Privacy Concerns Rankle Industry

BOSTON (05/26/2000) - The privacy debate is likely to get more heated with the growing popularity of a wireless technology that detects which stations car radios are tuned to and feeds the information to advertisers via the Web.

Mobiltrak Inc., a Birmingham, Alabama-based start-up firm, says it can help focus an advertising campaign by ascertaining which radio stations potential customers listen to in the vicinity of retail outlets.

Mobiltrak uses FM radio "sniffers" that can detect, from several hundred feet away, the station to which a car radio is tuned. It can do that because every radio receiver is also a minitransmitter.

"This gives us a large-scale, perfectly random sample from 10% to 20% of the passing traffic," said Jim Christian, Mobiltrak's CEO.

Mobiltrak equipment, mounted in unobtrusive shelters about the size of household cable TV boxes, can sample as many as 100,000 listeners per installation per day, Christian said. The company operates in the Phoenix, Los Angeles, Atlanta and Toronto metropolitan markets and in more than 100 stand-alone retail locations outside of those markets.

Privacy advocates said they view Mobiltrak's activities with alarm.

David Banisar, the Silver Spring, Maryland-based deputy director of Privacy International, said Mobiltrak is conducting the kind of "random electronic surveillance" carried out by the National Security Agency, which is the government's electronic-intelligence-gathering organization.

Christian said the Mobiltrak technology performs a truly random sampling that doesn't identify a particular vehicle. But Banisar said he worries about the potential merging of the technology with intelligent vehicle highway systems and location-reporting cellular phones that could allow Mobiltrak to zero in on individuals.

"This is a situation like the Web, where information is secretly collected without any discussion of whether it is a good idea," Banisar said.

For subscribers, though, Mobiltrak has provided a valuable service.

Lenny Sage, a vice president at Sage Automotive Group in Los Angeles, said his company, which "spends in excess of seven figures every month" on advertising, has seen a measurable increase in sales by using the Mobiltrak technology to target its advertising dollars.

The company's Universal City Nissan dealership - which Sage said is the largest Nissan dealership in the world, with annual sales of $250 million - used Mobiltrak to determine that it had failed to advertise on a station to which a large number of passing cars were tuned.

"We started advertising on that station, and sales went up 22% in a month," Sage said.

Susan Robertson, a marketing manager at ParkSide Mall in Pinellas County, Florida, began using Mobiltrak's service last October. She said the Mobiltrak data is significantly better than ratings information from The Arbitron Co., a nationwide radio and TV ratings firm based in New York.

"Mobiltrak samples about 85,000 vehicles a week in front of our building," Robertson said.

A spokesman for Arbitron said his company provides the kind of detailed demographics that "radio stations live and die for." He added that he doesn't view Mobiltrak as a competitive threat.

"They don't measure in-home or office listening, and they don't measure AM radio stations," the spokesman said.

Monitoring and More

But the Mobiltrak technology does more than just monitor car-radio usage, Christian said. The company's Phoenix data center houses a 64-bit Compaq Computer Corp. Alpha-based system, as well as five high-powered Intel-based servers. The servers apply sophisticated signal processing algorithms to filter out extraneous transmissions such as signals from aircraft, which use frequencies next to the band for communications.

Christian said that his technology can detect AM stations but that Mobiltrak doesn't deal with AM because the band is "very noisy."

The data center processes millions of records each month from the four major markets, Christian said, and delivers location-specific listening patterns to clients on a password-protected Web site.

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