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Congress Targets Online Ad Tracking

Will Do Not Track legislation hurt small businesses?
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Just when it seemed Democrats and Republicans couldn't get along, a recent spate of bills has them working together. The bills deal with behavioral tracking, which is used by advertising networks to monitor people's online behavior. The networks use the data to tailor ads to people's interests.

Some of these bills explicitly propose so-called Do Not Track measures, which would let consumers turn off online behavioral tracking by clicking a button. This legislation would hurt businesses, says Mike Zaneis, senior vice president of the Interactive Advertising Bureau, a trade group for online advertisers. "If you have a big, red button on the browser that says do not track, of course people will press it," he says.

Some entrepreneurs agree. "It's a huge part of our ad spend," says Scott Jordan, founder of Scottevest, a Ketchum, Idaho-based company that makes travel clothing. "It would affect us significantly." Policymakers, however, point out that behavioral tracking accounts for just 5 percent of all online ad spending.

With legislation looming, the online ad industry has recently taken steps to address privacy concerns. Billions of ads now include an AdChoices link that lets consumers opt out of tracking. Zaneis is urging ad networks to participate in programs like AdChoices and says business owners should think twice about working with those that haven't.

IMAGE: Eric Palmer
From the November 2011 issue of Inc. magazine




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