Regulators Seek User Permission for Ad Targeting

By Kris Holt April 03, 2012

Unless you take a great deal of precaution and know your way around blocking software, your Web activity is probably being tracked. In fact, a number of companies are studying your clicks and analyzing your activity to discover what you want, and display the most relevant ads they can.

The practice has been going on for years, but now legislators are taking a closer look at how these companies glean their data. Both the United States and the European Union (EU) want to give their citizens the choice over whether ad firms can track them. The EU wants companies to seek explicit permission from users, while the U.S. is content with letting users take the initiative to block tracking.

The EU established Web privacy rules last May, in which it urged its members to make sure companies only store data on users if the users have clear and full information about the data. Users must have access to the data and have given their consent before their activity can be tracked. Some member states, such as Britain and Germany, are struggling to comply with the rules.

Lawyer Phil Lee, from Field Fisher Waterhouse, is advising companies in the U.S. and EU on how to meet EU requirements without going much further than the U.S. standard.

"This is operationally and technically a nightmare,” he said.

Around half of British and U.S. Web users want ad firms to be distanced from their data, and the companies who benefit from display ads are trying to solve the problem themselves.

As many as 50 companies (including Facebook and Walt Disney Company) are speaking weekly with data privacy experts to find a way for users to shut off targeting and stave off the regulators.

The companies, who make up the part of the World Wide Web Consortium (W3C), have been given until June by EU regulators to complete work on a tool called Do Not Track. However, it’s not clear if the application will be completed in time.

Yahoo claims it will add an option to block ad targeting to its websites by the summer. Google, which provides publishers with ad targeting tools, saidit will add a Do Not Track tool to its Chrome Web browser this year.

The effect of targeting is a big deal, since it’s almost tripled what brands pay websites to run their ads, according to analysts., for instance, places cookies on users’ computers to find out the type of content they click on. Through insights the company gleaned from the data, it was able to help its client L’Oreal increase its ability to reach ideal buyers by 168 percent.

With that in mind, increased regulation could spell the death for a number of websites.

"There is no way websites will survive without targeting," said Kimon Zorbas from online ad lobby Internet Advertising Bureau.

Edited by Amanda Ciccatelli

TechZone360 Contributing Writer

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