New York — Responding to a Congressional scrutiny about targeted advertising, Yahoo Inc., offering a concession to those supporting greater online privacy, last week said it would allow its Web visitors to turn off the customization of advertising on the pages of Yahoo.com. The “opt-out” option should be available at the end of August, through Yahoo’s privacy center, the company said.
“This alternative harmonizes the company’s current opt-out option for customized ads served by Yahoo on third-party networks.”
The news reaches just a day later as Google announcing the addition of DoubleClick ad tracking across its sites with an “opt-out” option of receiving targeted advertising capability for users on its networks and across the internet at large.
The House Committee on Energy and Commerce, on August 1, asked 33 organizations to respond to a series of questions concerning their privacy policies related to customized advertising practices. The letter, in addition to asking the companies to respond to 10 questions about their targeted ad policies, it also asked: “If your company did not specifically or directly notify affected consumers of the opportunity to opt out, please explain why this was not done.”
The companies were asked to reply by Friday. While Yahoo released its answers, companies sometimes request such congressional committees to keep their answers private.
In its reply to that question, Yahoo said, “Yahoo has a long history of providing clear notice to our users via our Privacy Policy and is always exploring additional avenues for enhanced notice.”
Ad customization is occasionally regarded as using the more predatory-sounding term “behavioral targeting.” It is a technique to serve ads that correspond to consumers’ interests, based on inferences drawn from data derived from consumers’ declared personal information and/or from observed actions.
In the subsequent press release, Anne Toth, Yahoo head of privacy and vice president for policy, elaborated on the benefits its customized ads said, “Yahoo strongly believes that consumers want choice when customizing their online experience and they have also demonstrated a strong preference for advertising that is more personally relevant to them.”
Yahoo’s letter further reasoned that targeted ads not only enhance users’ experience with more relevant ads, but also support “a diversity of voices on the Internet.”
“Bloggers or families who want to occasionally post content are generally subsidized by the advertising business model through free or reduced-cost hosting, and also through the ability to have text, graphical and even video ads appear on the site,” the letter says. “This ability to make money while sharing views increases the number of viewpoints that can be taken in public debates, and surely enriches our public conversation as a nation and as a global society.”
“However, we realize that there are a few users who prefer not to receive customized advertising and this opt-out will offer them even greater choice,” said Toth.
By the end of August, users will be able to visit Yahoo’s privacy center and select to opt out of customized advertising, Yahoo said. Yahoo’s privacy center is linked from almost every page of the company’s Web sites, it said.
Yahoo spokeswoman Kelley Benander said the modification has been in the works for quite sometime, but the company decided to announce it early in response to an inquiry from the House Energy and Commerce Committee, whose subcommittee on the Internet held a hearing last month questioning online advertising practices.
Visitors who decline would still see ads, but not ones delivered through “behavioral targeting” — in which a site displays ads for golf carts, for instance, to visitors who frequent golf sites, even when they are reading about Paris Hilton. Instead, they would see a generic ad.
The policy change does not affect Yahoo’s other targeted ads, such as those tied to search terms or location, nor does it prevents the collection and retention of data that had been used to generate targeting profiles. Yahoo said it still needs the information for other reasons, including fraud detection and law-enforcement requests.
Jeff Chester, executive director of the Center for Digital Democracy, called Yahoo’s explanation of the benefits of targeted ads “hypocritical and self-serving.”
“No one is saying that there cannot be targeted marketing,” he said, “but individual users should have the right to decide what information can be collected and how it can be used for online targeting.”
Chester continued, said Yahoo’s new opt-out option was probably in response not only to the letter from Congress but also to the Justice Department’s review of Yahoo’s advertising deal with Google.
In addition to receiving pressure from privacy groups, Yahoo is not the only company acting nicely in the wake of congressional scrutiny. Google is following the same path as Yahoo with a similar opt-out policy, though they have not yet made it public.
Google last week said that as a result of its ongoing integration of DoubleClick’s ad technology with its AdSense network, which places additional cookies in user’s browser that visits any site in its vast network, Google users can now opt out of DoubleClick ad serving and the Google content network using a single cookie. It also introduced an advertising-specific privacy policy to reflect changes following its DoubleClick integration.
Why the move so quickly? Both companies fear a likely regulation that would require each company to force users to “opt-in” to targeted advertising, which could be detrimental to the ad-businesses of each company.
Google, AOL and Microsoft did not immediately respond to queries about their responses to the congressional inquiry. Other companies that also received the request include AT&T, Time Warner Cable, Qwest, EarthLink, Level 3, Verizon, XO Communications and Covad.
Google just last month added a link on its home page to its privacy policy.