TruEffect Behavioral Targeting Still Has Flaws

Online ad-serving company TruEffect today will officially launch a new behavioral targeting service it's touting as relatively protective of consumer privacy. But advocates say the company's product, DirectServe, raises at least some of the same privacy concerns as other forms of behavioral targeting, or serving ads based on people's Web-surfing history and presumed interests.

The Broomfield, Colo. company says DirectServe, like other behavioral targeting systems, allows marketers to tag potential consumers and serve them ads across the Web. But the difference between DirectServe and many other behavioral targeting platforms is that it enables marketers to track people via first-party cookies--like those used by Amazon.com, for instance--rather than the so-called third-party cookies used by companies like many other online ad companies.

That distinction is a potential boon to marketers because many consumers routinely delete so-called third-party cookies, either manually or through the use of anti-spyware programs.

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Although the company officially debuts today, it has quietly been testing DirectServe with marketers including cable company Comcast, a credit card company and a museum. Nelson says the company has deals to serve ads on publisher sites including Yahoo and MSN.

TruEffect also says its platform gives marketers direct control over the analytics' data. "If they want to take the log file data that is an artifact of our serving the campaign, so they can have it and control it and analyze it, they can do that," said Scott Nelson, executive vice president and chief operating officer.

In its promotional materials, the company says DirectServe "enhances consumer privacy," in part because it "eliminate[s] secondary uses of data"--such as segmenting customers into buckets based on their behaviors at a variety of sites. But some advocates say the company nonetheless poses potential privacy risks because it's still tracking people and then serving ads in ways that might not be completely clear to users.

"The privacy issues, for all intents and purposes, are still going to be there," says Pam Dixon, executive director of the World Privacy Forum, which is one of the groups that has called on the Federal Trade Commission to create a do-not-track list for consumers who want to opt-out of behavioral targeting online. "I'm not so sure that with the way cookies are dropped today, whether it's a first-party cookie or third-party cookie is what we need to care about."

Dixon added that when it comes to privacy, the most important considerations include whether consumers realize they are being tracked and whether they have the ability to opt-out.

Nelson said that TruEffect is working with marketers to ensure that consumers who want to opt-out of the program can do so at individual advertisers' sites.

Despite the concerns, Alyssa Cooper, chief computer scientist with the Center for Democracy & Technology, says DirectServe is potentially preferable to some other companies because it does not aggregate data about users from a variety of sites.

"Sectioning a person off into different profiles based on which advertisers they're communicating with is certainly better than having one massive profile that knows everything about you," she said.

The FTC late last year proposed principles for behavioral targeting. Among them was that all Web sites that collect data used for behavioral advertising should inform people in "a clear, consumer-friendly, and prominent statement" and give them the ability to opt-out.

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