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Groups want probe of real-time advertising technology

SAN FRANCISCO — Three advocacy groups said Thursday that they filed a complaint with the Federal Trade Commission requesting an investigation of the use of technology by Google Inc., Yahoo Inc. and others that can let outside marketers instantly analyze individual Internet users to place advertising through online exchanges.

The Center for Digital Democracy, U.S. PIRG and World Privacy Forum said they have asked the FTC to look into "the growing privacy threats" presented by such advertising programs. In particular, the groups single out "real-time bidding" technologies.

"Increasingly and largely unknown to the public, technologies enabling the real-time profiling, targeting and auctioning of consumers is becoming commonplace," the groups said in a statement. "This massive and stealth data-collection apparatus threatens user privacy."

The groups are asking for an investigation and a requirement for companies to make targeting programs "opt-in" for users. Internet companies largely have required users to opt out of targeting programs.

Google, Yahoo and other major Internet advertising companies are developing new ways to tailor ads by tracking users' online history — and can even auction off individual customers to advertisers in the few milliseconds between a person clicking a link and the page appearing on their screen.

But with Internet advertisers increasingly adept at targeting individuals based on the digital bread crumbs they leave as they click through the Web, "behavioral advertising" is also attracting greater scrutiny from government regulators, politicians and interest groups concerned about user privacy.

Internet companies say such targeting pays off for consumers and advertisers, because it is more likely to serve up ads people are actually interested in. Critics counter that most Americans do not want advertising tailored to their interests, particularly when it requires tracking their online movements.

"It's kind of like the Wild West out there with behavioral advertising, where clearly the technology is miles ahead of our ability to regulate all the things that are going on," said Conrad MacKerron of the San Francisco-based As You Sow Foundation, which advocates for corporate responsibility. The foundation will offer a shareholder proposal at Google's annual meeting May 13 asking for stronger privacy rules for personal data collected for behavioral ads.

Google launched what it calls "interest-based advertising" last year, saying it would make advertising more relevant by tracking users and categorizing their interests in topics such as sports, gardening, cars and pets. "Users get more useful ads, and these more relevant ads generate higher returns for advertisers and publishers," Susan Wojcicki, a senior Google executive, wrote on a company blog post.

Sensitive to privacy concerns, Google offers a Web page (google.com/ads/preferences) where users can opt out of the advertising cookie that tracks their movements. The service remains in beta mode, a Google spokesman said last week.

Online advertisers have long had the ability to target consumers based on wealth, gender, age, education, personal interests or physical location, but the emerging technology of "real time" offers the additional dimension of immediacy. In September, Google opened up its DoubleClick ad exchange to real-time advertising, in which Google acts as a middleman in a nearly instantaneous auction where advertisers buy access to consumers based on their Web history.

For example, if a consumer's history reveals that he has just bought a camera online, real-time bidding could allow advertisers to show ads for photography accessories or services.

"The game-changer in real time is that advertisers get to make much more data-rich decisions on the fly about which ads to show, as well as about which ads not to show," said Michael Rubenstein, president of AppNexus, a real-time advertising platform working with San Jose-based eBay and other advertisers.

Sunnyvale, Calif.,-based Yahoo, meanwhile, is testing improvements to real-time ad bidding technology on its Right Media exchange, and now aims to match an advertiser with a consumer in the 50 milliseconds or less before a page loads.

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