Surveillance Advertising:
What is it?
Surveillance advertising, also known as targeted advertising or behavioral
advertising, is the practice of showing individual consumers different advertisements
based on inferences about their interests, demographics, and other characteristics
drawn from tracking their activities over time and space.
Tracking is done1 primarily by identifying the internet-connected devices that 1. Behind the One-Way Mirror: A Deep Dive
Into the Technology of Corporate
consumers use to search for information, make purchases, engage with social media, Surveillance, Electronic Frontier Foundation,
play games, watch videos, and participate in other aspects of our increasingly digital 2019
lives. When data from these varied activities are combined, it paints detailed portraits
of individuals or households, even without personally identifiable information.
However, consumers often provide these personal details to create accounts, make
transactions, respond to questionnaires, enter contests, and conduct other digital
activities, further enriching their profiles. In addition, data brokers sell information
about people from public records and commercial sources, which provides another
data source for profilers.
The “ad tech” industry is central to surveillance advertising. Ad tech companies
conduct tracking, create profiles of consumers, match consumers with ads based on
their profiles, and place those ads where they’ll see them. Individual companies in
this industry may perform some or all of these tasks. Businesses that want to advertise
their products or services to people who fit certain profiles (advertisers) pay ad tech
companies to find those consumers and deliver ads specifically to them.
On the other side of the equation are businesses that operate the websites and apps
where ads appear (publishers). Ad tech companies lurk on publishers’ platforms
(usually with their permission, but not always), tracking what consumers do there in
order to build profiles. When a consumer visits the platform, ad tech companies
broadcast the consumer’s profile to advertisers (or to other ad tech companies
working for advertisers). An automated auction then takes place in a matter of
2. Targeted Online: An industry broken by
milliseconds to sell the right to advertise to that person.2 The publisher makes money design and by default, EDRi, 2021
when the consumer clicks on the ad. Google and Facebook maintain their own ad tech
ecosystems, tracking consumers on their platforms and other sites and apps. Based on 3. Dozens of Companies Are Using Facebook to
the consumers’ profiles, Facebook shows them ads on its site on behalf of advertisers; Exclude Older Workers From Job Ads,
ProPublica, 2017
Google does the same thing and also delivers targeted ads to consumers on other 4. Websites Vary Prices, Deals Based on Users'
publishers’ websites. Information, Wall Street Journal, 2012
5. Consumer Groups File FTC Complaint
What Are the Concerns About Surveillance Advertising? Against PepsiCo for “Deceptive and Unfair
Digital Marketing Practices” Targeting Junk
Food to Teens, CDD, 2011
Surveillance advertising can perpetuate discrimination in housing, credit, 6. How is Technology Innovation Impacting
employment, and other economic opportunities.3 It also hides personalized pricing Gambling Addiction?, American Addiction
Centers, 2019
from consumers,4 leaving them unaware that a company has charged them a different 7. Apps Installed On Millions Of Android
amount than others. Surveillance advertising is also sometimes used for promoting Phones Tracked User Behavior To Execute A
Multimillion-Dollar Ad Fraud Scheme,
unhealthy products,5 encouraging gambling,6 and perpetrating fraud.7 The data that BuzzFeed News, 2018
are fed into algorithms to profile consumers may be inaccurate,8 but even when they 8. More Than Half Of Age Data In Mobile
Exchanges Is Inaccurate, AdExchanger, 2017
are correct, the fact is that surveillance advertising is unfair.
Consumer Federation of America
1620 Eye Street, NW, Suite 200 · Washington, DC 20006 · (202) 387-6121 · CFA@ConsumerFed.org
www.ConsumerFed.org
9. Data Brokers and Security, NATO Strategic It uses invisible and invasive techniques to manipulate consumers and robs them of
Communications
real choice in the marketplace. Furthermore, the enormous stores of personal data
10. Federal Agencies Use Cellphone Location
Data for Immigration Enforcement, Wall collected for surveillance advertising put consumers at risk for exposure, identity
Street Journal, 2020
theft, and more malicious tracking.9 It can also lead to erosion of their 4th Amendment
rights, as government agencies can purchase data that otherwise requires a warrant.10
How Can Consumers Avoid Surveillance Advertising?
11. California Consumer Privacy Act: Are It is extremely difficult for people to avoid tracking and profiling.11 Consumers can
People Protected?, Consumer Reports, 2020
clear cookies on their computers, but not all tracking involves cookies. Ad blockers
allow consumers to stop seeing some ads and thus stop some tracking by default, but
12. globalprivacycontrol.org, 2021 not all. Consumers can use global privacy controls on their internet browsers to send
a signal communicating that they don’t want their data to be sold, but that says
nothing about data collection.12 Most importantly, companies can simply ignore these
signals unless the law requires companies to honor them.
How Does Surveillance Advertising Affect Small Business?
13. Facebook Ad Campaign Promotes Facebook touts surveillance advertising as vital for small businesses to connect with
Personalized Advertising, Wall Street Journal,
2021 consumers efficiently.13 It’s important to remember, though, that Facebook relies on
14. Here's how big Facebook's ad business millions of small business advertisers for the bulk of its ad revenue.14 A 2019 study
really is, CNN, 2020
found that surveillance advertising is not as effective at actually targeting the desired
15. How Effective Is Third-Party Consumer
Profiling? Evidence from Field Studies, demographic or interest group as previously believed, showing low gains over
INFORMS, 2019
random ad placement.15 The idea that small businesses need surveillance advertising
to reach consumers is unfounded.
Is There a Good Alternative to Surveillance Advertising?
16. Landmark Study Proves the Effectiveness Yes! Contextual advertising – placing advertisements based on characteristics of the
of Contextual over Behavioral Targeting,
Contextual Insider, 2021 content of a webpage a user is currently browsing – does not require any tracking of
17. Programmatic market a 'mess' with half individual users. A recent study found contextual advertising to be more cost-
of money still not reaching publishers,
campaign, 2020 effective than targeted advertising.16 Contextual advertising can also provide more
18. After GDPR, The New York Times cut off revenue for publishers. Much of the cost of surveillance advertising goes to the
ad exchanges in Europe — and kept growing
ad revenue, Digiday, 2019 various middlemen in the ad tech industry.17 Since contextual advertising doesn’t
19. Data from Dutch public broadcaster involve this elaborate infrastructure, more of the ad revenue goes to publishers. Both
shows the value of ditching creepy ads,
TechCrunch, 2020 the New York Times18 and Dutch public broadcasting company NOP19 saw revenues
increase after they stopped accepting targeted advertising.
It is important, however, to look closely at what a company is actually doing under
the label “contextual advertising.” Not all contextual advertising systems are the
same, and some so-called contextual advertising systems look more similar to
20. Oracle Audiences, Oracle, 2021 surveillance advertising, taking into account consumer data from online behavior and
outside sources.20
21. Ban Surveillance Advertising, 2021 The risks of surveillance advertising outweigh the benefits, and contextual advertising
22. Ban surveillance-based advertising, provides a good alternative. Therefore, many organizations in the U.S.21 and other
Forbrukerradet, 2021
countries22 are calling on legislators to ban surveillance advertising.
See https://consumerfed.org/surveillance-advertising-factsheets/ for more information about
surveillance advertising (August 2021).
