• by Wendy Davis  @wendyndavis, October 8, 2008

The influential privacy organization Center for Digital Democracy has asked authorities in New York and California to investigate ad targeting on MySpace and Facebook.

"Few MySpace users know what data is being collected and how it's used," Jeff Chester, executive director of the group, wrote in a letter sent Tuesday to state attorneys general in New York and California. "The analysis of user information, including profile data, raises many concerns (including its availability for advertisers and outside third-party developers)."

The Center for Digital Democracy also forwarded its concerns to the Federal Trade Commission, EU officials and Rep. Ed Markey (D-Mass.) to examine ad targeting on social networking sites, Chester said.

The group's objections to MySpace partly stem from the relatively new "hypertargeting" system. Unlike typical behavioral targeting programs, which serve ads to users based on the Web sites they visit, MySpace's hypertargeting program sends ads to members based on information they have uploaded to their profile pages. For instance, someone who writes on his profile that he likes movies could be put into a "movies enthusiast" bucket, and then might receive film ads.

MySpace also combines information that users have provided about their interests with demographic information, to create more precise profiles.

Like conventional behavioral targeting programs, hypertargeting is anonymous, because the system allows marketers to send ads to groups of users who meet demographic or interest-group profiles, but not to specific, named individuals.

A MySpace representative said the company discloses the hypertargeting in a privacy policy, and allows users to opt out.

Facebook says on its Web site that marketers can target ads based on "age, gender, location, interests, and more." A spokesman for the social networking site said the company gives users control over the information they share and "provides advertising that is useful, relevant and consistent with users' choices."

But Chester says he doesn't think users--especially the sites' teen members--understand the extent of online targeting, or that they might receive ads based on information they have posted.

"We cannot allow social media marketing to be a data-collection black box," he said. "We think that MySpace and Facebook and all of the companies need to completely disclose how data is being collected and how it's being used. This needs to be a completely transparent process, and then it needs to be evaluated by regulators on both sides of the Atlantic."

A spokesman for the Attorney General of California said the office had not yet received the letter. The New York Attorney General's office did not return a telephone call seeking comment.

The Center for Digital Democracy has played a key role in sparking recent public debate about online advertising. Two years ago, the group filed a complaint with the FTC about behavioral targeting, which spurred a two-day "town hall" meeting. That complaint is still pending--and the FTC, which last year proposed voluntary behavioral targeting guidelines, continues to investigate online ad companies.

Chester also was among the leading opponents to NebuAd's plan to purchase information about users' Web histories from Internet service providers for ad-serving purposes. Faced with congressional pressure, NebuAd recently suspended its plans to work with broadband providers.