• by Wendy Davis , Staff Writer @wendyndavis, August 2, 2010

Last year, Pace University computer science professor Cathy Dwyer reported that a visit to Levis.com resulted in at least nine separate companies dropping Web beacons on her computer. At the time, not one of those companies was mentioned in Levis.com's privacy policy.

Now, The Wall Street Journal has repeated Dwyer's research on a larger scale. The newspaper looked at the top 50 U.S. Web sites and found that, on average, they dropped 64 pieces of tracking technology -- like cookies or beacons -- onto users' computers.

This technology is used to trail users across the Web and create marketing profiles of them based on sites visited. Marketers can then send targeted Web ads to users who are thought to be interested in buying particular goods.

As the article points out, the profiles are "anonymous" in that companies don't know Web users' names or addresses. But one problem is that it's possible to figure out people's identities from anonymous information, provided the information is sufficiently detailed.

The paper's report, which went live over the weekend, already is riling the industry, leaving online ad industry executives scrambling to reassure the public that they provide clear notice, allow users to opt out of ad targeting and don't collect users' names.

But many publishers omit far more information than they provide when discussing behavioral targeting. Critically, although some publishers acknowledge that they use ad networks, many publishers don't name those networks, but instead simply provide links to the Network Advertising Initiative -- which doesn't give users specific information about which networks are amassing information from which publishers.

Publishers' reasons might be understandable -- some appear to be worried that marketers will go directly to the intermediaries -- but the result is privacy polices that are less than transparent about online advertising. Yes, tech-savvy users can download plug-ins that will let people know which companies are installing code on their computers. But publishers shouldn't make users jump through those kinds of hoops to learn the names of companies that might be using targeting technology.

For the online ad industry, this article comes at an inopportune moment. Rep. Rick Boucher (D-Va.) and Bobby Rush (D-Ill.) have drafted privacy legislation, the Senate held a hearing last week, and the Federal Trade Commission is preparing to release a report this fall.

Already some reformers, like Jeff Chester, are planning to leverage the Journal's article. "Privacy advocates will be holding up the front page of the Wall Street Journal when they lobby the Hill over the next few weeks, as the Rush-Boucher Bill moves forward," says Chester, executive director of the Center for Digital Democracy.

Meanwhile, some industry executives are calling attention to a piece by media commentator Jeff Jarvis, who takes issue with the Journal's article. But Jarvis is hardly endorsing current practices. "If I were an advertising-supported site, I'd be aggressively transparent," he writes. "I'd tell you exactly what we track and what impact that has on what we serve in advertising and content. I'd create an app to read the cookies placed just for you and explain them."

If more publishers had done so, the online ad industry might not be facing the threat of regulation.