Contextual ads target a particular group of people with a common interest, and bank on the similarities within the target group. Behavioral ads are targeted by using the historical data collected while the user views multiple pieces of content. Companies that employ behavioral advertisements collect data from various sources and preferences of a user ---on average several hundred times a month -- and use that information to tailor the offering to an individual user viewing the content. This is where users concern about privacy violation comes in.
There is no question that available information can be abused. On the other hand, users may not want some of their Internet activity associated with their profile. They may look for advice for their real-life problems or diseases without wanting to expose themselves, or having that information being associated with their profile (which may contain unique information identifying them).
At the end of the day, the issue comes down to the mission, values and reputation of the company running the campaigns. A company collecting data and using it to provide a better user experience for its users, is much different from a company purchasing profile data from other places and using it to exploit or trick users. "Find [something] in [your city], [state]" is the most common example of deceiving people into registering for questionable services.
Unfortunately, there is no silver bullet for the problem. The Internet went through the same process when companies began to require an email address in order to register for, well, pretty much anything online. Volumes of spam increased exponentially, and it took years for ESPs to devise sound, anti-spam solutions. However, it required users also to make a responsible decision about which services were reputable enough, and to provide their personal information. Behavior targeting, if proven successful, will have to go through a similar trial-and-error process before it matures. We can only hope that the cycle will be quicker, as companies and users alike are more educated regarding online operations than they were 10 years ago.
So the marketing expansion can't (and based upon marketing survey responses, shouldn't) be stopped. However, with all the data available for consumption, there are steps that must be taken to maintain a necessary privacy level for concerned consumers, and a lot of major companies are taking steps toward implementing those policies. AOL, for example, lets users opt out of some targeted advertisements; Google lets users edit the search histories that are linked to their profiles; Microsoft says it does not link any of its visitors' behavior to their user names, even if those people are registered; and Mozilla released a proposed "Do Not Track" header to provide users with a deeper understanding of, and control over, the flow of personal information online.
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