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Local Information Management news in the media industry

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Inside the cookie monster - trading your online data for profits

Nicky Phillips
October 5, 2010

Sandwiched between a bakery and a health food supermarket in the heart of Cupertino, California, is the headquarters of a new kind of stock exchange - one that trades data, your data.

It is operated by a US company called BlueKai and at any moment on a typical day the interests and preferences of more than 200 million web users are for sale to the highest bidder.

The data is divided into categories - everything from wedding dresses and mountain bike helmets to coffee makers and luggage - with users identified by the ''unique identifier'' of their web browser, the software that finds, retrieves and presents information online. In the right hands, the data is marketing gold dust because it allows advertisers to target consumers showing a clear interest in a product or category. Someone who goes online to research internet security software, for example, might receive advertisements from a software company within hours, perhaps minutes of their first mouse click. The potency of such advertising has turned online data trading into a burgeoning industry. (There already at least seven US data exchanges similar to BlueKai.)

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Profiling children proves kids' stuff for advertisers

Nicky Phillips
October 5, 2010

Every move they make ... Daniel Suttner, 8, and his brother Guy, 10, playing online, helpless to stop various online companies from tracking their activities. Photo: Kate Geraghty

Vivien Suttner knows her two young boys will be bombarded with advertisements whenever they venture online.

''I don't like that children have become such a target of advertising, but I know it is unavoidable,'' she said.

What she finds disconcerting is the online games her children, aged eight and 10, play may be tracking their movements across the internet and sharing such information with advertisers, who build a profile of their behaviour to better target them.

Online surveillance has become a fast-growing practice with the explicit aim of surreptitiously gathering as much data on web users' behaviour and activities as possible.

Children's gaming websites are part of this data collection industry, and install large numbers of covert devices.

Of the four children's gaming websites the Herald visited, three used tracking devices, such as cookies, web beacons and flash cookies [see glossary].

A cyber law researcher, David Vaile, said advertisers and data collectors were developing extremely sophisticated tools for tracking. "With some of these technologies, unless you've got a detector or know what you're looking for, you won't know they are there," said Mr Vaile, of the University of NSW's cyberspace law and policy centre.

The tracking is almost always carried out by third party companies, not the original website. "You can discover a dozen or more different companies' tracking tools on the one page," he said.

The devices don't ask the user's permission to collect data, identify themselves or explain the data will be stored offshore. "These invisible bugs don't play nicely."

One of the most pervasive and covert tracking devices being deployed by websites are Flash cookies, which are stored on an external server.

Chris Harris, from the gaming website Ninjakiwi.com, said they used flash cookies to store information such as scores and game levels.

"It is important to [use flash cookies] with flash games so players don't have to re-do everything if they leave the site.

But flash cookies can be used by data collector as tracking devices and have the potential to reinstall deleted regular cookies.

In the US, individual web users have sued several large advertising and data collection companies for using a sophisticated tracking device called flash cookies which have the potential to re-spawn deleted cookies.

Mrs Suttner, an educational psychologist, said if companies were building profiles on children there should be some form of regulation.


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Many users are oblivious to its existence but this multimillion-dollar enterprise is founded on the covert business of spying on web surfers.

The industry's primary tools are tracking devices deployed on thousands of websites, surreptitiously gathering information about visitors. Australian users are far from immune.

A review of the top 10 most-viewed Australian-owned websites - or those with an Australian subsidiary - revealed a startling picture of this extensive, and increasingly intrusive, practice.

Ninemsn.com.au installed the most tracking devices - 109. Bigpond.com had 93 and smh.com.au 86. Google tracks users on the more than 1 million websites that display its advertisements.

The information these devices gather is considered anonymous because it identifies web browsers, not individuals. But the aggregation of data from multiple sources means companies can quickly build a detailed profile of a user - so detailed that some people outside the industry fear privacy is at risk.

Privacy laws in Australia cover only the use of personal information such as names and addresses. But because your online activity is linked only to a browser ID, it is not considered personal information and as a result the industry is almost entirely self-regulated.

Website privacy policies are often vague and unclear, leading to suggestions that web users are being manipulated by advertisers who are not open about what they are doing. There are also genuine fears that all this data could end up in the wrong hands. Tracking devices come in a variety of forms, including cookies, web beacons and flash cookies. Cookies are placed by the owner of the website and record basic information such as passwords and preferences. They have a reputation for being innocuous.

