[redacted at student's request] Web Difference Seminar Paper May 9, 2008
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[P]rivacy is…an emotional and psychological need, the need to be left alone so that a person can reformulate and re-create himself without anyone noticing the process. It is this creative aspect of privacy, the inner state of mind that allows a person to think about, tinker with, and re-create his personality, which is important not only to an individual but to society.
2
-N.D. Barta, author of Digital Freedom: How Much Can
You Handle?
For most of us, our use of the Internet has been made at least traceable in ways most of us would never even consider possible.
3
-Lawrence Lessig, Internet scholar and author of Code 2.0
Perhaps we were so intent on avoiding Orwell's totalitarian Big
Brother that we did not notice the arrival of millions of tattletale busybodies.
4
-Peter H. Lewis, former New York Times technology columnist
People should have dominion over their computers...The current
‘don’t ask, don’t tell’ in online tracking and profiling has to end.
5
-Jon Leibowitz, FTC Commissioner
1
This characterization is borrowed from Jon Leibowitz's comments at the Federal
Trade Commission's 2-day workshop on behavioral targeting, as reported in Louise
Story's article, "FTC Member Vows Tighter Controls Of Online Ads," The New York
Times , November 2, 2007, available at http://www.nytimes.com/2007/11/02/technology/02adco.html?_r=2&ref=technology&or ef=slogin&oref=slogin.
2
N.D. Barta, "Changing View of Privacy," in Digital Freedom: How Much Can
You Handle?
, Rowman & Littlefield, Lanham, Maryland (2008), 43-75, at 75.
3 Lawrence Lessig, Code 2.0
, Basic Books (2006), at 46, available at http://codev2.cc/.
4
Peter H. Lewis, "Forget Big Brother," The New York Times , March 19, 1998, available at http://query.nytimes.com/gst/fullpage.html?res=9804E7D61139F93AA25750C0A96E95
8260
5 Story, "FTC Member Vows Tighter Control…," supra note 1.
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[redacted at student's request] Web Difference Seminar Paper
I.
Introduction
May 9, 2008
Is the Web different in the advertising context, and does any difference matter?
This paper argues that it is indeed different, and that it does matter. The "web differences" that are emerging in the world of online advertising pose major threats to consumer privacy interests and require a closer look by industry leaders, regulators, and consumers alike. As one commentator has noted, "[c]ollection of personal information on the Internet runs rampant, both through direct and indirect means, both in the open and secret."
6
In exploring the differences in advertising on the Web as compared to traditional media, this paper focuses on the particular practice of "behavioral targeting"
-- tracking of consumers' activities online for the sake of delivering website advertisements targeted to those activities.
7
Part II provides a background of advertising, explaining how it evolved from its roots in print media to today's Internet era. Part III discusses behavioral targeting and explores its differences from more traditional efforts at ad targeting. Part IV presents arguments against the widespread practice of online targeting and data collection without consumer notice or consent, and evaluates the most commonly asserted arguments in favor of the practice. Part V briefly outlines several options to help combat the
6 Chris Jay Hoofnagle, "Privacy Self-Regulation: A Decade of Disappointment," in
Consumer Protection in the Age of the 'Information Economy,' ed. Jane K. Winn (2006).
7
For the most part, this paper's discussion is focused on behavioral targeting as conducted by websites and their third party marketing companies. Targeting based on email content – what Gmail does – and targeting based on content the user discloses to the website through registration – what social networking sites like Facebook and
MySpace do – are not addressed specifically, although most of the arguments set forth here apply to these contexts as well.
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 problematic aspects of behavioral targeting and calls for government and industry to take a closer look at targeting practices on the Web.
II.
A Short History of Advertising, from Print Media to the Web
Over the course of the 20th century, the advertising industry has moved increasingly toward consumer targeting in all forms of media. To understand how online advertising is different from advertising in traditional media, and why online ad targeting is of particular interest to advertisers, it is helpful to examine the origins of advertising in
America, as well as the source of the trend toward increased consumer targeting.
8 a.
Advertising's early days: selling to consumers "by the tonnage" 9
American advertising started out on a local level, and took the form of generalized print notices about things like consumer goods and missing or stolen property.
10
In the colonial era, for example, stores would list their "goods on hand" in the local newspaper, often accompanied by language seeking to persuade readers to buy certain products.
