Targeted Internet advertising hits the bullseye, but misses privacy

The Senate Committee on Commerce, Science, and Transportation held a hearing on the privacy implications of Internet advertising. Advertising targeted to consumers’ interests was most discussed. Lydia Parnes, the Director of the Bureau of Consumer Protection at the Federal Trade Commission said that the implications of online advertising are very complex, but the Commission is hopeful that the industry can self-regulate, meaning federal intervention may not be necessary.

By contrast, Leslie Harris, the President and Chief Executive Officer at the Center for Democracy and Technology said that self-regulation does not work. Clyde Wayne Crews, Jr., the Vice President for Policy and Director of Technology Studies at the Competitive Enterprise Institute said that although there is a market for anonymity, the Internet is not the network for privacy. He said that because of targeted advertising, ads are now relevant. Mike Hintze, the Associate General for Counsel, Legal, and Corporate Affairs at Microsoft Corporation, said that $21 billion were spent last year on online advertising because it is interactive, targeted, relevant, and beneficial to advertisers because the targeted groups are more likely to buy the product.

Chris Kelly, the Chief Privacy Officer at Facebook Incorporated said that all of their users have very easy access to privacy settings to make sure they control what information they share and who they share it with. He said that targeted advertising benefits users, but personal information is not given. Robert R. Dykes, Chairman and Chief Executive Officer of NebuAd Incorporated said that in his business, Internet users can opt out of the ads, but their personal information still streams through their system. They have no identifiable information like names or IP addresses.