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Microtargeting in Online Advertizing: Can You Escape?

posted Oct 26, 2010, 12:29 AM by Nurit Kohl   [ updated Oct 26, 2010, 10:33 AM ]

In the context of internet marketing, microtargeting means serving offers to narrow segments, based on data that is gathered through users' online activity. Zappos, Netflix, Facebook – they all do it, each in its own way: It's that shoe you looked at and now is chasing you around the web in banner ads; that movie recommendation that seem to be coming from an old friend; that ad for the product you "like" so much - respectively.

The benefit to consumers comes in the form of personalized content and advertising. The trouble is that websites' publishers are not transparent enough about the data they collect and how they use it. This lack of transparency is significant because 72% of users poled feel negatively about targeted advertizing based on their web activity and 52% would turn off behavioral advertizing if they could [taken from this secondary source].

But can you opt out? The FTC proposed online behavioral advertizing privacy principles, yet none of its recommendations dealt with the right to opt in or out of microtargeting. I respect the advertizing model, which allows users to enjoy the free ride. Yet there should be an alternative to the "big brother" scene.  Here are two suggestions:

·         Transparency, Transparency, Transparency!

·         Data portability: Users take their data availability with them and give permission to use it - maybe as an admission ticket to a website or a service. This solution actually gives greater benefit to advertisers because it allows access to richer data.

Additional reading:

1. NebuAd was one of several companies developing behavioral targeting advertising systems. Find out how privacy concerns drove it out of business
2. The Center for Digital Democracy on consumer rights and privacy