Google is adding a new kind of advertising to its ad network: Interest-Based Advertising, also sometimes known as “behavioral targeting.”

Other companies like Yahoo and AOL already offer similar systems. Google says that advertisers have been requesting interest-based ads for some time, and that this system allows advertisers to more effectively target people who want the items and services offered in ads.

It’s true that behavioral targeting means that ads are shown only to those who have demonstrated interest and are therefore more likely to buy. As an advertiser it’s good to know how this system works. I’ll write more about that tomorrow.

At the same time that behavioral ads are likely to be more effective, they also raise concerns about privacy and user control. Google acknowledges these concerns on its official blog, and attempts to address them:

This kind of tailored advertising does raise questions about user choice and privacy, questions the whole online ad industry has a responsibility to answer. Many companies already provide interest-based advertising and they address these issues in different ways. For our part, we’re launching interest-based advertising with three important features that demonstrate our commitment to transparency and user choice.

• Transparency – We already clearly label most of the ads provided by Google on the AdSense partner network and on YouTube. You can click on the labels to get more information about how we serve ads, and the information we use to show you ads. This year we will expand the range of ad formats and publishers that display labels that provide a way to learn more and make choices about Google’s ad serving.
• Choice – We have built a tool called Ads Preferences Manager, which lets you view, delete, or add interest categories associated with your browser so that you can receive ads that are more interesting to you.
• Control – You can always opt out of the advertising cookie for the AdSense partner network here. To make sure that your opt-out decision is respected (and isn’t deleted if you clear the cookies from your browser), we have designed a plug-in for your browser that maintains your opt-out choice.

To find out more about what Google is doing in this important area, please visit our Public Policy blog and Privacy Center.

These are pretty reasonable options. Scott Gilbertson of Wired points out that they are not ideal, and that the whole thing is pretty intrusive:

In short, Google plans to track your online moves and build a collection of “interests” based on which websites you visit. For example, if you start your day on the Major League Baseball homepage everyday, Google will know that you’re more likely to respond to ads for baseball paraphernalia.

Along similar lines are the “previous interaction” ads that will allow Google to show ads based on demonstrated behaviors. For example, if you put a shiny new Nikon D700 in your shopping cart, but never actually purchase it, Google will offer advertisers a way to place ads for the D700. Think of it as a way of constantly reminding you of the things you’re lusting after.

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In a perfect world Google’s new ad system would be opt-in. Unfortunately in our world it’s opt-out, perhaps not ideal, but at least you can turn it off.

Don’t expect it to be easy to opt out though. Google is using a cookie to turn off the tracking, which means you’ll need to opt out on each and every PC you use and every browser you use on those PCs. Worse, should you ever delete Google’s opt-out cookie, you’ll need to opt out again…

As a consumer and user of the internet, you now need to decide whether it’s OK for Google to keep track of what you see and do online and to show you ads based on it. If you choose “yes,” then you’ll start to see ads that are more applicable to you, and a big pile of information will be stored.

If you’re using a loyalty card to get discounts at your local grocer, like Giant Eagle’s Advantage Card, you’ve already made that decision elsewhere. If you share a computer with others and you don’t each log in separately, your collected information will be based on the pages that all of you visit.

If you choose “no,” then you’ll continue to see ads based only on the search words you just typed or the content of the page you’re currently visiting. They might be less useful to you.

But most importantly, keep in mind that if you do nothing, you’ve effectively chosen “yes.”

Photo credit: “Spy Cam” by PhoebeJ