Targeted Advertising and Privacy
The essence of targeted advertising lies in the Internet's interactivity
via two-way communication. For example, when a web user types the keywords
"French wine," the response page displays not only the search results but also advertising messages by wine sellers. Although advertisers may send mass mails based on consumer profiles obtained through third-party information sellers, web advertising allows a more integrated, real-time targeting, which is then linked to market research, production, and sales efforts. Interaction between advertisers and buyers brings up a highly sensitive issue in Internet advertising, for example, the use of consumer information. Electronic transactions leave a trail of information, which can be used to generate powerful personal profiles for prospective consumers. Yahoo!, for example, openly admits that the company is not in the business of selling a search service but of selling consumer information collected by the web server that monitors and records a wide range of information about its visitors. Consumer surveys and market research has always been an intrinsic part of a successful advertising campaign. Now, extensive data on consumers are being gathered from various sources, like telephone records, credit card usage, and web browsing. Computers can easily cross-reference this data to generate databases for specific advertising purposes. This cross-referenced information about users is sometimes called meta information—meta information originally meant the information about information—and has become the most valuable information generated by the Internet. As it becomes more common, advertising and marketing based on consumer meta information collected via the net will become a contentious issue.
The economic implications of the use and misuse of this consumer information cannot be ignored. First, sellers are able to offer customized products instead of one of average tastes. Also, in many cases, consumers are willing to reveal their preferences to get better quality in the way of customized products.