Major Internet Companies Capture Consumer Data for Advertiser Dollars

By March 13, 2008

Web companies are collecting personal data about web surfers to predict relevant online content and advertisements.   The next time you’re searching for information on vacations or purchasing prescription drugs on the Internet, ke

ep in mind that your habits are being watched and tracked.   On Monday March 10th, The New York Times (NYT) reported that a new analysis of online consumer data, conducted for the NYT by research firm comScore, shows a considerable amount of consumer data is landing in the hands of large Internet companies, such as Yahoo, Google and AOL.   Audience size is a measure of a website’s success. The larger the audience and the more a Web company knows about them can translate into more advertiser dollars. Microsoft and Yahoo, for instance, have acquired a number of companies within the last year to enrich their consumer data. Since many advertising deals are about data, the richer your data, the more relevant the ads are for online consumers.   Web companies can easily capture specific data about consumer behavior, such as tastes and preferences, by following consumers as they move around the Internet. In turn, the information is used to charge advertisers a higher price for customized ads that will return a higher response rate.    However, amassing this data is not all about getting advertising revenue. According to Executives at the largest Web companies, collecting this data benefits consumers who in return see ads relevant to their interests.    Michael Galgon, Microsoft’s chief-advertising strategist says “You’re getting content about things and messaging about things that are spot-on to who you are” as reported in the NYT.   In December 2007, comScore studied 15 major media companies and how they collected consumer data online. The analysis captured the number of searches, display ads, videos, and page views that occurred on those sites and estimated the number of ads shown on their ad networks. These are also known as “Data transmission events,” or the times when consumer data was sent back to a Web companies’ servers. ComScore recorded at least 336 billion transmissions each month from Yahoo, Google, Microsoft, AOL, and MySpace, not including their ad networks.    The information transmitted might include the person’s ZIP code, a search for jobs or vacation information, or the purchasing of personal items.    Yahoo won out with the most instances of data collection within a month on its sites – about 110 billion collections, or 811 for an average user. Yahoo also has partner sites, such as eBay, that allow for other opportunities to learn about the average person.   MySpace followed close behind.   Google also has a lot of data collection events, but the company feels it is different because it mostly uses only current information rather than the past actions of web surfers to choose ads.   As pointed out by the NYT, Yahoo’s large database explains why AOL and Yahoo have discussed a possible merger and why Microsoft is willing to pay $41.2 billion to buy the company.    Regardless of how much data Web companies already have, they will continue to find new ways to obtain more data and thereby increase their leverage in the advertising world. Google, for instance, only yesterday received the go-ahead from the European Union to purchase DoubleClick, an ad delivery company with a wealth of consumer information.   By Kathleen Clark   FEEDBACK For comments on this article, email us at

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