• by Diane Mermigas , March 13, 2008

Audience behavioral targeting and data tracking are becoming a more precarious double-edged sword for consumers, advertisers and Google-inspired Web masters. The creation and use of an individual's digital footprints are at the core of exploding online advertising. It is becoming the driving tenet by which business is conducted in the digital marketplace. Eliot Spitzer's fall from grace this week is one of the most dramatic examples of the potentially destructive power of the electronic information system enveloping users of digital interactivity.

What led the FBI and the Internal Revenue Service's Criminal Investigation Division to Spitzer was a complex electronic "paper trail" gleaned from a wealth of data collected in a money-laundering investigation intended to identify terrorist activity. Spitzer was done in by suspicious activity reports that banks are required by law to file regarding regular, large, unaccountable movement of cash. There reportedly was a string of telephone wiretaps, computer records and other electronic evidence.

Spitzer's data downfall is connected, in part, to a universal glut of data exchanged on the Internet and wireless digital platforms. It is permanently stored on servers and is instantly retrievable. Spitzer's tragedy should harbor lessons for all concerned. Digital electronic data--in all of its ubiquitous, uncontainable glory--is the new standard currency. There is no going back--and there is no sure solution to prevent its abuse.

The data collected, stored, sifted and endlessly analyzed assures delivery of content, products and services that are most relevant to individuals. It also creates a personal data chain that can threaten the privacy of individual consumers: tracking every electronic move from e-commerce transactions and Web searches to emails, blogs and chats.

Many argue that this is the tradeoff for personal convenience and a more efficient marketing and commerce machine that will create new business and wealth. It is an unprecedented value chain linking consumers to commerce. Even one report of misuse, recklessness and violations regarding the use of personal information is too many. Regular reports about employee or personal Web or computer data being stolen or lost raises the call for regulation--which has yet to materialize. Even the Federal Trade Commission and the European Union in approving Google's $3.1 billion acquisition of DoubleClick reiterated a preference for self-policing, insisting that "privacy considerations" are outside their venue.

Unless or until data-mining tactics become more obvious and offensive, as they did with Facebook's short-lived Beacon experiment, technology empowered-consumers may not even be aware of the electronic footprints they leave--or how it can come back to haunt them. A Pew Internet & American Life Study Report concluded that most Internet users do not know what information is available about them online. Most haven't taken any steps to protect themselves.

A recent comScore study reported that Google, Yahoo, Microsoft, AOL and MySpace recorded at least 336 billion "data transmission events" recorded on Web company servers tracking things like ZIP codes, key word searches and online purchases--not including their branded ad network sites or social networks. Yahoo alone had more than 1,700 sources for collecting such data; all Internet search engines are acquiring companies specializing in rich consumer data. The average online user incurs some 811 information collection events in a month. Although connected, consumers generally say they want their privacy protected and don't want advertisers tracking their every move. They also insist on more efficient personal online searches. That is the big loophole through which Google, other Internet players, and advertisers are barreling--and it explains the attraction behind a multibillion-dollar union between Yahoo and Microsoft or AOL.

Discussions with Google on the subject often lapse into placement of cookies on the ad network and on ads, and tracking aggregate rather than individual user behavior. Google is not working in a vacuum as it becomes the ultimate public service company and commercial monster by storing personal medical data, constructing personally relevant home pages and playing host to every kind of intimate data stored on its nearly 1 million servers worldwide. Its partners include Publicis Groupe, Echostar, cable operators and the Feds.

AOL is resorting to the dumb-down approach to head off a groundswell of user outrage over behavioral targeting by relying on the charm of an instructive animated penguin online. Internet giants say they are committed to practicing "safe" behavioral targeting, just as they are committed to generating revenues from matching target consumers with the advertisers, content and services that interest them. Make it relevant enough and consumers may overlook all the rest.

It is the Catch-22 at the heart of the digital interactive economy. Advertisers and agencies that have migrated from unqualified audience-size estimates for television to promised click accountability online are not about to forfeit the promise of morphing their businesses. With online advertising expected to grow at least 17% annually through 2011, and all other general ad revenues growing well below GDP, there is little doubt that hyper-targeting for ads is here to stay.

All there is left to do is to track the fallout: one person and one cookie at a time.