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)

The Network Advertising Initiative, an industry trade group that counts Yahoo along with AOL and Microsoft subsidiaries as members, began a study about seven months ago to clarify the boundaries.

Carl Fremont, whose advertising agency Digitas handles many pharmaceutical campaigns, said several ideas have been shot down by lawyers at drug companies. He would not name any, and three major drug companies did not respond to requests for comment.

Fremont, the agency's executive vice president, said he sees opportunities in reminding known patients to take their medication or perhaps try a competing drug.

Despite the promises, targeting isn't always appropriate for Web sites and advertisers.

Although sites can charge more per targeted ad, fewer readers see any given one, resulting in less revenue in some cases, said Brian Quinn, vice president of ad sales for The Wall Street Journal's Web site and three other Dow Jones & Co. properties.

"We just end up selling the frosting and not the whole cake," he said.

And while targeting may work for cars and travel, it's more difficult to gauge a person's interest in soda or satellite TV service. In such cases advertisers often prefer mass amounts of cheap, untargeted spots, said Sarah Fay, chief executive of ad agency Carat.

Advertisers and Web sites also have to figure out how far they can push without alienating their users.

Many Facebook users, initially unaware that tracking was occurring, have complained that the site went too far in generating endorsements based on friends' online activities. On Thursday, Facebook agreed to offer better notification and controls, and the company is counting on users to feel more comfortable about the tracking over time.

Users' comfort with data profiling has indeed shifted over the years.

Google faced criticism when it introduced an e-mail service that paired ads with the words inside private messages. Millions of people now use Gmail with scarcely a blink.

Users will eventually embrace the latest tactics, too _ and by then, they'll complain about even deeper levels of intimacy yet to be invented, said Tracy Ryan, professor of advertising research at Virginia Commonwealth University.

"You want to have enough targeting that a consumer notices the message and pays attention, but you don't want it to be so obvious that they are thinking (there) is targeting," she said. "That would be scary."