What is the mechanism of behavioral targeting advertising that displays advertisements for 'products that you are interested in but have never searched for' and what are the regulations by the EU?
Many people have experienced that when they are interested in a particular product or service, an ad related to their interest is displayed in an app or browser. Advertisements that target users like this are called 'behavioral targeting ads,' and in recent years there has been a growing movement to regulate behavioral targeting ads, mainly in the EU. Viggy Balagopalakrishnan, group product manager at
The EU's war on behavioral advertising
https://thisisunpacked.substack.com/p/the-eu-war-on-behavioral-advertising
◆What is behavioral targeting advertising?
There are various types of advertisements on the Internet, but among them, ``contextual advertisements'' and ``behavioral targeting advertisements'' are widely used because they allow users to easily display advertisements for products they like.
Contextual advertising is a system that displays relevant ads based on the page the user is viewing or the words the user searches for. For example, when you search for 'shampoo' on Google, the 'shampoo ad' that appears in the search results list is a contextual ad. On the other hand, behavioral targeting advertising is a system that displays ``advertisements that the user is likely to like'' based on the user's behavioral history. For example, if a user is determined to be interested in working from home based on their behavior history, an advertisement for an office chair or monitor will be displayed.
◆Mechanism to collect action history What is 'third party cookie'?
Ad providers that use behavioral targeting advertising can track behavioral history across multiple sites by using 'third-party cookies.' Third-party cookies are cookies issued by a third party rather than the administrator of each site, and when a user browses multiple sites, their behavior history is saved in the same third-party cookie.
By using third-party cookies, the advertising provider uses third-party cookies to target users who viewed a ``page about working from home'' on site A and a ``page about office chairs'' on site B to ``users who are interested in working from home and office chairs.'' It can recognize you as a “user” and show you ads about working from home or office chairs. Furthermore, it is possible to display advertisements related to monitors by inferring that users are also interested in monitors based on the information that they are interested in working from home and office chairs. For this reason, phenomena such as ``Even though I am visiting the site for the first time, an advertisement of my preference is displayed'' or ``An advertisement about a product that I am interested in but have never searched for is displayed'' occur.
Third-party cookies are a mechanism for advertisers to deliver advertisements to appropriate users, but they can also be a mechanism for violating privacy for users. For this reason, there are growing calls for the abolition of third-party cookies, and in May 2023, Google decided to phase out third-party cookies in Chrome . Google has declared that it will begin testing to abolish third-party cookies by 2024, and future trends are attracting attention.
Google announces that it will start an experiment to abolish third-party cookies for 1% of Chrome users in 2024-GIGAZINE
◆ What is the 'mobile advertising identifier' that collects behavior history?
iOS and Android use a mechanism similar to third-party cookies called 'mobile advertising identifiers.' Mobile advertising identifier is a mechanism used when distributing advertisements on apps, and by assigning a unique ID to users, it is possible to collect user behavior history across multiple apps.
Similar to third-party cookies, mobile advertising identifiers have been cited as having privacy concerns, and there are moves to restrict the use of mobile advertising identifiers. In 2021, Apple introduced the enhanced privacy policy ``App Tracking Transparency (ATT),'' allowing users to choose whether or not to use iOS's mobile advertising identifier ``IDFA.'' At the time of writing, the following screen is displayed when installing an app that uses IDFA, and users can refuse IDFA to collect their behavior history by tapping ``Request app not to track me.'' Masu.
◆ What is the EU's effort to regulate behavioral targeting advertising?
In the EU, the general data protection regulation (GDPR) came into force in 2018 to protect personal information. As a result, businesses providing services within the EU are now required to obtain user permission when collecting user data. The scope of GDPR regulation is wide-ranging, and behavioral targeting advertising is also subject to regulation. In fact, in January 2023, Meta was fined approximately 54.7 billion yen for displaying behavioral targeting ads on Facebook and Instagram without obtaining user permission.
Meta will be fined approximately 54.7 billion yen for ``forcibly displaying user tracking advertisements on Facebook and Instagram'' - GIGAZINE
Movements to regulate behavioral targeting are progressing outside the EU, but the EU's GDPR is unique in that it requires businesses to use an 'opt-in' method that allows businesses to collect personal information only when the user gives permission. For example, California's privacy laws require ``businesses that sell users' personal information'' to set up ``settings that allow users to refuse the sale,'' but this only applies if ``the user refuses.'' Since it is an opt-out method of not selling, if the user does not notice that the information is being sold, it will be sold as it is. On the other hand, GDPR requires an opt-in system, which prevents information from being collected without the user's knowledge.
In addition, Mr. Balagopalakrishnan said, based on the situation that ``development of highly profitable iOS apps is more focused than Android apps,'' he said, ``If regulations are tightened in the EU, service providers will be able to make profits. 'This could lead to a decline in investment in the EU in favor of other regions with superior economic performance.'
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