Someone is tracking you. Are you O.K. with it?

“Half the money I spend on advertising is wasted. The trouble is, I don’t know which half,” said John Wannamaker, who was among the few ones who began giving advertisements in newspapers for his store. When Wannamaker said this there was no Internet advertising which enables companies to reach their target customer base on the basis of online activities of the users. Their activities are traced by search engines, which have also taken to advertising  turned advertising, on a regular basis, for example, Google and Yahoo.

The world is awash with advertising. Turn your eyes IN any direction and you will find ads of some kind or the other. Advertising plays a pivotal role in boosting the sale of any product. That’s why multinational companies selling cola, health drinks or noodles spend hundreds of crores of rupees every year on hiring models, film stars and cricketers for their promotional campaigns and on buying space in newspapers, TV and websites.

Websites such as Google, Facebook and others spend huge amounts of money on developing, designing and maintenance of their sites but don’t charge even a single penny from users. According to the Facebook website, the website product manager Ami said that they spend about one billion dollars to keep Facebook up and running every year. 

There are many questions: where do they earn from? How do they pay their staff? And how do they manage other expenses? The answer is: they earn from advertising on their websites and make their services free to attract more users.

Online advertising is a sector that is growing bigger with each passing day unlike any other advertising sector. At present, the sector has a turnover of over 400 billion dollars.

It is becoming popular because online advertising enables companies to target their ads to their prospective buyers, not to all the users. And, they can do it by spending a fraction of the price of mass advertising. Internet advertising thrives on Cost per Mille (CPM) or Pay per Click formula of advertising.  Companies need not pay any money if no one notices or clicks on their ads.

Behavioural Advertising or Behavioural Targeting is trending these days. For example, a user who searches for science-fiction books might be presented with the ads of online book stores as he or she continues to browse the web.Users online are concerned about their personal information shared with advertisers. 

Though the sites claim that they show relevant advertisements on the basis of the activities of users on their pages and do not share their personal information with advertisers. There is a company in Canada that is working on an opt-out tool. By using it, web surfers will be able to opt out from behavioural advertising.