Marketers Watch as Friends Interact Online

Birds of a feather flock together. Or, in the Internet age, a customer’s friend is a potential customer.

Embracing those truisms, some big marketers, including Sprint and eBay, are turning to small start-ups to help them tap social-networking data to find would-be clients among the friends and acquaintances of existing customers, to the dismay of some privacy advocates.

New York-based 33Across tracks how consumers interact with one another—commenting on posts or sharing messages, for instance—across about 20 sites, online networks and third-party application companies, which build software like games and quizzes for social-networking sites. 33Across says those sites reach a total of 100 million monthly unique U.S. visitors.

Not surprisingly, such tracking of friends and acquaintances has attracted the attention of some lawmakers and regulators. Such ad-targeting approaches are facing increased scrutiny from federal regulators who are investigating privacy issues tied to the Internet. Some lawmakers, concerned about Internet privacy, say they are preparing to introduce legislation in the coming weeks to make more transparent Web sites’ tactics for collecting information on their users.

The ad-targeting companies say that they abide by industry standards and that the information they collect is anonymous and can’t be traced back to individual users. Industry trade groups are introducing standards that let consumers know when they are being targeted by an ad as a result of tracking.

Both Facebook and MySpace allow marketers to target ads on their sites to consumers based on the information users include in their profile, such as occupation, age, location and interests. (MySpace is owned by News Corp., which also owns The Wall Street Journal.) The new group of start-ups thinks that the data mapping connections between people—rather than their profile information—are more valuable.

Read full article from the Wall Street Journal >

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