• Activist Claims Ad Industry Secretly Tracks Consumers
  • February 1, 2007 | Authors: Jeffrey S. Edelstein; Linda A. Goldstein
  • Law Firm: Manatt, Phelps & Phillips, LLP - New York Office
  • Jeff Chester, a well-known Washington activist, has published a new book in which he claims the advertising industry has turned the Internet into a personal information collection system, secretly tracking consumers and fostering “no holds barred” philosophies that trample on consumers’ rights.

    “It’s an ad, ad, ad world,” declares the executive director of the Center on Digital Democracy, in Digital Destiny, updating a theme in Vance Packard’s 1957 The Hidden Persuaders. Chester says consumers aren’t aware of just how much the Internet is being turned into a vehicle to gather marketing information.

    Chester and his wife, Kathryn Montgomery, play a major role in Washington debates over privacy. Montgomery’s research on children’s privacy issues and Web site activities in the 1990s led to a Federal Trade Commission hearing and passage of the Children’s Online Privacy Protection Act, which limits the data that can be collected from kids. Montgomery has her own forthcoming book.

    In October, Chester asked the FTC to launch a probe of online privacy issues. He said the book and the FTC complaint are the start of a campaign “to build a general-public debate that the advertising industry is going too far.”

    The book makes his case in characteristically dramatic fashion. “The ad and marketing industries have been engaged in a largely behind-the-scenes role ensuring that the federal government doesn’t protect our online privacy,” Chester writes. “We all should be alarmed about how interactive advertising is shaping the kind of programming and content available to us in the future.”

    “Advertisers often characterize the industry as being at a disadvantage now that users can effortlessly fast-forward through commercials or create their own ad-free media. But such assertions are disingenuous. An advertising industry ‘arms race’ is under way to make digital marketing more effective and pervasive,” the book asserts.

    While advertisers and their Web sites say they don’t collect “personally identifiable information” without consent, their merging of online and offline information has come pretty close, Chester maintains, warning especially of personally tailored TV commercials. “No matter what they claim, the cable and satellite industries are striving to perfect their ability to target individuals,” he writes.

    “The industry says it respects privacy, and besides all the information it plans to collect may not be personally identifiable, but the industry is being duplicitous and self-serving. While it is simultaneously claiming that all this information about viewers is anonymous—meaning your actual name isn’t linked to the data—[the industry] is telling advertisers and investors that it can deliver a precisely targeted commercial to an individual or a home.”

    Sheryl Draizen, senior vice president-general manager of the Interactive Advertising Bureau, accused Mr. Chester of misrepresenting the role of the consumer. “There is no doubt that the consumer is in control. It is insulting to suggest they don’t have [control],” she said, adding that most marketers post their privacy policies.

    “Consumers are fully aware of what data [are] collected and shared. ... Consumers understand that an immense amount of information they can get on the Internet is free because it’s ... an ad supported model.” At the end of the day, she said, it’s up to consumers to decide what information they share with marketers.

    Dick O’Brien, executive vice president of the American Association of Advertising Agencies, said that like Mr. Packard’s charges nearly 50 years ago, the issue is overblown.

    “This book is a textbook for the gullible. It’s ‘The Hidden Persuaders’ for the Internet age. Its charge that advertising manipulates online data to achieve mind control of a helpless population is the 21st-century version of using subliminal messages to make us want popcorn at the movies,” Mr. O’Brien said. “It’s as silly now as it was then.”

    Significance: As far-fetched as Chester’s proclamations may seem, it would be folly to dismiss his book as the rantings of a lunatic. As a longtime privacy advocate and Washington insider, Chester plays a significant role in Washington debates over privacy matters.