According to CDD Executive Director Jeff Chester, cookies — computer files that online marketers employ to target ads to consumers — have become a tool for abuse and invasive data collection.
"Most consumers have no idea of the extensive system of online data collection and targeted marketing that has evolved," Chester said. "They need to know that data is being collected about their viewing, that data is being sent back to a computer based on their tastes. There needs to be an opt-in."
To make their case, the CDD joined with the U.S. Public Interest Research Group in filing a complaint with the FTC on Nov. 1 asking the agency to require advertisers to notify consumers when tracking cookies are present on their websites.
According to a Business Week article, most online marketing firms employ an opt-out option, allowing consumers to reject cookies. But, Catherine Holahan, the article’s author, said few consumers actually opt-out.
With few consumers unwilling, unable or unlikely to opt-out of targeted marketing schemes, the targeted advertising industry has mushroomed.
Market research firm eMarketer estimates that $1.2 billion of the $15.9 billion spent on online advertising goes to cookies and other targeted consumer-tracking tools.
That number is expected to reach $2.1 billion by 2008.
"From the marketers' point of view, finding ways to make advertising more relevant is a real benefit because at best the consumer finds it useful and, at the least, the consumer will be less bothered by it," eMarketer analyst David Hallerman said.
While Hallerman concedes the use of cookies could be more transparent, privacy advocates such as Chester point to fears that sensitive personal information could be made available to the government or the general public, if the FTC does not take action.
