The Federal Trade Commission recently took enforcement action against GoodRx[1] and BetterHelp[2], two digital healthcare platforms, for allegedly sharing user health data with third parties for advertising. Both cases highlighted the use of third-party tracking pixels, which enable platforms to amass, analyze, and infer information about user activity.[3] The remedies in GoodRx[4] and BetterHelp[5] include strong provisions like bans that place strict, comprehensive limits on whether and how certain user information may be disclosed for advertising. In GoodRx and BetterHelp, this included a ban on the sharing of health information for any advertising purposes, and the BetterHelp order further bans the disclosure of other personal information for re-targeting.
What is pixel tracking?
Tracking pixels have evolved from tiny, pixel-sized images on web pages for tracking purposes to include a broad range of HTML and JavaScript embedded in web sites (and email).[6] Tracking pixels can be hidden from sight and can track and send all sorts of personal data such as how a user interacts with a web page including specific items a user has purchased or information users have typed within a form while on the site.[7] Businesses often want to use them to track consumer behavior (pageviews, clicks, interactions with ads) and target ads to users who may be more likely to engage or purchase something based on that prior online behavior.[8]
How does it work?
Companies who are interested in pixel tracking must first choose a pixel tracking provider. The provider will then generate a tracking pixel, a small piece of code that will be placed into the website or ad and define their tracking goals such as purchases, clicks, or pageviews. The company will then use some version of a dashboard or interface with the provider to track, test, and refine their settings.
Pixel tracking can be monetized several ways. One way to monetize pixel tracking is for companies to use the tracking data collected to improve the company’s own marketing campaigns. The data can be used to target more specific audiences with ads and other marketing messages. Another is that companies can monetize the data collected by further optimizing their own ad targeting systems and charging other companies to use its advertising offerings.[9]
