If you use Yahoo’s Web search engine to learn about hybrid cars, the site will quietly note that you fit into a group of users it calls “Consciously Cruising.”
If you click on ads for moving van companies, you will join the “Home Hopping” group. Shop for wedding cakes and reception halls and you might be tagged as a future bride or groom.
Earlier this year, Yahoo introduced a computer system that uses complex models to analyze records of what each of its 500 million users do on its site: what they search for, what pages they read, what ads they click on. It then tries to show them advertisements that speak directly to their interests and the events in their lives.
Yahoo and the many other companies building similar systems say the systems are benign because they typically do not collect personal information like names and addresses.
“We are much more conservative than we need to be” in using information about site visitors, said Usama Fayyad, chief data officer at Yahoo.
Still, just how personal even “anonymous” information can be was shown vividly last week as a list of three months of search queries from 657,000 AOL customers began circulating online. Collectively, a person’s Web searches, it turns out, can create an eerily intimate portrait — one that some privacy advocates say should never be assembled and stored in the first place.
Still, Web companies continue refining their techniques. Advertising on search engines is already a $14-billion-a-year business because the ads can be so closely tied to what people are looking for. Yahoo’s system is meant to use search queries and other actions to select ads people see while checking their e-mail and reading other pages.
AOL is working on a similar system to display ads for products related to a person’s Web search history. MSN from Microsoft just introduced technology to do the same. Other companies use systems that bring together information about users from across many sites. Internet companies call this behavioral targeting, and it is based on the insight that knowing what people do online can be more valuable to a marketer than knowing how old they are or what they do for a living.
“Search behavior is the closest thing we have to a window onto people’s intent,” said Jeff Marshall, a senior vice president of Starcom IP, an advertising agency. “When people are gathering information to make a choice, that means they are often going to spend money.”
Many Internet users have no idea that records of their actions are being collected and used. They might find out about these practices only if they read the fine print of Web site privacy policies.
But AOL’s release of search data has already led some privacy advocates and legislators to call for new limits on how Web sites and advertisers keep and use information about online behavior.
AOL has apologized for the release, saying that its research unit had not been authorized to publish the records. It removed the data from its site, but copies are still available online.
Not all of the behavioral marketing involves search engines. Technology from companies like DoubleClick and AOL’s Advertising.com unit allows marketing messages to follow people around the Web.
Starwood Hotels, for example, alerts members of its frequent-guest program to new promotions by placing ads that will be shown only to people who have previously visited its Web site. These ads can find customers in unlikely places, like the vast social networking site MySpace.
While most MySpace users are more likely to spend money on soda and sneakers, some of the site’s 100 million members do stay in Starwood’s Westin or Sheraton hotels and will see the ads.
Cingular Wireless uses a similar approach to advertise to people who have started shopping for a phone.
“You are no longer targeting people you think will be interested in your product,” said Les Kruger, a senior marketing manager at Cingular. “We know based on your behavior that you are in the market, and we can target you as you bounce around the Internet.”
In the late 1990’s, an outcry about an earlier wave of marketing schemes led to some restrictions on how data is shared among sites and to rules that allow users to specify that they do not want to have some data collected about themselves. These options are rarely used.
Yahoo and most of the major Internet companies do not sell profile information to others, as magazine publishers and credit card companies often do. They want to profit directly from the information they gather.
But Web publishers do sometimes trade information among themselves — often simply what sites a particular computer has visited. For example, Seevast, an Internet advertising company, pays Web sites to place its cookies on the computers of users that visit them. That way, Seevast will know more about those users when it chooses which advertisements to display on sites in its network.
Mr. Fayyad of Yahoo said Internet companies were walking a fine line.
“If you get bombarded by ads for minivans on Yahoo, even if you are interested in minivans, it becomes creepy,” he said. “If you want to do this responsibly, you have to restrain yourself.”
For example, he said, Yahoo’s new system is based on monitoring for 300 types of behavior — some as detailed as having shopped for flowers in the last two days — but it does not keep records on more sensitive topics, like specific medical conditions.
Still, Mr. Fayyad argues that some level of targeting is necessary for Internet companies to avoid the fate of television networks.
“Every time I serve the wrong ad to the wrong person, I am training that person to tune out,” he said.
More immediately, Yahoo and many other sites see this sort of targeting as a way to increase advertising rates for material that otherwise would have little appeal to advertisers.
“We sell people, not pages,” said David Morgan, the chairman of Tacoda Systems, which sells technology for behavioral targeting to publishers including The New York Times Company. “The L.A. Times can target car buyers when they are surfing the local news.”
At first, Tacoda offered a service to allow companies to track behavior on their own sites. Now it runs a network across 3,500 sites, so Weather.com, for example, can show lucrative auto ads to its users who recently visited Car.com.
These systems can turn up some surprising results. Alamo Rent a Car, for example, found strong responses to its advertisements among people who had recently read obituaries on newspaper sites. That may have been because they were more likely to be taking a last-minute trip to a funeral, Mr. Morgan said.
Google, which runs both the largest search engine and largest advertising network, picks its targets more narrowly. When Google sells advertisements that appear on other Web sites, it selects the ad by analyzing the subject matter of the page the ads appear on. Those sites can send Google additional hints for use in ad targeting, like ZIP codes.
Google outbid its rivals last week when the News Corporation accepted its offer of $900 million for the right to sell advertising on MySpace and other sites; it helped that Google has sophisticated technology that can make inferences about what ads are best for a particular page.
“We have considered every potential targeting option, and we come back every time to the idea that the trust of the user is paramount,” said Tim Armstrong, Google’s vice president for advertising. After the initial outcry over Google’s Gmail service, which displays ads based on the content of individual e-mail messages, the company has been wary of taking actions that would raise privacy concerns.
Mr. Armstrong also challenged the idea that it was effective to show people advertisements based on what they searched for hours or days earlier: “Does a user want to see an ad on cars when they are planning their weekend vacation, or do they want to see an ad related to what they are looking at?”
Indeed, some argue that behavioral targeting may be more trouble than it is worth. Web publishers worry that it will lead clients to buy fewer ads. And advertisers question whether the higher prices the Web sites charge are worth it.
One believer is Panasonic, which has found that users do respond to such advertisements. It ran a series of ads for plasma televisions on entertainment and electronics Web sites. Then it used technology from Tacoda to show ads to people who had once visited those sites while they surfed elsewhere. The response to the ads increased when they were on a site unrelated to televisions.
“The ad is less expected and is playing to your subconscious,” said Lydia Snape, the director of online marketing at Renegade Marketing, Panasonic’s Internet advertising agency.
LendingTree, an online loan broker, has experimented with aiming ads at some of the 300 categories of users in Yahoo’s new system, like newlyweds and people who have just moved. It had by far the best results advertising to people who had searched for and read information about borrowing money.
“People aren’t in the market for loans all the time,” said Darren Beck, LendingTree’s vice president for online advertising. “These behavioral targeting models seem like the holy grail. We can find people exactly when they want a loan.”
Author: Saul Hansell