Marketers Could See Backlash from Web Bugs’ Growth

With the debate raging over privacy issues, the exponential growth of so-called “Web bugs” used to track consumer behavior could wind up biting marketers and technology vendors, according to findings from research firm Cyveillance.

In a new report from the Arlington, Va.-based firm, eight of the Web’s top 50 brands used Web bugs on their home pages.

The problem is that Web bugs — also known as “clear GIFs” — often pass information not just to the publisher, but to a third-party ad server, affiliate marketer, or metrics firm. Theoretically, that information can include the IP address of a visitor’s computer and information attached to a browser cookie — which could include name, email address, search engine keywords, and so on.

Compounding the issue is that Web sites’ privacy policies typically attest that they won’t reveal customer information to external organizations without authorization.

And companies’ use of Web bugs has only grown. During the past three years, the use of Web bugs has increased 488 percent, according to Cyveillance, making a Web page nearly five times more likely to contain a Web bug today than in 1998.

According to Cyveillance, those eight top brands (which the company declined to name) had Web bugs embedded in their home pages — often less than one click away from seemingly contradictory privacy policies.

Such practices could serve to anger consumers, according to Cyveillance’s president and chief executive officer Panos Anastassiadis.

“Online brand management is of great concern to many of our Fortune 50 clients,” Anastassiadis said. “The results of this study emphasize what we’re seeing every day — companies want to earn and retain the trust of their customers, and an association with Web bugs has the potential to seriously undermine those efforts.”

Additionally, study authors Brian Murray and James Cowart warn that as consumer alertness to online privacy issues increases, so do the likelihood for companies to be called to task for their Web marketing practices.

“Whether the intent is benign or not, association with Web bugs could pose a risk to established brands,” they wrote in the study. “As public awareness levels begin to rise, the fact that Web sites are collecting information from visitors without permission is likely to generate more controversy.”

Meanwhile, companies that keep a better reign on their information-collection methods — and keep it “carefully balanced” with consumers’ right to privacy — should fare better in the long run, according to the study.

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