Online privacy vs. the benefits of behavioral targeting

The battle has begun heating up over online privacy with the recent dust up over NebuAd's cooperation with ISPs in trying to create the most targeted ad network created to date.  When heavyweight ISPs Centurytel and Charter jumped on board, it brought a lot of attention to the matter and online advocacy groups and some politicians started asking questions.  Is this ethical? What are the real issues here?

Well, as a marketer, I certainly understand the want to make our targeting as effective as possible.  However, the general climate exists today where people don't entirely trust others (particularly the government and businesses, particularly after the whole NSA/telecom mess) with any information.

However, I think there's a lot of misunderstanding here.  First off, sites have been collecting data for years on you.  For the technologically impaired, sites use what are called cookies, which according to our pals at Wikipedia cookies are:

"transmitted as parcels of text sent by a server to a Web client (usually a browser) and then sent back unchanged by client each time it accesses that server. HTTP cookies are used for authenticating, session tracking (state maintenance), and maintaining specific information about users, such as site preferences or the contents of their electronic shopping carts."

That's why you can leave a site, and the items in your shopping cart are still there when you get back.  This is also how our web analytics programs work, essentially sending a cookie back to your browser, and as you move through the site your browser's cookie identifies you and your activities.  Here's what a cookie looks like:

cookie

This Google Analytics cookie off my laptop was transmitted to Google after a search of mine:

  1. My search was an organic search
  2. The search was for the term "google website optimizer"
  3. http://google.com/analytics/siteopt was the URL I landed on
  4. The cookie will expire on October 28th

Yep, Google now knows that information.  Does it know who I am, though?  No.  One of the big misconceptions floating around is that companies are grabbing name/address/phone number/etc. from users.  That's just not the case.  From a marketing standpoint, this would open up targeting to literally do anything.  However, we haven't reached this point.  To an immense degree, information on the Internet (aside from that which is willfully given away) is anonymous.

The fear raised here by some is that having the ISPs join in with marketers provides for another level of intrusion into people's personal data, and perhaps some of those fears are warranted. As was pointed out by Ryan Singel in Wired Magazine, when a test was run with ISP WOW:

"But Free Press and Public Knowledge found that sometimes when a WOW subscriber visited Yahoo or Google, NebuAd faked an additional packet of data that appears to be the last part of the downloaded Google webpage. The extra packet included NebuAd-written JavaScript that directs users’ browsers to a NebuAd-owned domain named faireagle.com, where the company drops tracking cookies from other domains and companies on the user’s computer. These can be used later to deliver customized ads based off analysis of where people have gone on the web or what search terms they have used."

Obviously, from the advertiser's perspective, this opens up a tremendous opportunity to serve ads based on navigation and search preferences of a user when they surf on sites within an ad network, but I have to admit, something about this seems a bit underhanded.  Your average Internet user doesn't know which sites are on which network, nor do they know when they are offering information or what kind.  Which, to some extent, also validates the marketers arguments, if users already don't know and aren't complaining, then what's the problem?

There are a lot ways to view this argument.  Is this another step down a slippery slope towards unwillingly volunteering all of our personal information, or is this a non-issue that some misinformed advocates and politicians have constructed which will only get in the way of a better web experience?