The return on online advertising investments continues to increase as behavioral advertisement companies, like Tacoda, offer more accurate placements of ads at the right time and directed to the right consumer. Whereas previously companies bought ads on Web sites related to the product being promoted (e.g., a healthy drink on the GNC Web site), more targeted advertising now pursues a particular customer rather than all visitors to a particular Web site.

Tacoda tracks the behavior of a person’s Web browser, so that it knows when the user frequents certain sites and thus determines the particular interests of that consumer. On the basis of the consumer’s type, Tacoda strategically places advertising on specific sites—but only on that person’s browser. Another person who goes to the same Web site at the same time receives a different ad, more in line with his or her own interests.

Because they know that their advertising will be far more effective and efficient, more and more companies are devoting advertising dollars to the Web. When Pepsi placed Aquafina Alive ads on browsers for health-conscious customers, the click rate tripled. This type of precision is better than any previous type of advertising has been able to offer.

In a nod to privacy concerns, these advertising methods do not return personal profiles but rather information about the activity on the browser. Even when multiple users employ the same browser, behavior advertising firms can distinguish patterns and identify which user is at the computer at certain times. And people who do not want their preferences passed on can opt out by changing their browser settings.

Discussion Questions:

1. Such advertising clearly is good for companies, but do you think that a customer’s privacy is at risk?

2. As a consumer, would you opt out of having your Web activity tracked?

Emily Steel, “How Marketers Hone Their Aim Online,” The Wall Street Journal,

June 19, 2007.