Connections between the offline and online worlds are often made via an e-mail address kept on record by a company that you do business with. That e-mail address could create a link to a composite profile made up of your online activities from sites such as social networks. By cross-referencing that e-mail address, advertisers can show you banner ads tailored to your spending habits and to your political views expressed on Twitter.
Real-Time Shark Bait
The second trend is a real-time ad-bidding technology that lets advertisers, such as Google and Yahoo, track users online and deliver customized third-party ads--all in the blink of an eye.
Here is how it works. As you go from site to site, advertisers can bid in real time to show you an ad tied to your online activity. For example, if you are shopping for a Nikon digital SLR camera, you may see an ad for a competing Canon DSLR model on the next site you visit. If you buy that Canon, advertisers can then bid--in a fraction of second--for the right to show you, on the next site you jump to, ads for lenses for that camera.
Advertisers can track you from site to site only if the same advertising company delivers ads to those sites. For instance, Google-owned DoubleClick delivers ads to thousands of the Web's top destinations. Its real-time ad-bidding program is called DoubleClick Ad Exchange.
Privacy Double Whammy
The rise of those two online marketing trends that create cunningly effective advertising campaigns--tailored in just a fraction of a second to a Web surfer's household income, interests, and online activity--may not be a real surprise. But privacy activists say that they go too far and that advertisers are unfairly tracking people and profiting from their data.
"Consumers will be most shocked to learn that companies are instantaneously combining the details of their online lives with information from previously unconnected offline databases without their knowledge, let alone consent," says Ed Mierzwinski of the Public Interest Research Group, a government watchdog organization.
The Center for Digital Democracy's Jeffrey Chester says that this type of advertising fosters predatory ads. Examples could be dubious health cures or high-interest loans for HDTVs.
The CDD, PIRG, and the World Privacy Forum have asked the Federal Trade Commission to look into ad networks such as Google's and Yahoo's. The groups seek more transparency from advertisers and a way for consumers to opt out of this type of profiling.
Advertisers have been sensitive to privacy concerns, according to the Ponemon Institute, a privacy research group. Ponemon says such concerns have prompted online advertisers to use behavioral ads 75 percent less than they would otherwise.
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