Ad Targeting Improves on Web Sites

Facebook CEO and founder Mark Zuckerberg speaks to press and advertising partners at a Facebook announcement in New York in this November 6, 2007 file photo. The online hangout is mining friends' buying habits, and other major Internet portals have bought companies to expand their reach and capabilities for "behavioral targeting" _ all so advertisers can reach those most likely to buy with pitches most relevant to them, even as doing so means amassing more data on you. (AP Photo/Craig Ruttle, file) (Craig Ruttle - AP)

They can also target more smartly using surfing patterns across a broader set of sites, or in Yahoo's case letting United Airlines customize ads by inserting city pairs and prices specific to the individual user.

Consumers are having trouble understanding all that Web sites are up to, said Ari Schwartz, deputy director of the Center for Democracy and Technology.

The Federal Trade Commission recently held hearings at which consumer-protection and privacy groups including Schwartz' called for the creation of a "do not track" list.

The Web portals, particularly Time Warner Inc.'s AOL, are stepping up their educational efforts in response to privacy concerns, trying to sell Internet users on the idea that if they are to see advertising to support free services, a targeted, relevant ad is far less annoying.

They also stress that they aren't capturing sensitive information like names and e-mail addresses, and in many cases consumers can take steps to decline targeted ads.

Indeed, companies aren't going as far as they could.

"At the end of the day, if behavioral targeting is being used and consumers get annoyed, they are going to take it out on the advertiser or the publisher that placed the ad," said Michael Cassidy, chief executive of Undertone Networks, which contracts with a network of third-party sites to run ads.

Most Web sites and marketers have been shunning the ultimate targeting _ ads that greet you by name.

Yahoo could easily do that using registration information, but "I'm not sure people would like that or not," said Richard Frankel, Yahoo's senior director of product marketing.

Many have declined to sell ads based on diseases you've read about.

"We could track them and target ads for sensitive health conditions and get lots of money from pharmaceutical companies for that, but there are certain things we've chosen not to do," Dave Morgan, a senior AOL advertising executive who founded Tacoda, a behavioral-targeting company AOL bought in September.

"Sensitive" includes all targeting to HIV and cancer. Beyond that, health ads are reviewed on a case-by-case basis, Morgan said.