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FTC Asked To Investigate Online Ads
David Utter
Staff Writer
2006-11-03
 Insider Reports RSS Feed
A pair of advocacy groups have filed a complaint with the Federal Trade Commission over the various practices of online advertising companies, including Google, Yahoo, and Microsoft.
 | | "Privacy vs. Targeted Advertising" |  |
The essence of effective advertising is to know one's audience. If a seller of power tools and work gloves suddenly diverges by adding a line of scrapbooking products, the new items probably won't sell very well no matter how much advertising they do. It's not in the niche customers expect to see from the marketer.
Google CEO Eric Schmidt has complained about untargeted ads on TV, and wondered why he should have to see ads for products that do not interest him. His company and its close competitors have worked hard at finding ways to improve the targeting of advertising.
Efforts by those companies may have been a little too successful. The complaint from public-interest advocates the Center for Digital Democracy and the U.S. Public Interest Research Group calls the methods of online ad firms into question.
"The data collection and interactive marketing system that is shaping the entire U.S. electronic marketplace is being built to aggressively track Internet users wherever they go," CDD said, "creating data profiles used in ever-more sophisticated and personalized "one-to-one" targeting schemes."
Through the use of tracking technologies that go well beyond the comparatively simple field of server log analysis, the two groups believe such sophistication gives companies much more information than they should reasonably need to sell online ads.
"The emergence of this on-line tracking and profiling system has snuck up on both consumers and policymakers and is much more than a privacy issue," said U.S. PIRG Consumer Program Director Ed Mierzwinski. "Its effect has been to put enormous amounts of consumer information into the hands of sellers."
To satisfy these concerns, the two groups want the FTC to crack down on technologies like Microsoft's new adCenter, a self-service online advertising product. The complaint called adCenter "a wide-ranging data-collection and ad-targeting scheme that is deceptive and unfair to millions of users."
"Microsoft, like Google and Yahoo, is actively rewriting the rules that govern the online marketplace," said Jeff Chester, CDD executive director. Among his organization's requests: injunctions from the FTC to halt abusive consumer information collection practices.
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Tag: Online Advertising
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About the Author:
David Utter is a business and technology writer for SecurityProNews and WebProNews.
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