11
Because most consumer products were locally made and sold, there was little need for
8
For an entertaining short video history of advertising, see Douglas MacMahon's
"A Short History of Advertising," available at http://youtube.com/watch?v=GG49slPEXwg.
9
See infra note 12, at 109. (describing this era as marked by manufacturers' "desire to sell to people 'by the tonnage'").
10
See "Advertising," MSN Encarta encyclopedia article, available at http://encarta.msn.com/encyclopedia_761564279_5/advertising.html.
11
See American Advertising: a Brief History , on George Mason University's
History Matters website, available at http://historymatters.gmu.edu/mse/ads/amadv.html.
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[redacted at student's request] Web Difference Seminar Paper sellers to cast a wider geographical net.
May 9, 2008
With the advent of mass production, however, came the desire to reach mass audiences. Manufacturing had become industrialized and nationalized by the end of the
19th century.
12
Consequently, "[i]t seemed logical to manufacturers to use media vehicles to mass-produce customers in the same way that the factories mass-produced the merchandise."
13
The goal of advertisements in this era was to reach as many people as possible; messages were targeted at the general audience of "everyone." 14 The new technology of radio broadcasting was particularly well-suited to this sort of general audience advertising. b.
The 20th century and the birth of consumer targeting
However, manufacturers and marketers quickly learned that "everyone" does not share the same set of buying habits. As early as the 1920s, "new manufacturing initiatives were creating the basis for an approach to marketing that would reward media that targeted segments of the population rather than 'everybody.'"
15
Sellers became aware that certain radio programs and print periodicals were more popular with certain segments of the consumer population, and in the 1960s they began funding research to find out more about the preferences of their advertising audiences. This was the beginning of targeting in advertising: companies "targeted" their ads at the segments of
12
See Joseph Turow, Audience Construction and Culture Production: Marketing
Surveillance in a Digital Age , 597 Annals 103, 108 (2007) (describing turn-of-thecentury manufacturing techniques).
13
Id. at 108-9.
14
15
See id.
Id.
at 109.
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 the population they thought would be most likely to buy their product. They placed their ads in particular media – certain newspapers, TV shows, and radio programs – based on information about the medium's particular audience.
16
From the 1970s onward, several developments heightened the importance of targeted advertising to profitable business. First, competition among manufacturers had intensified, which brought about the need for more "product differentiation": companies had to create different versions of similar products, presumably popular with different slices of the consumer population, in order to remain competitive. Advances in manufacturing technology made this sort of production possible.
17
Second, firms had sprouted up that focused exclusively on conducting market research and engaging in
"consumer analysis." Amid stiff competition, these firms came up with ways to
"differentiat[e] groups in new, unusual, and profitable ways." 18
Companies found this sort of targeting quite valuable. Instead of sending out a promotional message to millions of people, 90% of whom would not buy their product, they could identify a smaller group of people that research showed would be more interested, and, through savvy choice of advertising media, could send their message to the smaller but more focused audience – 50% of whom would buy. By way of example,
"[i]t was a common industry observation that Disney's ESPN cable networks, aimed at different types of male sports enthusiasts, were far more valuable than its venerable ABC
16
See id. at 108-10 (Describing the evolution of advertising toward a market segmentation approach)
17
See id. at 109 ("Economies of scale [allowed] manufacturers to create slightly different versions of the same products to aim at different parts of the marketplace.").
18 See id.
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 network, with a much larger though broader [audience]."
19
The modern era of targeted advertising was born.
III.
Behavioral Targeting on the Web: How it Works and How it is Different
From Targeting in Traditional Advertising Media
At first glance, it may seem that targeted advertising on the Web is simply an extension of the well-established trend in the advertising industry to seek a closer match between product audience and ad audience through targeting. In many respects, this is true: shampoo companies advertise on instyle.com (target audience: young women), while hair growth companies advertise on sports.yahoo.com (target audience: middleaged men). But unlike targeted advertising in traditional media like print and television, which relies on generalized research about the types of people that tend to read/ watch/ listen to the programming that surrounds the ad, the online regime of targeted ads involves collecting data about actual, individual consumers and their preferences.
A recent article in the New York Times highlighted the distinction between traditional advertising and Web advertising as follows: "Like magazines and newspapers,
Web sites are most often ranked based on how many people visit them and how long they are there. But on the Internet, advertisers are increasingly choosing where to place their ads based on how much sites know about Web surfers."
