TheUS
Federal Trade Commission, (FTC) a consumer
watchdog, is to investigatetargeted or "behavioural"
advertising.
If it decides that consumers' privacy is being unduly
compromised, it could undermine some of the internet's commercial
viability and force a revision of companies marketing
strategies.
The FTC said that online
behavioural
advertising involves the collection of information about a
consumer's activities online - the searches, the web pages visited,
and the content viewed - which is then used to send targeted
advertising to the consumer.
In theory, this should reflect the consumer's interests, cut out
"advertising clutter", and thus increase the effectiveness of the
advertising.
Firms such as
Google,
Yahoo and
Facebook have software engines that "serve" advertising on web
pages. Although this does not necessarily use personal information,
it depends on the result of a consumer's search activity.
Last week,
Vodafone and others stopped advertising on social networking
site Facebook after their ads appeared on the home page of the
right-wing British National Front.
The Vodafone display ads that appeared on Facebook ran in
rotation with others such as Pipex and AOL. A Vodafone spokesman
said the firm was not able to specify where its ads appeared on
Facebook. However, the company is now trying to rectify that.
"We are working with our media buyer, OMD, to ensure that more
robust controls are in place before we agree to any potential
re-investment," Vodafone said.
A Facebook spokesman said, "Facebook is committed to giving
advertisers more control over the placement of advertising on the
site. For those UK advertisers who do not want ads displayed
alongside content that they find objectionable, we are working with
them to find alternatives. UK advertisers now can choose whether or
not to run their banner ads alongside group pages on Facebook. We
are continuing to look into ways to apply our technology to give
advertisers even more options in the future."
The UK's Information
Commissioner's Office (ICO) has issued guidance notes that
cover
the use of cookies (small applications that collect information
about a web surfer's use of the web) and related privacy policies,
as well as
unsolicited marketing. Some firms insist users enable cookies
before they allow them on to the home page.
An ICO spokesman said if a firm uses cookies, it must say so and
how it uses the information it collects. Regarding e-mail messages,
firms must first get consent to send, she said.
The UK's Advertising Association has set up a
working group to look at
issues arising from new media marketing practices. A spokesman said
the group is still being formed.
The Advertising Association's June
Quarterly Survey showed internet advertising was spending up
42% to £648m, whereas spending on TV, radio and direct mail all
dropped to £962m, £127m and £615m respectively.
A spokesman for the advertisting industry regulator, the
Advertising Standard Authority, said its remit was to see if
advertisments are legal, decent, honest and truthful. It was not
immediately clear whether it would be concerned with the issues the
FTC is to explore.
The FTC first looked at similar issues in 2000, and issued two
reports on the practice of online profiling. "Technology advances
and the evolution of business models since that time have raised
concerns by consumer advocates, privacy experts, and others about
the implications of data collection in online advertising now and
in the future," the FTC said.
It added several consumer privacy advocates, as well as the
State of New York, had urged it to examine the effects of
behavioural advertising on consumer privacy.
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