In May, Charter Communications, one of the nation's largest Internet service providers, sent letters to hundreds of thousands of its customers promising "an enhancement coming soon to your Web browsing experience." This was a heroic bit of corporate doublespeak—Charter planned to "enhance" its service by installing software on its Internet lines to scrutinize its customers' browsing habits. The company's aim: to sell lucrative ads tailored to users' interests. For instance, if Charter saw that you'd been reading lots of auto reviews, it might show you spots for new cars. The company described the plan as a benefit for users. "You will not see more ads—just ads that are more relevant to you," it said.
Charter's proposal drew an immediate outcry from customers and privacy watchdogs. In June, the company announced that it would suspend its traffic-monitoring plan. Charter's effort also sparked a wide-ranging congressional inquiry into how Internet companies are profiling users for marketing purposes. Congress has turned up an unsurprising trend: Charter is far from the only company that wants to collect and analyze your surfing habits.
Though they're all approaching it in different ways, a bunch of large Internet firms—including ISPs like Charter and AT&T and Web companies like Yahoo, Microsoft, and perhaps even Google—are crawling toward adopting "behavioral targeting" systems. Predictably, privacy advocates are pushing lawmakers to outlaw or significantly limit this sort of invasive advertising. Proponents of behavioral targeting defend the practice in much the same way Charter did—Web surfers will benefit from close monitoring of our habits because we'll soon be getting more "relevant" ads. Considering the large networks that Web companies now manage and the money they can make by selling ads tailored to your surfing habits, it seems obvious that behavioral targeting will soon rule the Internet ad market. As the targeted-ad boom approaches, we Web surfers need to prepare ourselves—and think of how we might be able to take advantage even as we have targets on our backs.
Most ads you encounter online on a daily basis are already "targeted" to you in some way. Graphical ads—like the ones you see on Yahoo, NYTimes.com, or Slate—are often served up based on guesswork about your demographic profile. The ad sales department at Slate knows the age, sex, and affluence of the magazine's readership, and it sells ads to companies that want to attract people who fit this profile. Google and other search companies, meanwhile, make billions through keyword and contextual ads, two far more precise ways to target ads. On its search engine, Google runs ads based on your search queries—type in Wii, and you'll see a paid text ad urging you to buy Nintendo's console at Amazon. On third-party sites, Google serves up ads that match text on the pages where the ads are placed. For instance, look at the copious kitchen-countertop-related spots on this Ask the Builder page about granite countertops.
But when you searched for Wii, were you looking for a new Nintendo game system, or did you want games for the Wii console you bought last week? And did you visit that page about kitchen countertops because you're thinking about remodeling your kitchen—or was it because you're looking to buy a new house? These questions get to your deeper intentions, and if Web companies could answer them—perhaps by looking at your browser history—they'd likely be able to sell ads at much higher rates. That's the idea behind behavioral targeting: By gathering and studying your actions over an extended period of time, advertisers will get a much clearer picture of what might interest you.
How might marketers get this info? For Internet service providers like Charter, the obvious method is something called "deep-packet inspection." Just about everything you do online—surfing the Web, sending and receiving e-mail, buying songs through iTunes—involves the transfer of "packets" of data between your computer and some other machine somewhere on the Internet. On their journey, all these packets must travel over Internet lines provided by your ISP. When Charter decided to start doing behavioral targeting, it contracted with a Silicon Valley startup called NebuAd, which installs an "appliance" on the ISP's network to inspect your packets.
NebuAd says that it safeguards your privacy as it collects these data—it doesn't save personally identifiable data like your name, e-mail, or street address—but its monitoring apparatus is nevertheless staggering. NebuAd knows every Web page you visit, how long you spend on those pages, every keyword you search for (on any search engine), and which ads you click on and which you don't. NebuAd allows you to opt out of its targeting system, but it won't tell you whether your ISP uses its service. Several small ISPs told Congress that they'd already tested NebuAd's system, giving only minimal, fine-print notice to their customers before doing so. (Among these was Cable One, a subsidiary of the Washington Post Co., which also owns Slate.)
In its letter to Congress (PDF), AT&T, the largest Internet provider in the country, said that it is "carefully considering" ways to implement deep-packet inspection, though it wants to "do so the right way." The company said that if it does go to DPI, it would use an opt-in system, requiring customers' affirmative sign-off before it looks at their traffic. AT&T also pointed a finger at Google and other Web companies, which told Congress that they didn't engage in DPI. That's true: Microsoft, Yahoo, AOL, and Google aren't (at least primarily) ISPs, so they can't inspect traffic going across Internet lines. But they all run massive advertising networks that combine search engines, content sites, and ad-serving companies, a combination that is certainly capable of tracking people's actions on the Web. (You can read more than 30 Web companies' responses to Congress here.)
Indeed, Microsoft, Yahoo, and AOL have acknowledged that they do save and collect some information about how people move through sites in their ad networks. Google, the Web's most-profitable advertising company, said that while it does not currently conduct behavioral targeting, it believes there are "responsible" ways of doing so. Google, of course, rivals your ISP for intimacy with your online behavior. As Danny Sullivan of Search Engine Land told me, not only does the company conduct 70 percent of all searches online, it also runs the Web's biggest advertising network—a huge swath of pages across which the company can monitor your behavior. If you use its toolbar, you can turn on Google's Web History feature, which logs every site you visit and every keyword you search for. Google does not tie these services together in order to serve ads, but its recent acquisition of the advertising giant DoubleClick and changes to its keyword search algorithm suggest that it's considering doing so.
Privacy advocates are asking Congress to make all behavioral targeting opt-in—Google, your ISP, or any other company wouldn't be able to trade on your online actions without asking for your permission first. But marketers balk at this suggestion. Surveys show that most of us would refuse to sign away our Web history to marketers in return for nothing more than better-targeted ads.
How's this for a compromise: If Web companies want to sell my personal information to advertisers, they ought to pay me for it. I don't want more-relevant ads, but I might be persuaded to sign away my Web history to my ISP in return for, say, $10 a month off my Internet bill. Google is a free service, so it can't really give me a discount. But Jeffrey Chester, director of the Center for Digital Democracy, notes that there might be other incentives for us to turn over our search history. Targeted advertising could be just the thing that some Web sites—newspapers, for instance, or social networks like Facebook—need to thrive. Under an opt-in regime, Google could let you direct your search history to specific sites in order to give them access to profitable ads.
Sure, this plan seems a bit pie in the sky, and as Chester notes, the ISPs and Web companies are preparing a huge lobbying effort to stop any legislation barring their behavioral targeting plans. But it's nice to dream, at least, about a universe in which we're in control of which sites make money off the hours we spend goofing off on YouTube.