20
Websites are gathering
19
20
Id. at 111.
Louise Story, "To Aim Ads, Web is Keeping Closer Eye on You," The New York
Times , March 8, 2008 (describing new study estimating the amount of data Internet companies are gathering on users). Accompanying the article are two extremely informative charts disclosing the results of the study and breaking down data collection
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 previously unheard-of amounts of information about web users, and in the advertising industry, consumer information is money. Yahoo! Chief Data Officer Usama Fayyad has said that "'click-through' rates" on ads targeted in this manner can be up to 200% higher than the rate for traditional, non-targeted online ads.
21
Behavioral targeting is clearly a growing and lucrative business. But what exactly is it, and how is it different from offline efforts at targeting? a.
How behavioral targeting works
The mechanics of behavioral targeting are ironically simple considering the wealth and complexity of information that is gained through the process. A Web user visits a particular website, which sends "Web cookies" to the user's computer.
22 Regular web cookies ("cookies") are "text files sent by a Web site to your computer to track your movements within its pages."
23
They transmit back to the website's server information about the user's activities on the website: what the user put in her "shopping cart," what links she clicked on, and what information she entered into queries on the site are just a few of the kinds of things cookies can keep track of. When the user leaves the site, the activities based on whether they are conducted by the Web company's own websites or by a 3rd party ad company.
21
See Rachel Rosmarin, "Be on your best behavior," Forbes.com
, December 28,
2005, available at http://www.forbes.com/2005/12/27/behavior-based-online-advertisingcx_rr_1228behavior.html (describing the beginnings of online behavioral targeting at
Yahoo and other major Web companies).
22
For a good explanation about what Web cookies are and how they work, see the
Wikipedia entry for HTTP cookies, available at: http://en.wikipedia.org/wiki/HTTP_cookie.
23
Adam L. Penenberg, "Cookie Monsters: The Innocuous Text Files That
Websurfers Love to Hate," Slate.com
, November 7, 2005, available at http://www.slate.com/id/2129656/ (describing how cookies work).
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[redacted at student's request] Web Difference Seminar Paper cookies become inactive.
May 9, 2008
However, third party cookies –used by the companies doing the most targeting – are different from regular cookies in that they remain in the user's Web browser even after the user leaves that site.
24
They are then re-activated when the user visits a different website that is part of the third party's "ad network." This is how the biggest Web ad companies – like DoubleClick – operate. DoubleClick has business relationships with a wide range of entities that are responsible for handling the online advertising for clients like GM, Motorola, Nike, and Coca-Cola – whose websites together form its "ad network."
25
The cookies sent from one website in DoubleClick's ad network send information to DoubleClick about the user's Web surfing activities whenever those activities take place on a site within its ad network. Consider this illustration from a
2005 Slate article:
Say you visit a Web site with cookies served by a marketing company like DoubleClick. The cookie it dispatches will come alive every time you visit another site that does business with
DoubleClick. That means it could track you over dozens of sites, logging every article you read, every ad you click on, and every gadget and gizmo you buy without your knowledge or approval.
26
In this way, DoubleClick and other companies like it are able to create and store
"customer profiles" that include information like the user's IP address, time and date, pages viewed, and more. They then "determin[e] where and when to send the ads, based on Web users' surfing patterns" stored in the customer profiles.
27
24
See id. (arguing that "third-party cookies" like those used by ad companies should be abolished in order to avoid consumer mistrust of cookies in general).
25
See Wikipedia entry for DoubleClick, available at http://en.wikipedia.org/wiki/Doubleclick (listing clients of DoubleClick).
26
Id.
27 See Miguel Helft and Eric Pfanner, "Microsoft to Buy Online Ad Company," The
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 b.
Features of the Web as a medium that make online behavioral targeting different from traditional targeting efforts
Several aspects of the Web make this sort of individual targeting different from the kind of targeting that takes place in other media. Most notably, it is easier to gather consumer information on the Web, and advertisers are able to personalize ad content on an individual basis.
Gathering of consumer information is easier. First, the Web's usefulness and popularity as a "one-stop shop" for a wide range of activities mean that it is possible for
3rd-party ad companies to collect a more comprehensive set of data about a user's interests and preferences – which advertisers think translates into more accurate predictions about that user's buying habits. For example, in one evening, a single user could enter a few searches into Google, read the news on the Huffington Post, and place an order on Amazon.com. If all of these sites had an arrangement with DoubleClick, that company would be in possession of a whole host of information about the user: what books he just bought, what articles he read, what searches he ran, his zip code, the time of day he visited these sites, and more.
