It’s not just a problem of individual privacy settings, because as The Wall Street Journal revealed, social networks have been breaching their own privacy policies by sharing with advertisers user names or IDs tied with profile pages, when users clicked on ads.

Facebook in particular went one step too far: Sending information, in form of an URL, about the page being viewed can cause privacy concerns, but when the user name or ID of the person who clicked on the ad is shared too, then the advertiser could collect personally identifiable information without users’ permission.

Zuckerberg announced that in the coming weeks, important privacy changes will begin on Facebook with simpler privacy controls and an “easy way to turn off all third-party services”.

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Web developers can integrate the social graph to their websites with the Like button, the Activity Feed, the Facepile, the Recommendations plugin, the Like Box, the Comments and the Live Stream plugins that add a social layer to websites, personalizing users’ experience in exchange for their privacy.

Without the need of logging into Facebook on the website you are visiting, if you have logged into Facebook earlier in your browsing session you will be able to click on a Like button and create a connection between you and the page, or the item liked on a page, that is shared with applications and your Facebook friends: You will be able to see if your Facebook friends liked the page you are visiting, their comments and recommendations, unless you turn off Instant Personalization from your account’s privacy settings.

Semantic markup is used to specify the nature of the liked object (a movie, a book, a restaurant, etc.), and it’s the way Facebook can take advantage of its growing 400 million user base to collect structured data and target users effectively.

User profiling and ad targeting will benefit enormously by the amount of data Facebook will be able to collect from all the websites implementing Social Plugins. Whether this will be just the next step in Facebook monetization strategy or the beginning of Web 3.0 it’s impossible to tell, but many analysts believe that, with the Open Graph API, Facebook will become a semantic search engine and own our online identities.

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You can see what data is public (or shared with other users) and what information is private. In fact Google Dashboard can be a useful tool to manage your Google account’s settings conveniently in one place.

Google Dashboard is a page that lets you see all the information associated with your Google account: you can manage settings for Gmail, Maps, Adsense, Analytics, Google Calendar, iGoogle, Google Reader, Google Books, Webmaster Tools, Orkut, Google Talk, Google Wave, AdWords, Google Groups, YouTube, Picasa, web browsing history and all Google products you have ever used while logged in to your account.

When I checked my Dashboard, I noticed that I had shared one photo album ‘with everyone’ on Orkut. I didn’t remember having an Orkut account, so I logged in to Orkut and found out that… I was right. Well, it seems I was still sharing an empty photo Album with everyone on Orkut, after all. Check my photos out in the image below

Is Google Dashboard transparent?

Google doesn’t tell how all this data is used, so the Dashboard can’t be the solution to all concerns about internet privacy issues, especially those related to online activity tracking practices.

Google knows that the Dashboard isn’t enough (yet) and explains more about Server logs, Cookies and Ads Preferences in a useful Google Help article. Go to your Ads Preferences Manager to edit your Interest categories and eventually opt out from them.

Watch the YouTube video below to see how Google Dashboard works.

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It’s no surprise, then, that more than half of the internet’s top websites use Flash Cookies to track users and store information about them, as UC Berkeley researchers show in their paper on Flash Cookies and Privacy.

Local Shared Objects usage can be legitimate and beneficial for internet users, by saving information that can improve web surfing, like user names and preferences on audio volume for watching videos on YouTube, or personal highscores on online gaming websites for instance.

However concerns about Behavioral Targeting are rising, and while Adobe explains in a very clear and detailed way what third party Local Shared Objects are and how to eventually delete or disallow them, only internet savvy users who know about their existence and their purpose can actually manage Flash Cookies.

New online information privacy regulations are expected, and educating internet users about tracking activities carried out on websites should begin from explaining how personal information is collected and by making Flash Cookie removal fast and easy.

Flash Cookie image from comiccoverage.typepad.com by Mark Engblom.

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At least this is what the results of “Contrary to what marketers say, Americans Reject Tailored Advertising, and three activities that enable it”, a joint research from the University of Pennsylvania and UC Berkeley, suggest. Online information privacy is a hot topic, not only in the US, and whilst even savvy internet users are misinformed about the implications of websites’ privacy policies, two thirds of the 1000 internet users interviewed do not welcome advertisements tailored to their interests, moreover when online (and offline) activity tracking are the founding stones of such advertising.

In fact the study shows that an additional 7% wouldn’t agree to being tracked on the same website displaying ads, 18% would averse to tracking on other websites (bringing the total number of American internet users expressing aversion to online tracking to a grand 84%), and 20% wouldn’t accept to be tracked offline.

There may be several reasons that explain why Americans reject Behavioral Targeting:

1. A general concern about sharing private data online
2. Antagonism to being followed without knowing how or with what effects (interaction on other sites in this case)
3. A preference towards dividing browsing activity into different contexts (work, play, etc.), to avoid embarrassment at the work place for instance
4. The fear of being object of selective advertisements that could put them at a monetary disadvantage (this fear would be stronger in recession times)
5. General mistrust caused the web bad reputation regarding identity theft and scam sites

The way the research poses the questions during the 20 minute phone interview seems to ignore the simple fact that any internet user would prefer browsing through websites with no ads at all (except for Natural Born Clickers), instead of being disturbed by tailored or generic ads, and as The Dapper Blog pointed out, no question like “would you prefer an ad that has something to do with your interests or an ad for teeth whitening / male virility / MySpace themes?” was asked.

How to gain internet users’ trust back and sweeten the cookie

Openness and respect in disclosing how collected behavioral data is used by ad networks, and the option to delete or select what personal information websites can use are the solutions suggested by Joseph Turow, one of the authors of the research, Professor of Communication at the Annenberg School for Communication, University of Pennsylvania.

Consumers can’t be educated about the benefits of targeted advertising if they aren’t provided with the tools to control over what personal data is collected by websites and how it will be used.

Moreover, the way websites’ privacy policies are presented to internet surfers is probably the most user-unfriendly example of content we can find on the internet: long, endless walls of text written in small fonts showing no effort whatsoever to make them readable and understandable.

Turow suggests ad networks adopt a friendlier, dashboard like, user interface, to allow people easily understand why they got presented a specific ad and control the information they want to share with websites. Users would access this privacy dashboard by clicking on an easily identifiable icon shown on ads.

Another solution could be the freemium approach: making premium content available only to those willing to pay for it. Sharing personal information with websites would be the price internet users could be willing to pay in order to access not only to tailored ads, coupons or news, but also movies and tv shows (YouTube), or online video games.

I expect Google taking the lead in both directions, sooner or later, especially after acquiring a bigger share of the display advertising market thanks to the recent announcement of DoubleClick Ad Exchange. And because they would do no evil.

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