• by Kate Kaye , April 27, 2004

When news broke that JetBlue Airways had transferred passenger data via a third party to the Department of Defense, the blood pressure of many air travelers went sky high. The fact is, the big brother concept is not a pleasant one for most people. And as the surfeit of third-party Internet advertising technologies continues to expand, privacy issues keep coming to the fore.

Tacoda Systems' newly introduced behaviorally targeted ad network AudienceMatch, for example, has already given rise to privacy-related inquiries. When the new network is fully operational, the company will take user interaction information gathered on publisher partner sites through its Audience Management System and apply it to target advertising running on the AudienceMatch network of sites. Data collected on a particular user via one site may be employed to target an ad to that user while visiting another site. The practice of third parties using data harvested on one Web site for use on another is not an uncommon practice in the online ad world.

However, it begs the question: Are Web users aware that third parties collect their data? In terms of Tacoda's network offering, users will be notified through the privacy policies of publishers whose users are tracked by the Audience Management System. Says Tacoda CEO Dave Morgan: "Most publishers have privacy policies that are already consistent with AudienceMatch." He adds that the system will be fully compliant with standards developed by the Network Advertising Initiative (NAI), a cooperative group of network advertisers that counts ad management companies such as DoubleClick and aQuantive, Inc.'s Atlas DMT among its members.

"Tacoda is in the process of implementing NAI principles and joining the NAI," says Trevor Hughes, executive director of the NAI. The organization developed privacy principles five years ago, and enables users to opt-out of both DoubleClick's and Atlas DMT's systems through its Web site. Consumers who want to opt-out of Tacoda's system will be able to do so soon through the NAI, according to Hughes.

Hughes says the number of people who have chosen not to have their data collected or stored by DoubleClick and Atlas DMT is "in the thousands." This information is difficult to track because opting-out requires downloading a cookie, and many of those who have opted-out in the past have since cleansed their computer systems of that opt-out cookie. It may seem counterintuitive that companies that earn their keep by collecting and arranging data would promote such an option. "If someone doesn't want to be a part of their programs, they don't want them to be," comments Hughes, in regard to DoubleClick and Atlas DMT.

Ad-targeting and optimization company Poindexter Systems enables users to opt-out from its system by clicking a link in the privacy policy section of its Web site. An opt-out cookie placed on the user's computer tells the system to no longer assign cookies to that user. According to Poindexter COO Ted Shergalis, the company employs an outside auditing firm to ensure that it is in compliance with the privacy standards.

Most third parties, including Tacoda, DoubleClick, aQuantive, and Poindexter, do not collect or store personally identifiable user data. But many third parties do store non-personally identifiable data such as demographic and geographic information. For instance, Poindexter actively uses advertiser data for six months, and then continues to store it for future use by that advertiser.

According to Scott Eagle, chief marketing officer at Claria Corp., the firm stores user data for 90 days only, and then updates it with fresh user data. Claria targets ad units like pop-ups and pop-unders to users who register to download its free software in exchange for allowing the company to track their Web behavior.

Tacoda, on the other hand, does not store user data at all. Morgan insists that user information is used in real-time and then dropped down the memory hole. "As we see the growth of targeting continue and accelerate, he predicts, "we're going to see data harvesting and ownership become a critical privacy issue."

Editor's Note: Claria does not use or store personally identifiable information on the users in its network, according to Scott Eagle, chief marketing officer, Claria Corp.