28
The ever-consolidated structure of the 3rd-party
Web advertising industry
29
combined with the capabilities of cookie technology and other
New York Times , May 19, 2007 (describing DoubleClick's approach).
28
For example, a 2005 Forbes article reported that Yahoo's set of "trackable behaviors" included "news, finance and auto sites, history of ads clicked, shopping, maps, local content and movie and music content." Rosmarin, supra note 21.
29
See Helft, supra note 27 (describing the "latest in a flurry of deals for online advertising firms by big Internet and media companies"). See also Story, "FTC Member
Vows Tighter Control…," supra note 1 (noting Google's purchase of DoubleClick,
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 tracking techniques (such as logging and storing users' IP addresses) makes this sort of data gathering possible.
30
Delivery of ad content can be personalized. Second, the network architecture
31 and technology of the Web allow for delivery of individualized content – a website can choose to show a user different ads based on "what it knows" about the user.
32
To illustrate this difference, compare print magazines to their online counterparts. Print magazines are mass produced; the production technology only allows for limited tinkering with ad content based on a few factors, such as geographical region.
33
A New
York reader might see a different ad on page 10 than would a reader in Houston, but all
New Yorkers will probably see the same ad. However, an online "magazine" like
Slate.com can (at least theoretically) direct different ads to different readers based on information gathered in real time: the website can track which parts of it are visited by a particular computer, and deliver ads accordingly. 100 people clicking on Slate's "Travel
Microsoft's purchase of aQuantive, Publicis Groupe's acquisition of Digitas, Yahoo's purchase of Right Media, and AOL's purchase of Tacoda).
30 See John Schwartz, "Giving Web a Memory Cost Its Users Privacy," The New
York Times , September 4, 2001 (noting that "while public anger has grown over invasions of privacy both real and imagined, momentum in Washington to restrict the use of cookies and other high-technology tools for monitoring Internet users' activities has slowed").
31
See D. Reed Freeman, Jr., Privacy and the Future of Targeting , December 15,
2004, available at http://www.imediaconnection.com/content/4791.asp ("the Internet's architecture allows advertisers to target different messages to individual consumers viewing the same Web pages"). Freeman is Chief Privacy Officer at Claria, an ad targeting company. For more about Claria, see http://www.claria.com/about-us.html.
32 See Peter S. Menell, Regulating "Spyware": the Limitations of State
"Laboratories" and the Case for Federal Preemption of State Unfair Competition Laws ,
20 Berkeley Tech. L.J. 1363, 1369 (2005) ("The traditional advertising model embodies a technological constraint of mass communications media – messages cannot be tailored to individual consumers.").
33
See id.
(pointing out that "advertisers are constrained in targeting their advertisements to the distribution of demographic characteristics of consumers of particular newspapers, magazines, or broadcast media").
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 and Food" section could get different ads depending on what other parts of the site they had clicked on beforehand. Changes to the site's ad content can be made in real-time, every second -- no printing is required, so there is no lag-time between the publication of the content and the reader's interaction with it. This difference allows for user-by-user customization of ads on websites – something that's impossible with print, TV, and radio media.
34
IV.
The Trouble with Targeting
The first two sections have sought to situate online advertising in its traditional roots, to describe what behavioral targeting is, and to explain why this sort of customer tracking is uniquely possible on the Web. In this section, I turn to the normative question of whether targeting is a good thing. Do its benefits outweigh its costs? a.
Benefits
Industry insiders and others have touted Web behavioral targeting as a revolutionary new way to deliver advertising to consumers.
35
As one outsider has characterized it, this ad targeting "represents a quantum leap in the ability of advertisers to reach desired market segments at relatively low cost."
36
Proponents of behavioral targeting say that the ability to customize ads based on each individual consumer's
34
See id. (noting that "advertisements for traditional television programming cannot be targeted on a per viewer basis").
35
See Freeman, supra note 31 (describing targeting's benefits).
36 See Menell, supra note 32, at 1370.
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 preferences – at least as demonstrated by her online behavior – is not only an advantage for the advertisers, it also brings benefits to consumers, who get to see ads more relevant to their lifestyles.
37
Microsoft's chief advertising strategist has said that targeting enables consumers to get "content about things and messaging about things that are spot-on to who you are."
