer data will be used, and will limit tracking to those who have chosen to participate.

The advertiser's dream of sending a particular commercial to a specific consumer is one step closer to reality as Cablevision Systems plans to announce the largest project yet using targeted advertising on television. Beginning with 500,000 homes in Brooklyn, the Bronx and some New Jersey areas, Cablevision will use its targeting technology to route ads to specific households based on data about income, ethnicity, gender or whether the homeowner has children or pets. The technology requires no hardware or installation in a subscriber's home, so viewers may not realize they are seeing ads different from a neighbor's. But during the same show, a 50-something male may see an ad for, say, high-end speakers from Best Buy, while his neighbors with children may see one for a Best Buy video game. "We have, as an industry, been talking about this since the beginning of time," said Matt Seiler, the global chief executive of the media firm Universal McCann, a part of the Interpublic Group. "Now we've got it in 500,000 households. This is real." The potential of customized ads worries some privacy advocates, despite the assurance of cable companies that they maintain anonymity about the households. "We don't have an objection to advertising that is targeted to demographics," said Marc Rotenberg, the executive director of the Electronic Privacy Information Center, a civil liberties group in Washington. But, he said, there is a need to show "that they can't be reverse-engineered to find the names of individuals that were watching particular shows." Cablevision says it segments its subscribers only by demographics, so that an advertiser can divide ads among various groups: General Motors, for example, could send an ad for a Cadillac Escalade to high-income houses, a Chevrolet to low-income houses, and one in Spanish to Hispanic consumers. Cablevision matches households to demographic data to divide its customers, using the data-collection compa