It may raise hackles to think that U.S. intelligence officials might be monitoring your telephone and Internet communications, but for most of us it's only the marketers who are really interested in our everyday online activities. And with many billions of dollars at stake, companies are increasingly turning to more sophisticated techniques to identify potential clients and deliver relevant advertising.

Many Internet advertisers rely on cookies, digital code stored on your browser. Some websites place multiple cookies when you visit, allowing them to track some of your activity over time (you can see who is tracking you by installing an application such as Ghostery or Abine's "DoNotTrackMe").

The problem for marketers is that some users set their browsers to reject cookies or quickly extinguish them. And mobile phones, which are taking an increasing chunk of Web usage, do not use cookies.

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To combat the cookie's flaws, advertisers and publishers are increasingly turning to something called fingerprinting. This technique allows a web site to look at the characteristics of a computer such as what plugins and software you have installed, the size of the screen, the time zone, fonts and other features of any particular machine. These form a unique signature just like random skin patterns on a finger. The Electronic Frontier Foundation has found that 94 per cent of browsers that use Flash or Java – which enable key features in Internet browsing – had unique identities.

Fingerprinting may prove a more robust tracking technology than cookies because the user's identify endures even if they erase their cookies. Making changes to your software and settings only makes you more identifiable, not less. An EFF study several years ago found that it is easy to track when someone changes their profiles by adding software updates, for example. You can see what details your computer is transmitting right now by visiting this site.

A startup called TapAd, profiled recently by Forbes, is growing fast from sales of its fingerprinting technology. But the marketers using fingerprinting technology are often reluctant to talk about their efforts, lest they alarm the public. One business transparent about such efforts is a San Francisco start up called AdStack . They have developed a technology that allows firms to send an e-mail but deliver the content only when a user opens it, giving the sender a chance to change the message in a few milliseconds. The e-mail is sort of like a picture frame, with the content delivered interactively much as a webpage. They aim to deliver a personalized message at the right time.

For example, if you open a restaurant promotion in the morning it might advertise a lunch special, or later in the day, dinner. And perhaps they know you like sushi rather than steak. A flower store might advertise different specials depending on their inventory at the time a person opens their e-mail.

In helping clients decide what ads to send via e-mail, AdStack partners with Rapleaf to learn more about people from their e-mail addresses. Rapleaf appends data as such as age and gender, and says it has at least one field of additional information for about 80 per cent of all U.S. consumer e-mail addresses. Armed with this extra personal data, the advertiser, using an AdStack plugin generating code in their e-mail, tries to serve up the most relevant ad to an individual user. AdStack says clients have included online travel companies and retailers such as Publishers Clearing House. They charge between $1,000 and $50,000 for their services, depending on how many e-mails are sent out in an ad campaign, says CEO Evan Reiser.

The company uses fingerprinting rather than cookie technology because cookies do not work on mobile phones or e-mail programs such as Microsoft Outlook, and they want to show their advertising clients which campaigns are working most effectively. Reiser, a software engineer who set up his company in 2011, says fingerprinting allows him to identify 98 per cent of Internet users, although he is trying to identify users those have opted in to receive a company's e-mails. "We have data on at least tens of millions of people," he says.

Reiser understands some users will see the practice as a violation of privacy, but feels he is one of the good guys. "There is a pretty fine line between cool and creepy. And for anything that I think is really great technology I can guarantee there is someone out there who thinks it's horrible and we shouldn't do it. I think the tracking, in and of itself, is not good or bad. Really, it's what the intent is. My philosophy is that if you can make content more relevant, make advertising more relevant it becomes less like spam and more like content."

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The head of online advertising for a major company said the decay of cookies over time, the growth of mobile phones and different kinds of portable devices and Apple's default settings all make fingerprinting the key for future online advertising. Yet he knows that embracing fingerprinting in public could potentially damage his company's reputation, so he asked that neither he nor his firm be identified.

"At the end of the day, there isn't really a legal case against it, there isn't really a privacy case against it. It's really a PR thing. What are you going to do when the Wall Street Journal decides to write a nasty article about the practice?" he says. "If you don't want anybody to know anything you've done online, don't go online. If you are going to create murder, don't research your weapons on Google."