Category Archives: FTC This will freak out the privacy advocates is a new service showing how far online tracking has gone, offering up phone numbers, home values, wealth estimates and even maps of houses for anyone you wish to track.

While a lovely user interface, Spokeo is really nothing new. Back in June 2008 Danny Dover posted a list of all the personal data elements Google could conceivably track about you — from every web site you’ve ever visited via Google search results pages to your stock portfolio, credit card, personal address, video preferences, friends and colleagues, even the time patterns on your calendars. If you’re a 100-year-old dwarf who likes to sleep late and then shop for shoes for your elf friends, Google likely knows it. Direct marketers have used similar mailing lists and PRIZM-segmentation schemes for decades to guess whether you will respond to Christmas catalogs with waxed-cotton hunting jackets.

For the record, most online targeting does not involve personally identifiable information — cookie snippets of code placed on your computer tag your device, and by proxy what type of person you are, but cannot ascertain your name, address, or other deeply personal data. (Google can do this because you’ve likely uploaded that data somehow in its vast ecosystem of search, YouTube videos, Gmail preferences, etc.) Yet in 2010, driven by a series of privacy faux pas such as Google’s Street View debacle, privacy advocates grew more anxious about such rising mountains of data. The FTC is backing a Do Not Track proposal that would allow consumers to opt-out, but we think that “fix” won’t work — primarily because it will only drive ad revenue to big publishers, make all ads less relevant, and hurt the little sites that many people like to read. Besides, marketers will find new ways around tracking such as “digital fingerprinting” that can divine individual computers and mobile phones without the use of cookies or consent.

We wrote in Bloomberg Businessweek over the holidays:

If Do Not Track moves forward, you’ll still see banner ads everywhere. They’ll be untargeted, with more off-kilter offers because no data about your preferences will be deployed to give you a golf ad, say, if you’ve been reading a lot of golfing articles. You’ll feel better about your privacy, despite the fact that website marketers could never track you individually, but rather could make wild approximations of the type of person you are. Thousands of small websites may disappear as dollars flow to consolidated publishing centers.

Is this too extreme? Surely, hobbyists will continue to write blogs and build sites out of love. But with $8 billion or more moving to the ivory towers of mainstream content, you’ll have fewer choices. There will be less innovation online. The Mashables and Huffington Posts of tomorrow may never get off the ground. Add video and soon the Web will be like turning on TV—perhaps with a few major networks, just like the 1960s.

The information is out there. Rather than fight it, consumers may just have to learn to manage it.

AOL and FTC may shut down online ads: Is this a good idea?

U.S. consumer-privacy groups yesterday asked the FTC to consider a “Do Not Track” list — an online equivalent of the telemarketing industry’s Do Not Call Registry. “Do Not Track” would allow consumers to opt-out of internet advertising programs that track their behavior online.

Behavioral targeting is one of the hottest forms of advertising on the Internet, second only to Google pay-per-click in matching advertising offers with consumer interests. With behavioral targeting, advertisers place cookies on a user’s computer, track which web sites that consumer goes to and what the consumer clicks on, and then offer up banner ads that hopefully are relevant. In our own tests, we’ve found click-through rates from behavioral-targeted banner ads are about 0.70%, five times higher than the average banner click-through rate of 0.14%.

The LA Times reports the Privacy Rights Clearinghouse, the World Privacy Forum and the Center for Democracy and Technology brought up the issue just as the FTC was preparing for workshops on behavioral targeting. Also yesterday, AOL announced it would offer consumers its own opt-out system by the end of the year. The impact could be huge — the Do Not Call registry pretty much destroyed the telemarketing industry.

Consumers may want to think twice before allowing online Do Not Track. Online banner ads are nowhere near as intrusive as phone calls that interrupt your 6 p.m. dinner — and those little colorful banners pay for most of the web content consumers see for free. U.S. internet ad revenues were almost $10 billion in the first six months of 2007, and that’s a lot of cash to make up if the ads no longer work.

If the rug gets pulled from effective online advertising, web sites may have to make money the old-fashioned way: by charging you admission.