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Behavioral data tracking rising dramatically (Q&A)

A study by Krux study shows a huge jump in behavioral tracking since Nov. 2010 -- here's why. Hint: Ad networks are involved.

Gordon McLeod, president of Krux.
Gordon McLeod, president of Krux Krux

Web sites are increasingly targeting ads at visitors based on behavioral data collected via cookies and other tracking techniques behind the scenes. This riles privacy advocates and many consumers, but there's no question it will become even more widespread.

Since November 2010, behavioral tracking has increased 400 percent, according to a new study from Krux, a firm that helps Web sites manage customer data. The average visit to a Web site in December triggered 56 instances of data collection, up from 10 instances in Nov. 2010, the company found after crawling pages on the 50 most-visited sites measured by ComScore.

Tracking people as they visit different sites on the Web allows advertisers to provide more targeted marketing, and it lets publishers demand bigger sums for the eyeballs they provide, via real-time ad bidding. Facebook confirmed last week that it is testing a new advertising platform that allows more targeted advertising based on browser history.

Krux President Gordon McLeod talked with CNET about why targeting is rising so fast and what this means for consumers.

What data is collected?
It's cookie data from a user's browser. More companies, including the publisher of the site you are on, and third parties are collecting similar data and getting understanding from user perspective what sites you're going to, what content you're looking at, things you're interested in, income, age, education level. As well as marketing data. You're looking to buy a car, planning a vacation to France. All sorts of bits and bytes that are sent to a collector building up profiles and audience segments, and much of it is going to ad networks and exchanges where it's sold in real time.

So real-time bidding is behind this?
Yes. It's one of the bigger growth industries that we've seen. An IDC study shows it growing from zero to $5 billion in less than five years. That says there is real value in data. That the traditional approach of buying advertising content on a page, sponsoring a section on a news site, is the classic version. But now advertisers are buying audience. They are looking for more attributes. They're buying at scale and at prices, frankly, that are relatively low. But that activity has generated a lot of new entrants into the market place. Many more companies are scraping and collecting this data. Sometimes publishers are aware of this and they see it as a cost of doing business, but many times they are not. They see it coming in through that free toolbar, the analytics toolbar, or that widget that reaches out to social-networking sites or it's within the ad networks themselves. What this study shows is that the number of collectors and the amount of ad collecting activity is growing incredibly quickly.

Privacy advocates and many consumers are concerned about this. Should they be?
Yes and no. Certainly privacy advocates and some governments are ahead of this a bit. if you go to Europe there is an even higher level of discussion. The reality is there wasn't a lot of discussion over the years. With credit card companies, phone companies, and others a lot of similar practices have been going on for quite some time. What's happened here is the lack of transparency. Many other collectors, that are not the site owner themselves, are scraping this data and it's done in a way that the publisher and the user aren't aware that it is happening. Some would characterize it as it's starting to get creepy. Certainly publishers have privacy policies, but they are really hard to enforce. You have to be really cautious working with partners on tools and analytics and on advertising sales.

They don't know who I am though, right?
There are a lot of black arts and other things going on, but 99 percent of this is just anonymous targeting based on interest levels or other data. Some of this is personal preference. Some people like to walk into the bar where the bartender knows their name and has their drink ready for them and their seat. Others like to go in anonymously, order a different drink every time and sit at a different seat and not have to talk to the bartender. What's creepy to you might be helpful to me. My wife and I bought a Prius three weeks ago and we spent a long time online looking for hybrid cars. And as I would go to The New York Times or Sports Illustrated I was served up ads from hybrid car manufacturers. I actually found that helpful because I was in the market and I wanted that information. I find that more helpful than getting offers for a new mortgage or a new computer, which I am not in the market for.

How do technologies like Do Not Track and Ad Aware play into this?
It raises the level of the debate. It gets more and more people talking about these issues. It gets more people thinking about what information they are revealing about themselves on the Web. It gets them thinking about privacy policies and whether they should be deleting cookies and what their browsers are set at. This is still pretty complicated for the average user. With Microsoft's rather unilateral decision (to set Do Not Track as the default in Internet Explorer) it gets people talking about it. The more informed users are, the better off they will be and we maybe won't need to rely so much on government interventions through regulation, if the companies and publishers are more transparent and open about what is being tracked and what isn't. The debate is raging, obviously, and people are taking many sides on what's appropriate. Krux works with publishers and says 'This is what's going on in your site. These collectors you don't have a relationship with. How do they get access to your page? What kind of data are they collecting?' This is where a lot of the publishing community has pushed back in the debate about what has to be done and they said let us self-regulate and monitor our own pages. Krux is trying to enable them to enforce that, to audit their own pages and see what is happening on the site.

What should consumers do if they don't want to be tracked this way?
It is hard because that great personalized recommendation experience they get with Amazon, often they don't feel the same way when they are on a news site. They should be more aware of which sites they're on and what environment they're on with regard to how they want to manage the tracking of data. We work with a company called Privacy Choice that has best recommendations. We work with industry groups like the IAB (Interactive Advertising Bureau) in putting out best practices. Some of this is about self-education for users. Krux spends a lot of time with publishers on creating best practices for protected environments for publishers and consumers.