38
When Google took steps to inject a behavioral approach into its highly touted AdWords business, its business products manager for ad quality noted that "the data [from early tests] all show users are getting a better experience." 39 The CEO of a major ad agency has said, "[I]f we can get more data, we could put more ads in front of people who are interested in them…that's the whole idea here: put dog food ads in front of people who have dogs."
40
Lawrence Lessig has provided qualified praise for effective behavioral targeting, calling it "the wonderful sort of discrimination that spares me Nike ads." 41
Closely related to these arguments in favor of online targeting is a more fundamental point: not only is Web advertising beneficial to consumers in an information-providing way, it also provides the funding necessary for them to enjoy
37
See Menell, supra note 32, at 1369 (noting that targeted advertising may make consumers "more likely to gain valuable information through advertising"). See also
Freeman, supra note 31 ("[S]tudies show that [behavioral marketing] also results in a better overall experience for consumers, who are more accepting of ads that give them information relevant to their interests.").
38 Story, "To Aim Ads…," supra note 20 (quoting Michael Galgon).
39
Zachary Rodgers, Google Targets Search Ads on Prior Queries, a la Behavioral ,
July 31, 2007, available on ClickZ's website at http://www.clickz.com/showPage.html?page=3626593 (describing Google's foray into behavioral targeting).
40
Story, "To Aim Ads…," supra note 20 (quoting David Verklin, CEO at Carat
Americas, part of the Aegis Group)
41 Lessig, supra note 3, at 219.
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 website content free of charge.
42
This perspective – "content is cheap – often even free – because advertisers support it" 43 – has been the mantra of advertisers in America for decades. Proponents of behavioral targeting online argue that the ability to reach a more targeted audience online is one of the major reasons why companies advertise on the
Web; if targeting were restricted, they would advertise elsewhere. The consequential lack of advertiser support would force websites to charge people to access content that was formerly free. As Jennifer Granick points out in a 2007 Wired article:
[A]dvertising makes the web go 'round. Without advertising, creators must rely on subscriptions or donations to survive, neither of which has proven a reliable source of income for online publishers. The majority of the most popular blogs carry ads , the revenue from which keeps good writers gainfully employed. What happens to the Boing
Boings of the blogosphere if ads do not work?
44
Being tracked online is thus the price consumers pay to keep their Web content free.
45
These arguments in favor of liberal ad targeting practices on the Web are certainly forceful in some respects. However, the theoretical justifications are difficult to match up with the way Web companies execute ad targeting in practice: in secret, largely without
42
See Penenberg, supra note 23 ("[w]hat keeps [the Web] cheap and convenient…is that it's an advertisers' medium"). For a critical look at the implications of advertiser-funded content, see Turow, supra note 12, at 106 (arguing that "[a]n adsponsored universe has profound implications for the production of entertainment, news, and information").
43 Turow, supra note 12, at 104. Turow argues that "turning over the support of much of the U.S. media system to advertisers has ensured that media firms fundamentally shape the main streams of entertainment and news into environments that harmonize with sponsors' desire to sell their products." Id.
44
Jennifer Granick, "Online Advertising: So Good, Yet So Bad for Us," Wired ,
May 9, 2007, available at http://www.wired.com/politics/law/commentary/circuitcourt/2007/05/circuitcourt_0509.
45
Some proponents have gone even further, claiming that restricting online ad tracking would limit an "extraordinary pattern of innovation" going on within the online advertising industry. Story, "FTC Member Vows Tighter Control…," supra note 1
(quoting Randall Rothenberg, president and CEO of the Interactive Advertising Bureau).
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 consumer knowledge or consent. As the next section illustrates, this sort of stealth consumer tracking has important negative implications, both at the "micro" level of the individual consumer and the "macro" level of society and the Web. b.
Costs
Online consumer tracking can be criticized on a number of levels, many of which are beyond the scope of this paper. Here, I emphasize what I consider the three most troubling implications of this practice as it exists today: one fairness, consumer-based point, and two broader issues bearing on targeting's impact on the Web and society.
Privacy expectations of consumers. First, Web companies violate the legitimate expectations of privacy consumers have regarding their activities online when they track their behaviors without explicit notice that they are doing so. Studies have shown that many consumers on the Web are blissfully unaware of the fact that companies are keeping track of their online activity.
