On November 6, Facebook outlined a strategy to integrate more targeted advertising into its popular social networking website. Facebook CEO Mark Zuckerberg saw the new initiative as an opportunity for users to refer products to each other and allow friends to share information as they shopped online and visited other websites. The system, called Beacon, was also intended to lead to more relevant -- and profitable -- advertising through precise targeting based on a user's buying habits, social circle and geography.
But on December 5, after receiving numerous complaints from the high school kids, college students and young professionals who populate Facebook, Zuckerberg issued an apology for a program that, among other things, could track a user's web behavior and report it on a Facebook user's profile page. The problem: Facebook didn't initially ask its customers to opt in to the targeting program. As a result, some customers were caught off guard by Facebook's sudden use of detailed user tracking. In conjunction with the apology, Facebook introduced new privacy options to give users more control over how Beacon operates.
The incident raises many questions, according to experts at Wharton. For example, what is the balance between privacy and online ad targeting? Will marketers continue to experiment? Are these early efforts just a precursor of what's to come? Will consumers become more wary of sharing information? Does privacy really exist online?
Those questions don't have quick answers given that online advertising is entering an experimental age where marketers, Internet giants and consumers are fumbling to find the proper balance between more advanced ad targeting and privacy. Indeed, experts at Wharton say that companies aren't quite sure where the line between the two is until they trip over it.
"We are in a situation with the Internet where we are having an escalation of marketing activity to hyper-target consumers," says Joseph Turow, director of the Information and Society Program at the Annenberg Public Policy Center (APPC) at the University of Pennsylvania.
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