Page last updated at 13:07 GMT, Wednesday, 11 March 2009

Google serves up behavioural ads

Two people in deckchairs on the beach
If users like holidays they will get ads about holidays

Google has entered the sometimes controversial arena of behaviour-based advertising.

It has launched a system that will serve up ads to web users based on their previous online activities.

The search giant is offering users the chance to see and edit their profiles and it will also offer them the choice to opt out of the service.

But privacy campaigners are outraged by the move, with Privacy International calling for a parliamentary enquiry.

Keen travellers

The trial service launches on YouTube and Google from 11 March but advertisers will not be able to display advertisements until April.

Initially a handful of advertisers will be invited to take part.

The system uses a cookie - a small piece of text that lives inside a web browser - to track users as they visit different websites that show ads through its AdSense program.

Users will be assigned to categories based on the content of the pages they visit.

"If a user is a keen traveller and visits lots of travel sites, Google could show them more travel-related ads," the search giant said in a statement.

"We believe that ads are a valuable source of information that can connect people to products, services and ideas that interest them. By making ads more relevant and improving the connection between advertisers and our users, we can create more value," it said.

But Simon Davies, head of Privacy International, has his doubts.

"Google might well hype their targeting system as a boon to pet owners, but the reality is that the service will track just about everything you do and everything you're interested in, no matter how personal or sensitive.

Google refuted this claim.

"Google will not associate sensitive interest categories with your cookie - such as those based on race, religion, sexual orientation, health, or sensitive financial categories - and will not use these categories when showing you interest-based ads," said a Google spokesman.

Mr Davies thinks it needs to do more.

"Yet again Google has developed and launched a major initiative without any consultation with its users. And yet again Google will walk into a privacy minefield," he said.

He called for a parliamentary inquiry about the search giant's dominance in the market.

Stephen Carter, minister for communications and technology, faced questions about whether Google was becoming too powerful during a parliamentary select committee meeting this week.

In reply, he said: "We shouldn't criticise a company for being successful. It is a young business which has launched a series of applications that are highly attractive to user and both advertisers and users have flocked to its platform."

Opt out

Eye on computer screens, SPL
There is a big shift towards behavioural-based advertising

Some privacy campaigners believe Google should have offered its advertising service on an opt-in rather than an opt-out basis.

"The cookie doesn't show up any personally identifiable information so that is why we think opt-out is the right way to go," said a Google spokesman.

Information on YouTube , such as the videos people have been watching, will "be factored into" the system, said the spokesman.

The plans have received a thumbs-up from the UK's Information Commissioner's Office.

"We recently met with Google to discuss their interest-based advertising product. Transparency and choice are important elements when addressing any consumer concerns about privacy and the monitoring of browser activity," it said in a statement.

"In light of this, we are pleased that the preference manager feature allows users a high level of control over how their information is used and that the method by which users can choose to opt out is saved permanently."

Jupiter analyst Rebecca Jennings thinks the move was inevitable following Google's acquisition of advertising technology company DoubleClick last year.

She thinks consumers could welcome the new system.

"Generally we find consumers are far less concerned about this than people think they should be. Often they want to see well targeted rather than random adverts," she said.

The online advertising industry is keen to push behavioural ads and, at the beginning of March, the UK-based Internet Advertising Bureau (IAB) published a code of practice that Google signed up to.

For privacy campaigners the code did not go far enough because it did not recommend that users be allowed to opt in to such services rather than opt out.

According to Forrester Research, 26% of European online advertisers used behaviour-based advertising during 2008.

The IAB estimates that it could generate an income of £200m in the UK annually.

UK internet service provider BT is about to launch its own form of behaviour-based advertising, based on a system designed by US firm Phorm.

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