Software May Collect, Sell Data About Kids Chat Habits
Parents who install software sold under the Sentry and FamilySafe brands to monitor their kids' online activities may be unknowingly permitting the developer to collect and sell marketing data about their children, according to an Associated Press report on Friday.
The software brands in question, developed by Syosset, NY-based EchoMetrix Inc., can read private chats conducted through Yahoo, MSN, AOL and other services. This information can then be sent back to the company and offered to advertisers seeking ways to target marketing messages to children.
"This scares me more than anything I have seen using monitoring technology," child-safety advocate Parry Aftab told the Associated Press.
"You don't put children's personal information at risk."
While the software does not gather the children's names, addresses or other identifiable information, it knows the ages of the kids because parents customize the software to a level of permissiveness according to their child’s age.
The Associated Press cited five other makers of parental-control software, including McAfee Inc. and Symantec Corp.
, which said they do not sell Internet chat data to advertisers.
One firm, CyberPatrol LLC, said it would never consider such a practice.
"That's pretty much confidential information," Barbara Rose, the company's vice president of marketing, told the AP.
"As a parent, I would have a problem with them targeting youngsters."
EchoMetrix CEO Jeff Greene told the AP that parents who don't want the company to share their child's information with businesses can choose to opt out by visiting the company's Web site. However, the Associated Press said the option was not in the agreement contained in the program itself.
According to that agreement, the software sends data to "trusted partners,” although confidentiality agreements ban those clients from sharing the data with others.
The agreement says the company has "a parent's permission to share the information if the user is a child under age 13,” in accordance to federal privacy laws.
Although sales figures were not available, EchoMetrix software is rated among the top three for parental control by the technology Web site CNET.
The Sentry and FamilySafe brands include parental-control software such as Sentry Total Family Protection, Sentry Basic, Sentry Lite and FamilySafe, although SentryPC is produced by a different company and has no association with EchoMetrix.
The Lite version is provided at no charge, while others range in price from $20 to download and $10 a year for monitoring, to roughly $48 a year. The same company also offers software under partner brands such as AmberWatch Lookout.
Aftab said that many people fail to read the fine print before clicking to agree to the licensing agreement.
"Unless it's upfront in neon letters, parents don't know," he said.
EchoMetrix, formerly known as SearchHelp, said companies purchasing the chat information have included News Corp.'s Fox Broadcasting, Dreamworks SKG Inc., and Viacom Inc.'s Paramount Pictures.
But the company told the AP that only Paramount Pictures agreed to have its affiliation disclosed. The others declined for competitive reasons, but Fox told the AP that while it never used the system, it sat in meetings in which EchoMetrix pitched the product.
According to recent regulatory filings, EchoMetrix could use the business. Indeed, the filings show the company has been losing money, and that as of June 30 its liabilities exceed its assets.
There is now a “substantial doubt about the company's ability to continue as a going concern,” the filing read.
To obtain the marketing data on the EchoMetrix system, companies enter keywords, such as the name of a new product, and also specify a date range. In return, they receive a "word cloud" display of the most commonly used words and snippets of actual chats. The system can partition data according to age groups, region and even the type of instant-messaging program used.
Greene said the company complies with current U.S. privacy laws.
"We never know the name of the kid - it's bobby37 on the house computer," he told the AP.
What the system does reveal, however, is how "bobby37" and other teens feel about new computer games, upcoming movies, clothing trends and other topics. Such data can help marketers tailor their marketing messages as buzz begins building about a particular product.
For example, days ahead of the "Harry Potter and the Half-Blood Prince" opening in July, teen chatter about the film spiked across the Internet with primarily positive reactions.
"Cool" turned out to be one of the most heavily used words in teen chats, blogs, forums and on Twitter. The positive feedback foreshadowed a solid opening for the film.
The system also tracked hype ahead of for Microsoft Corp.'s "Natal," a forthcoming Xbox motion-sensor device that replaces the conventional button-based controller. Although the software giant is not a client of Echometrix, the company used "Natal" to demonstrate how its data can benefit marketers.
Greene said teen conversations about Natal were centered on price and availability, suggesting that Microsoft should assure would-be customers that there will be an adequate stock and that pre-ordering can lock in a price.
Rival data-mining firms such as J.D. Power Web Intelligence, a unit of J.D. Power and Associates, also monitors the Internet for consumer chats. However, Vice President Chase Parker told the AP that the company does not read any data that's password-protected, such as the instant messaging sessions that EchoMetrix gathers for marketers.
Forrester Research principal analyst Suresh Vittal said EchoMetrix might have to make its practices more visible to parents.
"Are we in the safeguarding-the-children business or are we in the business of selling data to other people?" he said during an interview with the AP.
In the case of the latter, then "it should all be done transparently and with the knowledge of the customer,” he said.