• by Wendy Davis  @wendyndavis, March 11, 2009

Now, when Google serves banner ads on outside publishers' sites, the ads will include links that provide more information explaining why they were served. Clicking through will lead to details about the company's behavioral advertising program, which categorizes consumers as interested in particular types of goods or services based on the sites they visited.

The program is only in beta for now, but once Google signs up publishers, consumers will be able to view the categories they have been placed in--such as "interested in travel"--and also tell Google to remove them from whatever buckets they wish.

Consumers also will be able to opt out of the program permanently via a browser plug-in. Or, if people want to receive ads for certain types of products, they can edit their profiles to reflect that--in effect, opting in to particular types of ads.

Google's new measures come at a time when online behavioral targeting is facing increased scrutiny. Last month, two Federal Trade Commissioners warned that the online advertising industry could face new laws if it didn't take steps to self-regulate on privacy issues.

Recently, Google rival Yahoo announced enhancements to its privacy policies. Among other changes, Yahoo said it would allow consumers to opt out of behavioral targeting on its own site.

Google's move drew praise from the Interactive Advertising Bureau's Mike Zaneis, vice president for public policy. "It's really a consumer empowerment tool, which is great," he said. "It's one more example of how industry is competing on the privacy issue, to the benefit of consumers--and also to the benefit of businesses."

But not all observers were as enthusiastic. Amina Fazlullah, media and telecommunications counsel at the U.S. Public Interest Research Group, praised Google for attempting to address some concerns that advocates had raised. "I welcome any attempts by them to create more transparency and consumer control," Fazlullah said.

The U.S. Public Interest Research Group, along with the Center for Digital Democracy, spurred much of the recent public debate about online advertising and privacy by filing a complaint with the Federal Trade Commission in 2006.

Fazlullah added that she was disappointed with Google's decision to continue with an opt-out regime--which means that only the most sophisticated, privacy-aware consumers will make use of the new controls. "If they asked people, 'Do you really want to be followed around and served ads,' most people would say no. Most of us don't really value advertising in any solid way."