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photo: BRIAN MCCORD FOR THE WALL STREET JOURNAL (ASHLEY HAYES-BEATY) OVERVIEW A Wall Street Journal study found that the online tracking of consumers is more widespread and more intrusive than most people realize. Consumer tracking is the foundation of an online advertising economy that racked up $23 billion in ad spending last year. The bits of data collected can bought and sold instantaneously on stock-market-like exchanges to allow for highly targeted advertising messages LINKS |
The iSpies
By JULIA ANGWIN Hidden inside Ashley Hayes-Beaty’s computer, a tiny file helps gather personal details about her, all to be put up for sale for a tenth of a penny.
The file consists of a single code— 4c812db292272995e5416a323e79bd37—that secretly identifies her as a 26-year-old female in Nashville, Tenn. The code knows that her favorite movies include “The Princess Bride” and “50 First Dates.” It knows that she browses entertainment news and likes to take quizzes. “Well, I like to think I have some mystery left to me, but apparently not!” Ms. Hayes-Beaty says. DOWN TO ONE PERSON Ms. Hayes-Beaty is being monitored by Lotame Solutions, a company that uses sophisticated software called a “beacon” to capture what people are typing on a website—their comments on movies, say, or their interest in parenting and pregnancy. Lotame packages that data into anonymous profiles about individuals and sells the profiles to marketers. Ms. Hayes-Beaty’s tastes can be sold wholesale (a batch of movie lovers is $1 per thousand) or customized (26-year-old Southern fans of “50 First Dates”). “We can segment it all the way down to one person,” says Eric Porres, Lotame’s chief marketing officer. Spying on Web users has become one of the fastest-growing businesses on the Internet. A Wall Street Journal investigation of the 50 most popular U.S. websites found that the tracking of consumers is more widespread and more intrusive than most people realize. As part of its investigation, the Journal also examined 50 sites popular with U.S. teens and children to see what tracking tools they installed on a test computer. As a group, the sites placed 4,123 pieces of tracking technology, about 30% more than were found among the top 50 overall, which are generally aimed at adults. One of the busiest sites for tracking technology is Snazzyspace.com, which helps teens customize their social-networking pages. ACCESS TO PEOPLE Consumer tracking is the foundation of an online advertising economy that racked up $23 billion in ad spending last year, and the new technologies are transforming that marketplace. Monitoring used to be limited mainly to “cookie” files that record websites people visit. But the Journal found new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions. These profiles are bought and sold on exchanges that have sprung up in the past 18 months. Advertisers are paying a premium for the ability to follow people around the Internet with highly specific marketing messages. In between the Internet user and the advertiser, the Journal identified more than 100 middlemen—tracking companies, data brokers and advertising networks—competing to meet the growing demand for data on individual behavior and interests. The data on Ms. Hayes-Beaty’s favorite films, for instance, is being offered to advertisers on BlueKai, one of the data exchanges. “Advertisers want to buy access to people, not Web pages,” says Omar Tawakol, CEO of BlueKai. The information that companies gather is anonymous; Internet users are identified only by a number assigned to their computer, not by name. Lotame says it doesn’t know the names of users such as Ms. Hayes-Beaty—only their behavior and attributes, identified by a code number. People who don’t want to be tracked can remove themselves from Lotame’s system. And the industry says the data are used harmlessly. David Moore, chairman of 24/7 RealMedia, an ad network owned by the big advertising group WPP, says tracking gives Internet users better advertising. “When an ad is targeted properly, it ceases to be an ad,” he says. “It becomes important information.” Tracking is done by tiny files and programs known as cookies, Flash cookies and beacons that are placed on a computer when a user visits a website. Beacons, also known as Web bugs and pixels, can track what a user is doing on the page, including what is being typed or where the mouse is moving. The most intrusive monitoring comes from “third party” tracking files. They work like this: The first time a site is visited, it installs a tracking file on a user’s computer, assigning the computer a unique ID number. Later, when the user visits another site affiliated with the same tracking company, it can take note of where that user was before and connect each of the dots to generate a more complete profile. Information about people’s moment-to-moment thoughts and actions, as revealed by their online activity, can change hands quickly. Within seconds of visiting eBay.com or Expedia.com, information on a user’s activity there can be auctioned on BlueKai’s data exchange. Each day, BlueKai sells 50 million pieces of information like this about specific individuals’ browsing habits, for as little as a tenth of a cent apiece. The auctions can happen instantly, as a website is visited. DEFINE ‘FREE’ The majority of sites examined by the Journal placed at least seven beacons from outside companies. Dictionary.com had the most, 41, including several from companies that track health conditions. The company has since cut the number of networks it uses and beefed up its privacy policy to more fully disclose its practices. Knowingly or not, people pay a price in reduced privacy for the free information and services they receive online. Dictionary.com, which is too small to employ its own ad-sales force, relies on the national ad-placing networks, whose business model is built on tracking users. Dictionary.com executives say the trade-off is fair for their users, who get free access to its dictionary and thesaurus service. The problem, say some industry veterans, is that so much consumer data is now up for sale, and there are no legal limits on how that data can be used. “There are applications of this technology that can be very powerful,” says Tom Phillips, CEO of Media6Degrees, which is offering banks technology that would allow them to assess customers based on their social-network connections. “Who knows how far we’d take it?” | ||||||||||||||||||||||||||||||
