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ISPs enter the targeted ad game

Direct marketing is big business online. But this business shift has privacy advocates worried.

By Nida NajarContributor for The Christian Science Monitor / July 9, 2008

Scott Wallace – Staff


Until recently, Internet service providers (ISPs) were just that: a bare-bones channel through which the Web flowed to customers.

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They were stuck manning the Internet spigot as Google and Microsoft lapped up the profits from incredibly successful targeted ads. Every time users type in search terms or read letters in Gmail, the company learns a little more about what ads might appeal to them. Online social networks such as Facebook have also cashed in on direct marketing by picking up keywords in user profiles.

But now, many ISPs want in on targeted advertisements. From their perspective, they are the best source for user data. Google can only track what users do on its sites. But since ISPs control the flow, they can monitor everything a customer does online.

It’s the marketing mother lode, but this shift in business practices worries some privacy advocates.

“There is a definite push for more data collection,” says Alissa Cooper, chief computer scientist at the Center for Democracy and Technology. “[ISPs can also] collect your search terms. They claim they limit that. We haven’t done independent research, but if you look at the capabilities of their devices, they’re certainly capable of looking at other types of traffic.”

Ms. Cooper’s colleagues take up this issue in a Senate Commerce Committee hearing this week. After a recent scandal where British Telecom reportedly tracked user data without alerting its customers, Congress wants to iron out what American ISPs are allowed to monitor and how much they need to disclose.

Already, 70 percent of Web users are aware that their Internet footsteps may be tracked for advertising, according to a TrustE survey cited by CNET. Yet just 23 percent are comfortable with such online tracking, even if companies agree not to share the information.

Even if Web users accept some online snooping, few expect ISPs to be the culprits, says Wendy Seltzer, a follow at Harvard University’s Berkman Center for Internet and Society.

“There is a difference between going to a site that you know will be including advertising and going to an ISP who you expect to be a simple carrier,” she says. People can easily choose whether or not to use Google sites, but it’s much more difficult to switch ISPs.