46
Even where consumers have vague knowledge that some sort of tracking is going on, there is a "high level of concern associated with that tracking – even when it isn't associated with personally identifiable information." 47
46 See FTC Staff Proposes Online Behavioral Advertising Privacy Principles ,
Federal Trade Commission press release, December 20, 2007, available at http://www.ftc.gov/opa/2007/12/principles.shtm (noting that behavioral targeting practices were "largely invisible and unknown to consumers").
47
Anil Batra, "Consumer Awareness and Attitudes about Behavioral Targeting,"
Web Analysis, Behavioral Targeting, and Advertising Blog, available at http://webanalysis.blogspot.com/2008/04/consumer-awareness-and-attitudes-about.html
(citing study conducted by TRUSTe). A summary of the study is available at http://www.truste.org/about/press_release/03_26_08.php. See also Freeman, supra note
31 ("study after study shows that consumers have a generalized concern about their privacy when online").
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008
It appears that the general Web public expects much of its Web activity to remain unmonitored and private.
48 When one considers the non-transparent way in which companies go about tracking consumers, it becomes clear that companies are not dealing fairly with their Web consumers. As an attorney for a consumer group pointed out, "In the brick and mortar world, when you're asked for information, you can say no."
49
No similar choice exists online; consumers can hardly "say no" when they're not even
"asked."
Sense of Web security and anonymity. Second, the pervasive use of consumer tracking undermines our collective sense of the Web as a secure place where people can move freely from one site to another anonymously. One of the Web's prime virtues is its accessibility: at the click of a mouse button, a person with an Internet-ready computer can visit any number of websites on any number of topics. Another fundamental virtue of the
Web is the relative anonymity users enjoy – or think they enjoy – as they move from site to site.
50
One need not go out into physical public space, thereby potentially sacrificing one's anonymity, in order to engage in commerce or have conversations with friends (or strangers).
51
The aggregation of data about millions of consumers at the hands of private business entities -- even assuming perfect data security and pure intentions – undermines these foundational qualities of the Web and cannot help but evoke a Big Brother-like
48
See Lessig, supra note 3.
49
Story, "FTC Member Vows Tighter Control…," supra note 1 (quoting Amina
Fazlullah of the U.S. Public Interest Research Group).
50
See Lessig, supra note 3, at 34 ("[C]yberspace is different because of the reach it allows. But it is also different because of the relative anonymity it permits.").
51
See id. at 45 ("While in real space—and here is the important point—anonymity has to be created, in cyberspace anonymity is the given.").
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[redacted at student's request] Web Difference Seminar Paper aura.
52
May 9, 2008
Overcustomization and the segmentation problem. Third, tracking online behavior and then delivering ads exclusively based on advertisers' analysis of that behavior risks fragmenting the Web into individualized, insulated mini-Webs where advertising content is filtered and customized user-by-user. This is true regardless of whether the consumer has consented to being subject to targeted ads or not. In his book
Republic.com
, Cass Sunstein highlights the problems associated with uber-customization of Web content, arguing that a healthy system of free-expression depends on people encountering "materials they would not have chosen in advance" and on many citizens sharing a "range of common experiences."
53
He warns against the creation of a world of
"innumerable, diverse editions of the 'Daily Me'" – i.e. customized versions of Web content built by the individual user.
54 Although Sunstein's argument pertains to content as pre-determined by the consumer , similar concerns apply when content – even of something as ostensibly mundane as advertising – is pre-determined by a third-party company. Jennifer Granick noted Sunstein's argument in a 2007 Wired article, and applied it to the advertising context:
Segmenting consumers by demographics creates the concern that users will be shown ads, or even editorial content, limited to what sellers believe is "typical," and that we will not be presented with novel choices or challenging information…Personalization, including targeted ads, is a mixed blessing: on one hand, personalized information is more useful and relevant to our lives. On the other, it reduces the opportunities for unanticipated encounters with ideas, people or products that may disturb or enlighten us. Personalization
52
See Batra, supra note 2, at 43 ("Big Brother has become a diffused digital omnipresence. Everywhere there are eyes and ears, though they may not necessarily be hostile.").
53
Cass Sunstein, Republic.com
, Princeton Univ. Press, Princeton (2001), at 8-9.
54 Id.
at 22.
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 also interferes with the development of common experiences that people can use to understand each other and make common decisions.
