Privacy and Behavioral Targeting Heat Up

  |  July 9, 2008   |  Comments

There's already a thin line between a consumer's right to privacy and a publisher's desire to serve up only relevant advertising. Now that line is becoming even harder to discern and define.

The past few weeks have been eventful for behavioral targeting and the issue of privacy. It seems the more complex behavioral targeting solutions become, the more problematic they are. Once the ISPs got into the behavioral targeting equation, privacy concerns leaped to an all-time high.

Some background: At ad:tech New York, NebuAd announced a new behavioral targeting network that partners with ISPs. From NebuAd's press release: "Through its unique technology, industry expertise, and Internet Service Provider (ISP) partnerships, NebuAd is leading the advertising industry to a new level of targeting effectiveness. Early traction in the network with ISPs, advertisers, and publishers, combined with NebuAd's recent $30 million in total funding announcement, validate NebuAd's potential to transform online advertising."

NebuAd launched with all best intentions, attempting to address the issue of scale with its now huge network -- a major disadvantage for behavioral targeting in most cases. Plus, NebuAd has a robust privacy policy addressing consumer concerns directly.

But last week, two of those ISP partners backed out of the relationship. Charter Communications announced it was withdrawing due to subscriber concerns. CenturyTel is pulling out after the warnings from Reps. Edward Markey, a Massachusetts Democrat, and Joe Barton, a Texas Republican, who said the technology "raises several red flags."

Now NebuAd, its competitors, and the ISPs that would work with them are facing new adversity in the form of a coalition of advocacy groups that contest this new breed of comprehensive behavioral targeting. At least six groups, representing such issues as consumer privacy, media decentralization, and Net neutrality, have banded together to share information, conduct legal analysis, and meet with officials on Capitol Hill.

One solution being discussed by bloggers and columnists is data portability: allowing consumers to be in charge of their own data by opting in (or not) to allow their online behavior and profiles to be tracked. Consumers take their data availability with them, so to speak.

Another solution, which I covered in earlier columns, is predictive modeling to better target behavior. Companies such as aCerno and Epic Advertising use advanced algorithms and technologies that don't rely on cookies to establish inferred behavior, which is less intrusive and far more predictive of future behavior, according to these suppliers.

And at the end of the day, who should be the police? The Interactive Advertising Bureau (IAB) says we should self-regulate, and it's preparing to strengthen its self-regulatory function. As its CEO attends congressional hearings and its Washington, DC, office adds a new attorney, the IAB is determining how best to enforce standards for protecting consumer privacy and other guidelines. The group also aims to enlist a group of small publishers to maintain a presence at the state level. It's all part of an ongoing effort to ward off unwanted government regulation.

The FTC has taken a position and made recommendations with its proposed online behavioral advertising privacy principles. According to its proposal, "Online Behavioral Advertising: Moving the Discussion Forward to Possible Self-Regulatory Principles":

    The purpose of this proposal is to encourage more meaningful and enforceable self-regulation to address the privacy concerns raised with respect to behavioral advertising. In developing the principles, FTC staff was mindful of the need to maintain vigorous competition in online advertising as well as the importance of accommodating the wide variety of business models that exist in this area.

The proposal states that behavioral advertising provides benefits to consumers in the form of free content and personalized advertising, but notes that this practice is largely invisible and unknown to consumers. Are these recommendations really addressing consumer needs as they relate to new practices and technologies?

There's already a thin line between a consumer's right to privacy and a publisher's desire to serve up only relevant advertising. Now that line is becoming even harder to discern and define. As both the technology and the partnership arrangements get more complex, the privacy issue will continue to heat up in upcoming months.

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Elyse Tager Elyse Tager is founder and principal of Elymedia, an online and traditional media agency that has worked with many of the world's most recognizable brands, from Microsoft to PowerBar. With 20 years of executive marketing experience in direct response and 10 years of Internet marketing experience, Elyse has gained a thorough understanding of both types of media and how they interact. This depth of experience and knowledge has benefited her clients as they strategize marketing objectives in both on- and offline worlds.

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