It's called behavioral marketing, but it might just as well be called virtual profiling. Websites, search engines, advertising agencies and Internet data collectors - they're all using relatively basic technology to record what you're looking at, how much you like it, and most importantly, what you might want to buy online.
"Advertisers are building large, complex profiles on customers," says Ginger McCall with the Electronic Privacy Information Center. Profiles she says contain all sorts of information about you, where you live, what you do, who your friends are, and what your preferences may be.
All that information is focused into one purpose, says Susan Grant with the Consumer Federation of America: "To serve them with ads that are more directly targeted to things they are interested in."
Depending on your perspective, it's either a great idea, or just a little bit creepy.
Here's how behavioral marketing works. Websites drop what are called "cookies" into a visitor's computer. This cookie is really the technology that tracks us as we click around within a website and as we move from site to site. This detailed information is blended into customer profiles and used mostly by Internet advertising networks to target consumers.
Do you bank online? The cookie will remember. Buying shoes? The cookie tracks where you shop, and how much you spend. Emailing your friends about a new movie? The cookie knows before your friends do.
"You have thousands of websites that consumers go to," says Mike Zaneis of the Interactive Advertising Bureau. "You have thousands of marketers that want to reach those consumers. An ad network is the middle-man."
While some firms try to keep these data profiles as anonymous as possible, Susan Grant notes that even that amount of privacy is ebbing away, thanks to increasingly sophisticated computer tracking.
"It's relatively easy to match certain information such as zip codes and financial information and figure out who somebody is," she says.
All this has some, like Ginger McCall, raising alarms about our eroding privacy online.
"Facebook had transformed their service so that now they're putting a cookie with the user and that cookie can track the user across the Internet. When you sign up with Facebook, you have to give that service your real name so, absolutely, the tracking information is being connected with your actual identity."
It isn't just networking sites like Facebook, or retailers like Amazon. Cookie-generated data is also gathered by data collection companies. That information is packaged into millions of customer profiles that are then grouped, bundled and sold to advertising networks.
Consumer advocates like Ed Mierzwinski of the non-profit US Pirg are not amused.
"These companies have a goal of collecting information, keeping it forever and selling it to as many different kinds of companies that want to buy it," he warns.
Adding to the concerns are a new generation of computer algorithms that amass known information about a user, then draw predictions about what they might be like in their public, and their private lives.
"They can also make assumptions about you in terms of your sexual preferences, your race, your ethnicity or your finances," says Grant. "The information can be accessed and used by somebody for purposes that you never dreamed of."
For example, says Ed Mierzwinski, "You might eventually have that piece of information about your surfing habits somehow collected by an insurance company that would harm you by charging you more."
Advertising networks and websites say they voluntarily follow regulations that prohibit the sharing of private information, especially data on your health or your finances. And says Mike Zaneis, an evolving self-regulatory program will allow web surfers a choice.
"We're talking about a single icon that consumers can easily understand and discover that is delivered in and around targeted ads. 'Click here' if you would like to opt out of all this third party data tracking."
But instead of opting out, critics say, web users should have the choice to opt in.
"If you're the sort of person that likes to have targeted advertising, says Ginger McCall, "then you should be able to opt in to that service. It shouldn't be that you are inherently opted in by default."
"Do I have to opt out of every website that I go to?" asks Mierzwinski. "Why shouldn't the websites that I go to ask me a question? 'Hi Ed, how are you? Do you want to opt in to us collecting information about you so we can offer you what we think are better deals?' Why doesn't it work that way?"
Opt in or opt out - it may not matter because individuals already have the power to control their cookies, just by adjusting their brower's privacy settings.
Not enough, say privacy advocates who argue there are cookies, and then there are cookies: things such as "flash cookies" and "super cookies" that can get around a user's browser controls.
For the time being, when it comes to privacy, Internet users are pretty much on their own.