Online tracking is done almost entirely by cookies and beacons - invisible images embedded in a web page - which belong to companies other than the original website. The combination of the beacon and the cookie allows this third-party company to see automatically what elements of a page the user has clicked on, potentially identifying information held in the URL of the page the computer is visiting, such as an email address.

What happens with that data is now out of the user's hands.

Most of these third-party companies, usually advertisers and data collectors, have relationships with hundreds, sometimes thousands, of websites, making it possible for them to follow a user's progress across the web. Over time, this covert surveillance allows them to build detailed profiles of the user's interests and activities.

Ed Harrison, the commercial director of media for Fairfax Digital - which is part of Fairfax Media, the publisher of this website - said it used cookies to track users' behaviour, create a better user experience and optimise the effectiveness of advertising.

"The benefit is that we are providing more relevant advertising to consumers," he said.

The ABC website has 42 tracking devices. Carolyn MacDonald, the head of marketing at ABC Innovation, said they were used to monitor audience engagement with an external advertising campaign and to measure website traffic.

But the privacy policies of smh.com.au, news.com.au and the ABC do not mention their use of third-party cookies or beacons. Bigpond.com and ninemsn do disclose their use of third-party tracking devices and who installed them. But none of the websites declared how long data would be retained.

"Privacy policies are often intentionally really vague and you can't tell what they do," wrote a privacy researcher, Ashkan Soltani, in a recent study.

Most of the websites this website analysed said they shared information on web customers only within their network or with business partners.

But Mr Soltani said that as some companies had up to 2000 affiliates, that was hardly an exclusive group.

The websites said the information collected was anonymous because users were identified by a unique code in a cookie assigned to their computer and their data was often aggregated with information from other users. Users were also free to delete their cookies, or opt out of being tracked. "We are not tracking an individual, but a browser," Mr Harrison said.

In Australia and many other countries, data collecting is not a crime because the information is not considered personal.

But the Greens senator Scott Ludlam said Australia's privacy laws needed to be reviewed to keep up with the changing online environment.

The acting Privacy Commissioner, John McMillan, admitted data aggregation was a privacy issue but would not say the practice could be breaking the law.

The extent and sophistication of consumer profiling has sparked fears among technologists, privacy advocates and even regulators that web users' anonymity is under threat.

''If you start collecting these bits of data from all over the place you can develop quite a detailed profile of [a] person,'' said a computer engineer, Carlos Jensen, of Oregon State University.

A computer researcher, Catherine Dwyer, at Pace University in New York, said: ''The clear intent of data collection is to track consumers over time and build up digital dossiers of their interests and shopping activities.''

For more than a year, Telstra has been combining demographic information about its phone customers with data culled from their online browsing habits. When customers access their online account to pay a bill, MediaSmart - which Telstra owns - places a unique ID in a cookie on the user's computer. Telstra then builds a detailed profile that includes the user's age and gender as well as search categories used on Telstra's other websites such as the Yellow and White Pages, Where Is and Big Pond shopping and movies. The more Telstra knows about a web user, the more targeted its ads can be.

For example, if a user searches the Yellow Pages for paint, they might receive paint advertisements on the Bigpond home page the next day.

The general manager of MediaSmart, Mark Shaw, said this approach allowed ''advertisers to influence people at a critical moment in their purchasing decision-making.''

Bigpond said users could opt out of targeted advertising.

Telstra is not the only company to gather web users' online interests and behaviour. Fairfax Digital and Yahoo7 also do it.

While all these companies insist the information is not shared outside their network, there are concerns that businesses will eventually sell their data. "If there is money to be made, you'd be amazed what companies will do," said Mr Soltani.

eBay.com.au already allows information on its web browsers to be collected and auctioned on data exchanges such as BlueKai.

BlueKai said it did not allow sensitive information such as mental health, sexual orientation or religious beliefs to be auctioned on the exchange.

But the greatest fear of many watching the rapid expansion of online tracking and data collecting is whose hands the information may ultimately fall into. With the industry almost entirely self-regulated, there appear to be almost no practical legal limits on how the data can be used.

