Target me with your ads, please

For online advertisements, that is. I know it's happening to me already, every day as I surf the Web. But because I tend to ignore the ads, I hadn't taken much note of any blatant targeting based on who I am, what I'm interested in, or my actions on the Web.

(I have noticed some pretty crazy ads in my Gmail account that made me laugh. But those are based on the context of content of the e-mail, like search ads are, and thus are not behaviorally targeted.)

The issue is on people's minds lately as technologies enable more and more monitoring of our actions on the Web and advertising gets increasingly sophisticated. Behavioral targeting was the subject of a town hall last month sponsored by the U.S. Federal Trade Commission. The FTC is looking into Google's proposed acquisition of online ad serving and ad exchange provider DoubleClick, which poses privacy concerns for some and anticompetition issues for others.

The proposed Google-DoubleClick merger is just one in a recent consolidation wave that includes Microsoft's purchase of ad serving firm Aquantive and ad exchange AdECN, as well as AOL buying behavioral targeting firm Tacoda and Yahoo buying online ad auction network RightMedia and BlueLithium, an online advertising network. Behavioral marketing is also spreading to social networks, including the popular Facebook, which recently announced a new ad system that has members up in arms.

During a recent briefing with online ad network Specific Media, I asked (well, really I begged) to be targeted firsthand in a live demonstration. Specific Media Chief Executive Tim Vanderhook indulged me, but I have to report that I was underwhelmed with the results. Not because the advertising wasn't targeted, but because it just didn't offend or annoy me enough. But maybe my expectations were too high.

Vanderhook showed me my profile, actually the profile of my computer, which has cookies dropped from the Web sites of Specific Media partners. It was a list of categories and subcategories based on my Web surfing habits. It showed that I was interested in things pertaining to technology and specifically the Internet and digital cameras, news and media, advertising, arts in general, cultural development, philosophy and, this is odd, heavy construction. I must have hit on some housing or building site to trigger that one.

To show how the profiling gets updated, I visited one of the 1.5 million Web sites in Specific Media's data network, a site on personal finance, and clicked on an article about debt reduction. When I went back to look at my demographic profile, a new business category had been added: "macro economics:credit and debt."

Fitting the profile?
Specific Media also predicts my age, gender, race, and income based on the Web sites I visit. So, at work, I'm probably a middle-age white man who reads a lot of tech news sites. At home, I expect I'm a young to middle-age white woman who visits a lot of entertainment and animal- and environment-related sites. But either way, they don't know exactly who I am, where I live, or how to reach me.

I then tested how the system targets me with ads based on what sites I visit. I went to a portal for a broadband Internet service provider that Vanderhook asked me not to identify. At the top of the page it served me an ad for a debt reduction company and at the bottom an ad for a credit card company.

What if I were visiting Web sites related to something that could be highly personal or embarrassing if other people knew it was targeted at me, like sexual dysfunction, pregnancy, or even bad breath?

Specific Media doesn't serve ads for sensitive categories including certain health conditions, like AIDS or sexual dysfunction, but ads targeted at pregnant women aren't necessarily excluded, Vanderhook said. And halitosis? Apparently, there isn't much brand advertiser interest in that category yet.

In addition to online ad networks, search sites like Yahoo, Google, and Microsoft are amassing a heavy arsenal of targeted advertising capabilities. Yahoo has been doing behavioral targeting for more than six years, "longer than anybody," said Richard Frankel, senior director of product marketing at Yahoo.

Yahoo not only has a portal that attracts millions of visitors every day, but the company also knows what searches are conducted and knows who you are based on your Yahoo account registration for things like Yahoo Mail.

Yahoo's behavioral targeting is based on visits to pages on the Yahoo network and partner sites like eBay, Comcast, and Forbes.com, what searches on Yahoo you have conducted, and which ads you clicked on and viewed. If you are logged in to your Yahoo account, the site can target you based on your age and gender, but that targeting system is separate from the behavioral targeting system, Frankel said.

I thought I'd give Yahoo's behavioral ad targeting system a whirl. I conducted searches for "Toyota RAV 4," "autos," and "Jetta" and clicked on some results. Then I went into my Yahoo Mail and, sure enough, there was an ad for Buick. The system obviously wasn't picking up that I was interested in foreign makes.

"We can't read your mind," Frankel said in response. "I don't know that you would never consider a domestic car. (Domestic car makers) want to compete for that business too."

Microsoft also offers behavioral targeting, anonymously tracking people across its network and blending that with search history and data supplied during registration to Microsoft's many online services. But it doesn't provide identifiable information, according to the company.

So far, Google hasn't jumped into the behavioral targeting pool, but who knows what will happen if its proposed acquisition of DoubleClick is approved and the market matures?

Meanwhile, the privacy debate goes on. Privacy advocates worry that details of our medical conditions and financial and legal troubles will end up in the wrong hands and for bad uses as the industry consolidates and companies change their practices.

"There really are no legal limitations today on what companies can do with personal information they collect for targeting purposes," said Marc Rotenberg, executive director of the Electronic Privacy Information Center. And "if you provide information to a company with certain expectations and the company revises the terms of service, what do you do at that point? You can't say, 'I want my data back.'"

Data collection and sharing should be opt-in for consumers and the FTC should hold companies to their promises on protecting consumer data privacy, he said. Companies that are part of the Network Advertising Initiative, including Specific Media, Yahoo and AOL's Tacoda, allow people to opt out.

At the town hall meeting in Washington, D.C., an FTC commissioner urged companies to stop collecting information about consumers by default, and to clearly tell them what they are doing with the data, among other suggestions.

In some cases, the public backlash against an advertising scheme will be enough to get a company to back down. Last week, Facebook was forced to modify a new ad targeting service after consumer groups complained it was too invasive.

Two weeks ago, Facebook introduced "Beacon" ads, which automatically send information to your Facebook friends when you buy things on sites of Facebook partners. After a barrage of criticism, Facebook now won't broadcast your purchase information unless you click an "OK" button for each transaction. The company, however, did not provide a way to opt out of all Beacon ads.

"Behavioral targeting has gone from tracking an individual on one Web site, collecting data about their interests and content they like and what they put in their shopping cart to shadowing their movements around the Internet," said Jeff Chester, executive director for the Center for Digital Democracy. "Facebook brings it to a whole new level, which is the perfect privacy storm."

At this point, I'm not personally bothered when I see targeted ads, but I want to know what type of data is being collected and what is being done with it. And I don't think companies are doing the best job of providing me with that information. I would prefer the opportunity to opt in, and I definitely wouldn't want my activities on the Web to be broadcast to even my closest friends, let alone marketers.

Now, back to ignoring the ads.