Chitika Settles with FTC Over Behavioral Ad Targeting

Chitika has reached a settlement with the FTC (Federal Trade Commission) over online advertising. The complaint by the FTC was about behavioral ad targeting. Individuals could opt out of Chitika’s behavioral ad targeting. Apparently Chitika had mistakenly set the opt out to 10 days rather than 10 years.

Chitika offers a search-targeted advertising solution to web publishers. They deliver interactive text ads relevant to what your users are searching for. Many web publishers (web site owners) consider Chitika an alternative to the Google AdSense program.

According to ClickZ, “The FTC alleges that the company’s opt-out cookies were set to expire after 10 days, rendering them useless at that point. As a result of the settlement, the company within 30 days is required to provide a tool enabling opt-out from collecting data that could be tied to a user or includes a unique identifier. The tool must enable opt-out through no more than one click, and it must maintain opt-outs for a minimum of five years.”

Prior to March 1, 2010, an error in Chitika’s opt-out process mistakenly set opt outs to expire in 10 days rather than the intended 10 years. Since March 1, 2010, Chitika’s option to opt out of any behavioral targeting is a 10-year opt-out.

The following is Chitika’s prepared statement about the settlement:

This morning Chitika, Inc. reached a settlement with the FTC regarding online ad targeting. Chitika places the utmost importance on the privacy of online users. The company believes the agreement will help it continue to place a premium on privacy as its advertising network continues to expand.

– Chitika does not collect and has never collected any personally identifiable information (PII) for ad targeting purposes.
– Since March 1, 2010, Chitika’s option to opt out of any behavioral targeting is a 10-year opt-out.
– Prior to March 1, 2010, an error in Chitika’s opt-out process mistakenly set opt outs to expire in 10 days rather than the intended 10 years.
– The FTC brought this bug to Chitika’s attention in February, 2010; on March 1, the company had fixed it to opt out users for ten years.
– May 2008 through February 2010, the period during which our opt-out process was affected by this bug, Chitika received an average of 30 opt-out requests per month across our international network compared to over 450 million monthly unique users.

Chitika believes very strongly in Internet users’ privacy. Its advertising network is built on the idea that you can protect privacy by never collecting PII and actually have a better, more efficient ad product.

“Personally identifiable information is of no interest to me whatsoever,” says Chitika CEO and founder Venkat Kolluri. “Our advertisements only worry about what you want, not who you are.”

Chitika’s targeting consists of data such as browser, search engine, and search keywords, all of which allow the company to provide the most appropriate possible advertisements without collecting any data which could be used to identify an individual user. The company continues to believe that non-PII data is a targeting method that is best for not only users, but also advertisers and publishers.