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 AJR  Columns

From AJR,   April 1999  issue

Protecting The Privacy Of Net Surfers   

Personalized ads are arousing concerns.

By J.D. Lasica
J.D. Lasica is a former AJR new-media columnist.     

THE WORST-KEPT secret of online advertising is this: Almost no one clicks on ad banners. And that's bad news for a Web publication's bottom line.
At least one online newspaper is taking steps to turn that around through a technique called targeted advertising--essentially, tailoring ads to the individual user.
It's a gambit worth exploring, as other Internet companies have. But online publishers considering such a move should not minimize the importance of posting clear policies to reassure users worried about their privacy rights. Sometime this spring, the Minneapolis Star Tribune Web site, startribune.com, is due to roll out its targeted advertising effort. The reason? Fewer than 1 percent of visitors have been clicking on the site's banner ads (the most common form of Web advertising). That rate is in line with the industry's.
Here's how ad targeting works: When you visit a Web site, a computer analyzes your "clickstream patterns," or surfing behavior. Often a site can tell which pages you visit, how long you spend there, what parts of the page (ads, content, links) you click on, which pages you bookmark, print out, e-mail to a friend, save to your hard drive, and so on.
Many Web sites already track generalized patterns of visitor behavior. Targeting technologies go a step further by creating custom profiles of every individual who visits a site. Most often, the Web site doesn't know your name, but it does know something about your surfing and buying behaviors. Over time, it can smooth your browsing experience so you can find the content you want more quickly. And it can make pretty good guesses about the kinds of ads you might welcome--and place them on your screen instantly. As a result, more users click through to the ads, pleasing merchants and generating extra revenue.
In general, that's a positive development. As an outdoors enthusiast, I'm far more open to ads about sporting goods than I would be to those about denture cream. But not every consumer will be enthralled by personalized ads. "I practically burst a blood vessel when I was searching on Alta Vista for statistics about woman-owned businesses and was suddenly assaulted by a pop-up ad for feminine hygiene products," says Shirl Kennedy, author of "Best Bet Internet: Reference and Research for When You Don't Have Time to Mess Around."
"This scares the bejesus out of people," says Steve Larsen, marketing chief for NetPerceptions of Eden Prairie, Minnesota, whose clients include the Star Tribune, Business Week Online, Amazon.com, CDnow and barnesandnoble.com. "Once people get used to the idea, they tend to like it. But at first blush it seems like corporate Big Brother, and the paranoia level goes up. That's why we're working very closely with privacy groups."
One of those privacy groups, Junkbusters, has sounded an alarm about the kinds of information companies collect on consumers without their knowledge. "The Internet is a wonderful tool, but it's the greatest device for invading privacy imaginable," says President Jason Catlett. He points out that online companies have begun sharing data about consumers, and some have even matched that data against direct marketing mailing lists to discover users' identities and track their buying habits.
Karen Larson, head of new-media sales and marketing for startribune.com, seems taken aback when asked whether her company might do that. "Oh, no, never. We have very high privacy standards. From a newspaper standpoint, the trust of our users is paramount, and we take that very seriously."
The Star Tribune has a terrific privacy policy linked from its home page, but many online companies have no standards at all. A study last March by the Federal Trade Commission found that 85 percent of commercial U.S. Web sites collected personal information from consumers, but only 2 percent posted comprehensive privacy policies.
Whether or not news publications plunge into ad targeting, personalization of content (see "It's Time to Get Personal Online," December) or electronic commerce, Web publishers should take three steps: Post a privacy policy, accessible from the site's home page, stating what personal information is collected on each user.
  • Give users the ability to opt out of ad targeting and e-mail solicitations.
  • Let users correct or expunge erroneous or dated information about them.
    Companies that adopt such guidelines will achieve a competitive advantage over companies that have weaker standards. In the end, advertising must become a service to the consumer, not a tool for control or manipulation.