''Imagine an insurance company wanting to know what kind of risk they are assuming with this person. Here is a person who is researching a lot of medical information. That might be a red flag,'' said a cyber law researcher, David Vaile. Insurance companies could be on the phone to BlueKai right now.

WHAT WE DID

This website analysed the tracking devices installed on a Fairfax Media laptop by the top 10 most-viewed Australian-owned websites (including websites with Australian subsidiaries) as identified by analytics company Nielsen. Each site was reviewed using software programs called Tamper Data, Ghostery and Add and Edit Cookie. Each website was visited multiple times and all data was removed from the computer before the next website was assessed. This website considers tracking devices to be any cookies, beacons or flash cookies placed by companies other than the original website visited.

HOW TO STOP THE TRACKERS

Cookies are managed by the user’s web browser. You can set your web browser to not accept third-party cookies or automatically delete cookies when the browser is closed. Beacons cannot be deleted and are not stored on your computer. They run as part of the normal function of many websites. However, you can opt out of being tracked by publishers, advertisers or data collectors and exchanges by visiting the National Advertising Initiative’s opt-out page or the websites of various companies such as BlueKai and Yahoo. To remove Flash cookies, web users must visit Adobe’s website.

GLOSSARY

COOKIES: small text files loaded onto a user’s computer. Many cookies recognise a browser when it returns to the site, remembering user preferences and passwords.Tracking users across the internet is mainly done by ‘‘third-party’’ cookies, installed by companies other than the website.

BEACONS: tiny invisible graphics similar to cookies, which are also used to track the movements of users. Web beacons are embedded on web pages and users cannot remove them.

FLASH COOKIES: any website that uses Adobe Flash videos may use these cookies. Some websites allow third-party Flash cookies. Can be deleted by visiting the Adobe website.

Leading Companies:

ninemsn, bigpond (telstra), SMH (Fairfax), News (NewsCorp), eBay, yahoo!7, ABC, Commonwealth Bank (Commbank), Google, BOM

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From the same article:

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Sydney Morning Herald

MON 27 SEP 2010, Page B04

Measure for online adverts comes into focus

By: Julian Lee

THE $2 billion online media market moves a step closer to a standardised measure of internet traffic today as it seeks to give certainty to advertisers starved of uniform data.
A single way to measure internet usage is expected to be in place in the second half of next year, said the Interactive Advertising Bureau, which today is calling for expressions of interest from research companies.

The industry body said the winning bid for the three-year contract would be announced in the first half of next year.
Although the contract will not include internet browsing on mobile phones or the measurement of shows streamed from the web and viewed on TVs, it is expected to finally supply robust ratings, readership and audience data on which advertisers can base media-buying decisions.

At present up to 40 companies, including Nielsen, ComScore, Experian Hitwise, Omniture and Google Analytics, measure internet traffic. The measurement of browsers, rather than the people using them, has led to widespread duplication: at last count there were 110 million browsers in Australia, an anomaly explained by the fact that work and home computers, as well as laptops, are surveyed.

The bureau's chief executive, Paul Fisher, has appointed a working party led by a veteran researcher, Ian Muir, to oversee the process from the initial registration of interest, which closes on October 8, to the closing of submissions on December 17. He expects at least 10 companies will bid for the contract, which, along with the costs of running the system, had yet to be determined. Names mentioned include Nielsen, ComScore, TNS, GfK, Roy Morgan and Ipsos.

As marketers come under increasing pressure from their finance departments to justify their activity, measurement has become a hot issue in the $12.5 billion advertising market.

The outdoor advertising industry took three years to develop its measurement system and started releasing data in February. Last week the newspaper industry announced that data for a new readership survey to rival Roy Morgan's would be available in late 2011. The Readership Works, a company set up to fund and run the new system, has appointed Ipsos MediaCT.

But the online ad industry is regarded as a laggard in measurement. The bureau has been working with Nielsen for more than two years to develop "hybrid" data, which merges data from panel and internet servers, but to date none has been forthcoming. The delay has angered media buyers.

Mr Fisher said experience in Britain, Germany and Denmark had shown that advertisers spend more money on the medium once a standard measurement system is in place.

"I don't know what the uplift will be here, only that we can expect one," he said.