FTC Probe Of Mobile Ad Industry Puts Bidstream Data Under Microscope

Bidstream data, a little-known online mobile tracking tactic outside the advertising industry, recently caught the attention of members of the U.S. Congress.

In a letter, lawmakers asked the Federal Trade Commission to open an investigation into the mobile advertising industry’s practice of “covertly” tracing and tracking consumers across the internet using digital display ads.

The letter said few “Americans realize that companies are siphoning off and storing” personal data to compile profiles on them.

For those who don’t know, bidstream data comes from ads on website and mobile applications to gain sensitive information about consumers that can include “real-world locations and information about their age and gender.” It is packaged and sold by data brokers.



The report about the letter cites one data broker, Mobilewalla, which used the data to analyze the demographics of attendees at recent Black Lives Matter protests. In 2017 the company’s CEO said the company uses mobile location to identify Americans who visited places of worship, to build advertising profiles that can be targeted at religious Americans.

It’s no surprise to those in the advertising industry. In fact many have known about the use of bidstream data from conception of the practice. Most do, however, condemn the resale of the data without the permission of the individual to which the data belongs.

Advertising industry executives like Arsen Avakian, CEO and founder of Cooler Screens, say technology can be sophisticated enough without compromising personal information. “Privacy needs to be designed into the technology,” he said.

Much of the technology is “part of the old generation of designing ad targeting without thinking consumers will be okay with it,” Avakian said. “If you don’t need the data to target ads you never need to collect it. It is part of a framework called Privacy By Design.”

Avakian uses the phrase “identity blind” to demonstrate that advertisers can target consumers and never collect or use their personal identifiable or linkable information.

Cooler Screens makes a technology that serves up an ad on the door or a freezer or a refrigerated case in a store. If a consumer stands in front of the refrigerated ice cream section for seconds without opening the case, we’re pretty sure you’re looking for some type of ice cream.

This is a way to target ads to consumers without “crossing the sacred line without the consumer’s consent,” Avakian said.

Interactive Advertising Bureau (IAB), the industry trade association, isn’t against bidstream data, but condemns the ability to siphoned off the data and sell it for other purposes, said Luke Taylor, founder and COO at ad fraud solution providers, TrafficGuard.

“Without bidstream data, programmatic advertising as we know it just wouldn’t work,” he said. “Advertising would become far less effective and harder to scale, and ultimately much more expensive.”

There are downstream effects, too. For example, the smaller publishers and content producers that rely on ads to make money would find that because their audiences are smaller and users can’t be targeted as precisely, their advertising inventory would become less valuable.

“Pulling one lever with advertising potentially reduces choice, innovation and creativity as smaller digital content providers find it harder to monetize their inventory,” Taylor said.

Privacy in digital advertising remains under the microscope with initiatives to remove third-party cookies and making IDFA tracking opt-in on Apple devices. While it makes sense for the IAB to condemn any alternative use of bidstream data outside of advertising, if it’s removed from “digital advertising’s targeting tool kit, along with 3rd party cookies and Apple’s IDFA,” it will create even more challenges.

“You only need to look to Cambridge Analytica as an example of the potential social corruption that can occur when this data is misused,” Taylor said, adding that regulation is required to protect consumer privacy.


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