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    Wall Street Journal: Ad Networks Bypass iPhone Privacy Rules

    The Wall Street Journal reports on advertising companies’ attempts to circumvent user privacy rules for Apple’s iPhone and iPad devices:

    Mobile ad networks are using new techniques to target iPhone users by circumventing Apple Inc.’s earlier efforts to protect user privacy.

    Apple last summer said it would stop allowing app makers to use a unique identifier embedded in iPhones and iPads to track users as they move from app to app, which is an important way for advertisers to position their ads for appropriate audiences.

    To avoid the limits of Apple’s rules, ad networks that serve advertisements within mobile apps have started using new identifiers that collect information like location and preferences as the user moves across apps. One of the tracking systems is based on a unique identifier located in the iPhone’s wireless networking hardware—a system known as Open Device Identification Number, or ODIN. The other prominent tracking alternative, called OpenUDID, uses the device’s built-in copy-and-paste function.

    These networks claim they will lose millions of dollars a week in revenue unless they can gather personal data from users to better target them. Privacy advocates argue these new techniques could allow marketers to identify individuals and violate unsuspecting users’ privacy. […]

    The Federal Trade Commission is looking at mobile tracking technology in general as part of a broader effort to protect consumers’ privacy. In March, it issued guidelines for companies to adopt better privacy practices and urged Congress to pass comprehensive privacy legislation. […]

    The ad networks say the identification systems only recognize users as a random set of numbers and could never personally identify people. But privacy advocates argue that as marketers create consumer profiles with these new tracking tools, they could eventually acquire enough information to link the data—such as consumer habits, location and personal preferences—back to a person’s name.

    The cat-and-mouse game comes as advertisers try to replicate the tools they have for tracking consumers online for mobile phones, where the ad market is far more nascent but growing quickly. U.S. mobile advertising revenue is expected to reach $2.61 billion in 2012, almost double from last year, according to eMarketer.

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