Online privacy - targeted web ads under spotlightOFT says internet ads must be more transparent

26 May 2010

Online privacy

Hot on the heels of a Which? investigation into the use of internet cookies, industry watchdog the Office of Fair Trading (OFT) has revealed its current views on behavioural advertising.

The OFT has found that although industry self-regulation addresses some key consumer concerns about behavioural advertising, more could be done to provide consumers with better information about how personal information is collected and used. 

It wants the advertising industry to address key concerns, which centre around privacy issues and the possibility for the misuse of personal data. 

Targeted online ads usually use small internet 'cookie' files which are placed on your computer when you visit a website. This lets the company which owns the cookie recognise your PC and respond accordingly, for example by displaying an ad that it believes will be of more interest to you based on your previous browsing history.

In a Which? survey of 1,468 internet users in February 2010, less than half of those who had heard of internet cookies claimed a good understanding of what they are used for. And a fifth of all respondents thought that cookies were just for eating. 

Find out how to manage cookies and your browser history records in the Which? guide to protecting your online ID.

Pros and cons of targeted advertising

Online behavioural advertising (OBA) is more profitable for advertisers than non-targeted advertising, with revenue between £64m and £95m according to the OFT. The Internet Advertising Bureau (IAB) has told Which? that the use of OBA is vital if web publishers are to make quality online content available at little or no cost. 

The IAB also says that the data collected, such as a log of websites visited, doesn't personally identify internet users - and it has developed to inform web users of how cookies work and how to opt out of much OBA. 

Privacy concerns

However, as well as confusion over how cookies are used, Which? has found that half of web users surveyed feel OBA cookies invade their privacy. Biggest concerns revolve around:

  • Lack of understanding about who holds the information and if it is passed to third parties
  • How the information is used
  • How long it is kept for

But 64% of survey respondents would rather receive ads of relevance if they must receive ads at all, and only 28% would rather pay for online content if it means they won't see online behavioural advertising.

Which? findings suggest that good education about the use of cookies and online advertising, alongside appropriate protection and active enforcement of rules, would go a long way to make internet users more comfortable with OBA.

Cookie information and opt out is vital

Websites that use cookies are legally required to inform web users about the purposes of storing cookies on their computers and to give people the opportunity to opt out. 

The OFT plans to encourage the IAB, the trade association for online advertising, to work closely with industry to provide clear notices alongside behavioural ads and clear information on opting out.

Which? believes that while cookies are not bad in and of themselves, there's a lot of mistrust and misunderstanding about how they are used. 

Which? is calling on websites and advertisers to ensure that consumers are told in plain English and in an accessible format how cookies are used and how to opt out, and to clearly identify OBA ads - for example by placing 'information' icons directly on the ads.

For more advice on staying safe online, take a look at the Which? buyers guide to online security.

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