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How do mobile ads leak personal data?

You must understand that with Smartphones, we have so many different types of apps and we usually have fun downloading and installing those apps because they are mostly free of cost. But the reality is that free smartphone apps are not really free. Apps, especially malicious apps can be used to collect potentially sensitive information about someone simply by hosting ads in the app and observing what is received by a user. Mobile, personalized in-app ads absolutely present a new privacy threat.

So we need to understand how these apps work.

Mobile app developers choose to accept in-app ads inside their app. Ad networks pay a fee to app developers in order to show ads and monitor user activity collecting app lists, device models, geo-locations, etc. This aggregate information is made available to help advertisers choose where to place ads.

Advertisers instruct an ad network to show their ads based on topic targeting (such as "Autos & Vehicles"), interest targeting (such as user usage patterns and previous click), and demographic targeting (such as estimated age range).
The ad network displays ads to appropriate mobile app users and receives payment from advertisers for successful views or click by the recipient of the ad.

In-app ads are displayed unencrypted as part of the app's graphical user interface. Therefore, mobile app developers can access the targeted ad content delivered to its own app users and then reverse engineer that data to construct a profile of their app customer.

Unlike advertising on a website page, where personalized ad content is protected from publishers and other third parties by the same origin policy, there is no isolation of personalized ad content from the mobile app developer.

For the smartphone dependent people, who have neither traditional broadband at home nor any other online alternative, their personal information may be particularly at risk.

Further, people use their smartphones now for online dating, banking, and social media every day. Mobile devices are intimate to users, so safeguarding personal information from malicious parties is more important than ever. The safeguarding of personal information can be made more robust by improving the https protocol.