Interest-based advertising (IBA) is the technical term for a certain type of ad that you encounter on the internet. As you might guess, an ad is “interest-based” when it relates to categories or products that you may be interested in. To put it simply, an interest-based ad is displayed on your device instead of another less relevant ad because advertisers have guessed your likely interests based on information they have collected. Often this information includes the fact that you have visited certain websites or viewed certain products on your device. With this data as a starting point, advertising platforms make educated guesses about the ads you will be most likely to find interesting or relevant.

Some people are glad to have ads that are more relevant to them, while others prefer not to share their information with advertisers. Both views are equally valid! This is why the advertising industry ensures that consumers are able to opt out of IBA if they so choose. Advertisers also include the AdChoices icon on all IBA ads to make sure that consumers can tell whether individual ads are tailored to their interests.

IBA can appear on your computer’s web browser (for example Firefox or Chrome), on the web browser on your mobile device, or on other applications on your mobile device, including games and social media apps. Many other ads that you see online are not interest-based, but are instead displayed on a web page that is relevant to the ad (known as contextual advertising) or otherwise simply displayed in any available advertising spot. In other contexts you may see IBA referred to as “tailored advertising,” “targeted advertising,” or “behavioral advertising,” though these terms are not as precise as “IBA.”

An example may help to illustrate IBA in action. While browsing the internet, Wilma Morris visits a website where she shops for products for one of her favorite hobbies: knitting. While on the site, she begins to research a new set of knitting needles. Distracted by a phone call, Wilma closers her browser and leaves her computer. Later that day, while checking the latest news, Wilma sees the very same knitting needles included as part of an advertisement on the news website she is viewing. This ad is IBA. Farther down the page she sees another ad, this time for yarn sold by a completely different website from the one she visited earlier. This ad too is IBA. On further inspection, Wilma sees that both ads are clearly labeled as IBA with the AdChoices icon.

Wilma may be concerned that the news website, her web browser, or some other company has invaded her privacy in order to show her these ads. Was someone “watching” her shop for knitting needles? To answer this question it is important to keep in mind exactly what information the advertising company needed—and what it didn’t need—to display these ads on Wilma’s computer screen. The company did not need to know anything about who Wilma is, where she lives, or whether her favorite hobby is, in fact, knitting. That is, no one sent the ad off for delivery specifically to Wilma Morris in Centralia, Wisconsin. Instead, the only information the advertising company needed is the fact that someone on the same computer visited the knitting needle web page earlier in the day. It was able to tell that the same device accessed the news website and knitting website by using small text files, known as cookies, stored on Wilma’s computer.

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