55
Behavioral targeting depends heavily on this concept of personalization, and risks stymieing creativity in advertising as well as reinforcing stereotypes about consumers' buying behaviors and preferences.
56
V.
Conclusions
After examining some salient arguments on both sides, where do we go from here?
The answer to this question is largely beyond the scope of this paper, but several options emerge.
First, Web companies should redouble their efforts to educate consumers about what behavioral targeting is, what data is being collected about consumers, and how they can limit or control the extent of data collection and ad targeting.
57
Second, the government should take a stronger stance on targeting. The FTC has broad power to enforce existing privacy laws and regulate other "unfair and deceptive"
55
Granick, supra note 44.
56
A related argument put forth by Lawrence Lessig further claims that consumer profiling undermines the sense of equality among Web users. According to Lessig, "An efficient and effective system for monitoring makes it possible once again to make…subtle distinctions of rank." Lessig, supra note 3, at 221.
57 See Granick, supra note 44 ("[W]e need to be sensitive to how modern advertising is novel and update advertising best practices -- and better educate consumers about information collection and advertising."). For an example of one type of industryled consumer education campaign, see "AOL Brings Out the Penguins to Explain Ad
Targeting," Bits: The New York Times Technology Blog , March 9, 2008, available at http://bits.blogs.nytimes.com/2008/03/09/aol-brings-out-the-penguins-to-explain-adtargeting-ok-saul-and-louise-post-with-article/ (describing AOL's consumer education campaign).
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 trade practices under its mandate in the FTC Act.
58
Although it seems to be taking steps toward addressing the problem of targeting, 59 it could do more. Bringing enforcement actions against companies who fail to adequately notify consumers of tracking practices, aggressively instituting a policy of industry self-regulation,
60
and initiating a widespread consumer education campaign about targeting are three possibilities.
Third, consumers who are uncomfortable with the level of tracking online should take steps to limit it where possible – either by "opting out" as allowed by Web companies, or by disabling third party cookies on their computer or Web browser.
Several software products make it possible for Web users to "anonymize" their actions on the Web, and every major internet browser allows users to block cookies.
61
Consumer feelings of trust and security on the Web are vital preconditions to a thriving online world of commerce and social life. While knowledge about consumer preferences is undoubtedly valuable to businesses engaged in online marketing,
62
58
See Jonathan D. Hart, ed., Internet Law: A Field Guide , BNA Books, Arlington,
Virginia (2007), at 356 (discussing the enforcement authority of the FTC and past trends in its attitude toward regulating online privacy). See also Freeman, supra note 31 (noting that the FTC Act "prohibits not just misrepresentations, but also the failure to disclose material facts, or the failure to make such disclosures clearly and conspicuously").
59
The FTC held two conferences related to online privacy risks to consumers in the past two years, including one entitled "Behavioral Advertising: Tracking, Targeting, and
Technology" in November 2007. In December 2007, the FTC released "a set of proposed principles to guide the development of self-regulation" of online behavioral advertising.
"FTC Staff Proposes Online Behavioral Advertising Privacy Principles," supra note 46.
60
For an argument that the FTC's self-regulation approach has been ineffective in protecting privacy online, see Hoofnagle, supra note 6, at 379-98.
61
See Hart, supra note 58, at 347 (describing cookie blocking options on popular
Web browsers). Consumers should be careful not to throw out the baby with the bathwater, however. See Penenberg, supra note 23 (arguing that non-third party cookies are essential to many websites' functioning and user-friendliness).
62
For a more extreme version of this point, see Batra, supra note 2, at 43 ("If businesses are totally prevented from gathering information about consumers, the economic consequences will be catastrophic.").
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[redacted at student's request] Web Difference Seminar Paper May 9, 2008 ultimately this information belongs first and foremost to the consumer. Gathering data and creating consumer profiles on the Web without adequately informing consumers violates widely-held privacy norms and undermines trust in the Web. As many commentators have noted, consumers would probably allow some tracking of their online activities in exchange for access to better website content or even more relevant advertising.
63
But this is a bargain that must be struck candidly. With proper consideration of the special attributes of life on the Web, regulators and industry must seek solutions that address the problematic aspects of behavioral targeting in a way that respects privacy interests of consumer-surfers while not unduly burdening innovation in advertising and e-commerce.
63
See, e.g., Freeman, supra note 31 (citing recent study which "revealed that consumers will give up some privacy when offered adequate value in exchange").
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