Expedia has jumped feet first into the world of online behavioral advertising (OBA). OBA involves the tracking of a consumer’s online activities to deliver targeted advertising in line with the consumer’s interests. With the dramatic downturn in travel sales during the current recession, Expedia, like other travel companies has searched for additional revenue beyond direct travel sales.
Expedia is selling their customer’s buying habits directly to advertisers, gathered through their Internet cookies. The advertisers in turn, via the purchased cookie data can send highly targeted ads to online consumers as they visit Web sites across the Internet.
It should be understood that according to Expedia, no personally identifiable information (PII) is sold to advertisers through the program, dubbed PassportAd. They strip out names, addresses, credit card numbers, and other PII.
According to Omar Tawakoi, CEO of BlueKai, the company handling Expedia’s PassportAd program, other top travel sites, including at least one major travel search engine, are also selling consumer data, stripped of PII, to travel and nontravel advertisers without public disclosure. If behavioral marketing is as benign as advertised, I’d like to know why they’re keeping their programs secret.
There really is nothing sinister about cookies per se, but they do contain data you generally might want to keep private. Cookies are small files containing a string of text stored on a user’s computer by Web browsers. A cookie can contain bits of information such as a user’s name, address, preferences, shopping cart contents, credit card and other data used by websites. Cookies can be temporary (when you leave the website they are deleted) or persistent (the cookie and its data are only deleted after a specific time period, or never deleted).
Art Sackler, Executive Director of the Interactive Travel Services Association, commented in 2008 about the FTC’s proposed guidelines, saying, “in behavioral advertising generally, no personally identifiable information is collected or used in any way. When there is no PII involved, we fail to see the harm for individual consumers.” He went on to say that OBA “offers genuine benefits to consumers without impinging their privacy.”
How does behavioral advertising benefit consumers? According to the Association of National Advertisers (ANA),
Behavioral advertising makes it possible for consumers to see the right ad at the right time about the right product, rather than simply a series of ads that may be irrelevant to them. It also provides marketers with a more efficient and effective means of reaching consumers who are most likely interested in their offerings. This efficiency supports competition and innovation and substantially strengthens the U.S. economy.
In addition, ANA points out the critical role that advertising plays as a major funding source and financial foundation for many services that consumers enjoy on the Internet. I don’t think there is any doubt, that at this time, advertising is critical to many worthwhile online sites and services. Here at Tripso, for example, advertising is vital to keeping us alive and serving our readers.
Dan Jaffe, Executive Vice President of ANA stated, “The privacy interests of consumers can be best protected by strong industry self-regulation and positive industry leadership.”
Two questions come to mind about OBA. What can consumers do to protect their privacy? Does behavioral advertising need regulation, and if so, how much?
You can disable cookies, but that would mean that many e-commerce sites, sites through which you do online business, won’t work. You can also delete cookies once you’ve completed your business. I advise Internet users to only visit reputable e-commerce sites, and click on advertisements only for reliable and legitimate websites. I also advise deleting all cookies on a regular basis.
Mindy Bockstein, executive director of the New York State Consumer Protection Board, has stated that mere consumer disclosures are insufficient. She said,
Consumers need to be apprised of what behavioral targeting seeks to accomplish and the fact that, if they choose to consent to being targeted, profiles will be created with their tracked personal information.
Ms. Bockstein understands that advertisers can take the information purchased from Expedia and other companies, and couple that with the personally identifiable information they can gather when consumers use their websites and click on their advertisements. Expedia does allow their customers to “opt-out.”
Dan Jaffe, showed his concern about the FTC and the statement of Ms. Bockstein, when he said,
We have serious reservations about some of the proposed principles suggested by the FTC, particularly the notion that consumers should be given the ability to opt-out of anonymous tracking and the collection of non-identifiable information across multiple websites.
I would ask Mr. Jaffe, what is ANA afraid of? If behavioral advertising is so valuable to the consumer, why are you afraid they’ll opt out?
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I’m not sure what to think about this. When I first saw the article, I was upset. But upon further thought, it might not be such a horrible idea.
We are going to be shown ads anyways. Right now, they look at where you are surfing from – which is why I can be on a european website and get a Canadian telephone company ad.
There are issues – what if I am checking airfares for someone else, and I have no interest in the place – but end up getting ads for it…
We often look at things from the consumer perspective. Advertisers probably want to spend their dollars the most effective way possible.
Bill, thanks for your comment and your readership.
The idea of customizing advertisements sent to you on the web is not the upsetting part to me, nor is the potential sale of my buying habits. The problem is the way it’s done.
Expedia is doing it one way, while much of the industry is doing it another, and industry spokesman Dan Jaffe sees nothing wrong with what the industry is doing.
Expedia has publicly announced their program to sell this data to advertisers. Not only that, Expedia is allowing their customers to “opt-out” of the program.
On the other hand, we have other travel websites and at least one travel search engine which is secretly selling data on your buying habits and not giving you the opportunity to “opt-out.”
There are privacy issues as pointed out as pointed out by the New York State Consumer Protection Board, and others. Mr. Jaffe and the ANA speaking for the industry think these adds definitely benefit the Internet public, and that their methods are benign. They think its enough for the industry to police itself and they don’t want to permit you to “opt out” of their advertising program. That sends big red flags up my flag pole. (We saw what happened when the banking industry was policing itself with little intervention from government watchdogs.)
I think my basic question to Mr. Jaffe speaking to the industry still stands. If behavioral advertising is so valuable to the consumer, why are you afraid they’ll opt out?
I am beginning to wonder if anything is sacred on the Internet. As I do a lot of surfing on travel sites, I am amazed to see “third parties” marketing to me. Plus – has Overstock.com managed to infiltrate practically all websites? The last items I looked at there pop up on my computer screen at the most unlikely times and places.
Ah the joys of adblock!
Ned,
Thank you for your response. I can see more what your point is, and as I understand it, you are saying that the rest of the industry should allow opt out as well.
Correct me if I’m wrong, but it looks like the provider of advertising via the expedia route is allowing you to opt out, so you are not saddled with opting out if each of their customers’ websites, which is good.
Infortunately, we have to either have ads or pay money. At the moment, I’m willing to put up with the ads. I don’t click them often because I only click them when they interest me.
Orbitz were the nasty ones who used popup ads when everyone hated them – and to this day, I have not used their site.
I’ve used expedia a few times and I’ve never had a problem with anything they’ve sold me. I needed some clarification on one occasion, which they helped with. I don’t have any quibbles with them. Mostly, I use hotel and airline sites directly though. I do almost all of my travel bookings online. Sometimes I make a mistake – and then either I can get it fixed or I have to pay for it. Both have happened.
However, they are going to have a hard time monitoring my travel habits.
Thank you for all of your well written articles.
Karen – I don’t know if you have very targeted ads or if their is adware on your machine. You might want to scan your machine.
If the personal info is stripped from the cookie, selling the info is likely in accordance with the site’s privacy policies.
I think there are many more sites in many more industries doing this as Karen alluded.
Collecting and using the information is one thing, but most users are unaware of the methods and data that are collected. Control of one’s computer is in part lost as most users are unaware that the tracking information is stored on one’s computer in several different folders that are hidden from normal view. The only way to see or manage the data is to view the hidden folders and then you need to know the location. I wrote a program to do that for you and it is called qusum, website is the same as the program name. I simply got frustrated clearing out all this junk.
Advertisers should be more up front, if they have nothing to hide they should not “hide” their cookies and objects on my machine. Put them where I can see and manage them.