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COMPANIES AT RISK OVER PROLIFERATION OF WEB BUGS

Source: TechWeb

Posted on August 14, 2001

      The use of Web bugs to collect data on visitors to Internet sites has rocketed 488 percent in the past three years, and their infestation may make privacy-sensitive site visitors wary of the companies that use them, researcher Cyveillance said Tuesday.

      A survey by Cyveillance showed that a Web page is nearly five times more likely to contain a hidden bug now than in 1998. The Arlington, Va., based provider of automated Internet data compared a random sample of more than one million Internet pages gathered during 1998 and 2001.

      Web bugs are hidden graphics embedded in online pages. Unnoticed, they can gather information such as the user's Internet Protocol address, the type of browser used to retrieve the bug, and previously set cookie values. Cookies store information that enables personal and transactional profiling.

      Web site developers typically use the bugs to customize and streamline the user's online experience, or to gather statistics on the number of visitors to the site, Cyveillance said.

      The proliferation of Web bugs combined with the explosive growth of the Internet and vast online partner networks multiplies the risk to the average company of posing a privacy threat to consumers, Cyveillance said.

      The 2001 data revealed that the sites of eight of the top 50 brands, or 16 percent of these sites, contained Web bugs on their home pages, often just one click away from posted privacy policies. Sub-pages within a site also harbored Web bugs, reflecting Web designers' awareness that users often enter sites through other venues than the home page.

      But the invisible nature of the bugs feeds the privacy debate, especially as it attracts more media attention, and could result in a customer backlash, Cyveillance said. Making matters worse, the data Web bugs collect is often shared with third parties, the researcher said. The loss of control over personal information is what generally concerns online users the most, privacy professionals have said.

      "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,'' said Cyveillance CEO Panos Anastassiadis.

      He cited Forrester Research findings that 41 percent of Web buyers it surveyed last year had asked to be deleted from a database because they believed the organization had misused their information.

      "Such privacy concerns can undermine customer loyalty, damage corporate image, and dilute brand equity, ultimately impacting a company's bottom line," the Cyveillance study said. Companies that balance the need for customer information with their right to privacy will be better positioned to succeed, said the study's authors Brian Murray, senior director, and James Cowart, analyst, both in client services at Cyveillance.

      Pages with Web bugs were usually pages with leading brand name placement. The 2001 survey sample pool had a top brand placed on 26 percent of the pages. And 96 percent of pages with Web bugs carried a top 50 brand name, the researcher said.

      Many more personal pages also contained Web bugs in 2001 than in 1998. Cyveillance said the increase may be the result of framing, advertising tools and utilities large hosts or third parties provide, such as Internet service providers or community sites.




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