Friday, September 25, 2009

The Looming Battle Over Targeted Ads

LOS ANGELES -- No one disputes that ads are a critical part of the Web's information ecosystem. News Web sites like this one depend on them for nearly all their revenue, as do sites like Facebook and YouTube that have changed the way we communicate online.

What generates a lot of debate are the increasingly sophisticated methods for selling ads targeted to narrow segments of Web users. Today, Web sites ranging from tiny blogs to newspaper publishers to digital giants such as Google ( GOOG - news - people ) engage in a practice called behavioral targeting, a method of compiling data about which sites people visit, what topics they search for and an array of other Web activities to better surmise what types of ads might prompt them to make purchases.

Earlier this month, representatives from 10 consumer advocacy groups, including the Electronic Frontier Foundation and Consumer Federation of America, urged Congress to enact a set of laws governing what types of data Web sites and data collection firms can compile. To date, the Federal Trade Commission has issued a set of recommended principles for behavioral targeting and left companies and trade groups to regulate themselves. Privacy advocates call the current system inadequate.

Rep. Rick Boucher, D-Va., the chairman of the House Energy and Commerce Subcommittee on Communications, Technology and the Internet, says he is working on a bill that would outline broad restrictions on certain types of data collection and ad targeting. Speaking in front of Congress this month, Boucher said he hopes to draft a bill of rights, of sorts, regarding online ads.

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