What Do Online Advertisers Know About You?

by Tim Jones AUGUST 4TH, 2010

In a groundbreaking new series titled "What They Know," the Wall Street Journal is taking a close look at the information that online advertisers collect about you as you browse the Web:

"The tracking files represent the leading edge of a lightly regulated, emerging industry of data-gatherers who are in effect establishing a new business model for the Internet: one based on intensive surveillance of people to sell data about, and predictions of, their interests and activities, in real time."

What the industry knows about you may surprise you. The articles examine the world of tracking cookies, and other less well-known tracking technologies like flash cookies and beacons. Theyfound that "the nation's 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning."

Using information gathered this way, the advertising industry is able to accurately guess substantial information about you — often including your gender, age, income, marital status, credit-rating, and whether you have children or own a home. The findings are used not only to determine what advertisements you see, but sometimes to decide what kind of discounts or credit card offers you're allowed access to.

The series also reveals the stunning story of how a 2008 power struggle at Microsoft Corp.undermined Web privacy standards. When the product design team behind Microsoft Internet Explorer 8.0 proposed adding stronger privacy safeguards, Microsoft's advertising department objected. The software features would have granted Web users substantially better privacy and protection from tracking than exists today. But Microsoft, seeking to maintain alliances with the online advertising industry, ultimately rejected the features. The story shows that the advertising industry has considerably more influence over web-browser design than one might expect.

The advertising executives interviewed in the series emphasize that the information collected is anonymous — in theory. But the series' fourth article — titled "On the Web's Cutting Edge, Anonymity in Name Only" — describes how de-anonymization techniques can be used to extrapolate actual identities from the information gathered.

The "What They Know" project is already the largest and highest-profile investigation by the mainstream media into consumer Web privacy to date. No doubt more articles are on the way, and the project's Twitter account is providing many smaller updates. It's already affecting the conversation in Washington DC, where important efforts by both Congress and the FTC are underway to rein in this dangerous and unregulated industry.

So, kudos to the team at the Wall Street Journal. Hopefully their efforts will encourage more serious approaches to privacy from regulators, law-makers, software companies, advertising companies and ordinary consumers.