Everyone has sent a crumpled up piece of paper swooshing into the waste basket. There is even an iPhone app for that. But most people probably don’t know that using the app sends the user’s phone ID number to at least five different advertising companies. So do such popular apps as TextPlus4 and Pandora, the music recommendation program. Many of them also send information such as age, gender, location, and in the most egregious cases, they also monitor income, sexual orientation, political views, and a host of other information.

An investigation by the Wall Street Journal found that 56 out of 101 apps sent at least the phone’s ID to ad companies without notifying the phone’s owners. It also found that Apple’s iPhone and iPad products were more likely to relay the information that products developed for Google’s Android line.

Apple claims that its products, “cannot transmit data about a user without obtaining the user’s prior permission and providing the user with access to information about how and where the data will be used.”  Meghan O’Holleran of Traffic Marketplace does not believe this to be true. “We watch what apps you download,” she says, “how frequently you use them, how much time you spend on them, how deep into the app you go.”

While the same problem exists on personal computers, the difference is that savvy users can erase the cookies left to track activity. Mobile technology uses a Unique Device Identifier (UDID) instead to track the user’s activities. “The great thing about mobile is you can’t clear a UDID like you can a cookie,” says O’Holleran. In effect, it is an impenetrable super-cookie.

Apple claims to treat UDIDs as “personally identifiable information.” Nevertheless, 45 of the companies that supply Apple and Google with apps did not have written privacy policies. And neither Google nor Apple require them to have one, even though the information can be used to determine information such as where people live. Cross-reference that with other information available, and you have an advertiser’s goldmine.

At present, mobile advertising makes up just 5 percent of the internet advertising market, currently valued at $23 billion. On the other hand, it is the fastest growing segment of that market, and could soon dominate it. Advertisers teaming up with app makers are getting in on the ground floor of what could be a booming business.
Read More at the Business Journal.
Read More at the Wall Street Journal.