Legislation and 'Do Not Track'

  |  March 2, 2011   |  Comments

How can we as marketers protect our businesses and address privacy concerns? Part two of a three-part series.

In February, the House of Representatives introduced its version of "Do Not Track" legislation, moving the online privacy discussion past the stage of opinion pieces and Twitter debates, and firmly into the legislative realm. As the debate evolves, how can we as marketers protect our businesses and address privacy concerns?

I think we need to start by taking a step back and getting some perspective on the issue, which frankly is advice for marketers, legislators, and consumers – everyone involved in this discussion.

Admittedly, privacy is a huge issue in the new digital world in which we live. Nevertheless, tracking online user behavior through cookies is not the Orwellian nightmare that some describe it as.

First, cookies are not personally identifiable information (PII). Most often, cookies are a randomly generated number or code. They are alphanumeric identifiers that correlate a user's ID to their impressions, clicks, and conversions.

Second, there is a tangible user benefit to using cookies to target ads. When I speak with friends and family who work outside of online marketing, they are mostly aware of the fact that they are seeing ads for a reason. "I visited Zappos, and then saw an ad for the flip-flops I was looking at," a friend mentioned to me yesterday.

Most people I speak with think that seeing an ad for flip-flops they might want to buy is better than seeing an ad for a product they have no interest in, or the same ad again and again for a free credit report or a flat belly.

Is a targeted ad a violation of personal privacy? I'll let a House subcommittee, in all its wisdom, debate that issue. But from the average consumer's point of view, seeing a retargeted ad is no different than ordering something from Lands' End and then getting a Lands' End catalog in the mail a month later.

In fact, targeted online ads have a lot more similarity to direct mail than they do to spam e-mail, which is what many policymakers are comparing behavioral advertising to. Using cookies to target ads is actually the opposite of spam e-mail. Advertisers are trying to make their ads more relevant to consumers and reach the right audience, rather than show ads to people who aren't interested. Isn't that actually – gulp – something to be commended?

Depending on what you believe, perhaps that's going too far. Fair enough. But I would argue that there are many other privacy issues in the world that are far more risky and concerning because they tie together your behavior with your personally identifiable information, but get a tiny fraction of the scrutiny. A few examples:

  • Pharmacies routinely use "patient education" or "patient compliance" programs – industry parlance for promotions that remind patients to refill their prescriptions. That requires access to your medical history.
  • Another one from the retail pharmacy world – Walgreens recently filed for a patent that would place a radio frequency identification (RFID) chip in your loyalty card. Each chip corresponds to display screens in their stores. That correspondence is then correlated with your demographic data. This way, Walgreens can measure data about how long you spend in front of certain displays in their store, all tied to your PII information.
  • Your grocery store loyalty card tracks every single item you purchase, and ties it to your name, address, and demographic information.
  • Facebook arguably has more personal information about you than any other company in the world – your interests, your friends, and your photos – and makes it perfectly clear that it owns all of this information.

You may be saying, "So what? So cookies aren't as bad as a bunch of other things in the marketing universe. That doesn't change the fact that Congress and The Wall Street Journal have put cookies at the front and center of the privacy debate."

Here's how this discussion needs to evolve:

First, publishers need to start the dialogue with consumers about the quid pro quo. Some will argue that this is impossible, and that consumers won't listen or participate. It's not that hard. Publishers need to remove the legalese and tell consumers what's happening on their sites. Here's the message in its purest form (albeit a bit dramatic): "We're telling advertisers a few anonymous things about your age and gender and interests (clicks) so they can target ads to you more effectively. If we don't sell these ads and add this targeting, we'll have to cut 50 percent of our original content, or start charging you to read it. Which would you prefer?"

Next, publishers and advertisers need to be transparent and act responsibly. To make that statement more tangible, the IAB is moving in the right direction with in-ad icons indicating behavioral targeting, and giving consumers the ability to opt out. At my company, we think this conversation can go even further to inform consumers about behavioral targeting and improve the relevance of the ads they see.

In my mind, the legislation is not as important. I'm in the minority on this point, but I don't think legislation will solve the online privacy issue. Regardless of what Congress comes up with, marketers will respond by writing verbose privacy policies that consumers will never read, as they check the "Accept terms and conditions" button on their way to play the newest game on Facebook. Obscuring the details is the opposite of what needs to happen.

For me, this debate feels a little bit like the panic e-mail marketers were in after the CAN-SPAM Act surfaced in 2003. What did that bill do to stop spam? Arguably, nothing. Technology solved spam, not Congress, and I believe the same thing will happen here.

The browser companies – Mozilla, Microsoft, and Google – are the companies who will have the greatest impact on behavioral marketing, and are the best advocates for providing consumers with choice when it comes to online privacy. The market will sort out the right approach here.

By providing consumers a clear reason why and how behavioral marketing is being used, and giving them the ability to opt out with a click in their browser, I believe we can advance this debate much more rapidly and effectively than regulation ever will.

ClickZ Live Chicago Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!

ABOUT THE AUTHOR

Jeff Green

Jeff started his Internet career working for a small interactive agency, where he led media buying and trafficking and managed all vendor relationships. Afterward, he founded a CPA network, eBound Strategies whose technology was designed by Jeff and later acquired by Nami Media in 2003. Jeff worked for Nami Media as the VP of operations, and subsequently left to found AdECN, the first exchange for online advertising.

Jeff is considered one of the few pioneers of the ad exchange. As COO and founder of AdECN, he led all strategy, product, and business development. Jeff is a thought-leader in real-time bidding technology. At Microsoft, Jeff oversaw AdECN exchange business, ran all reseller and channel partner business, as well as advised the all-up strategy for the online services division. In October 2009, Jeff left Microsoft and AdECN to found The Trade Desk.

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Marketing newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

IBM: Social Analytics - The Science Behind Social Media Marketing

IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising
If you're considering implementing a marketing attribution model to measure and optimize your programs, this paper is a great introduction. It also includes real-life tips from marketers who have successfully implemented attribution in their organizations.

Jobs

    • Recent Grads: Customer Service Representative
      Recent Grads: Customer Service Representative (Agora Financial) - BaltimoreAgora Financial, one of the nation's largest independent publishers...
    • Managing Editor
      Managing Editor (Common Sense Publishing) - BaltimoreWE’RE HIRING: WE NEED AN AMAZING EDITOR TO POLISH WORLD-CLASS CONTENT   The Palm...
    • Senior Paid Search & Advertising Manager
      Senior Paid Search & Advertising Manager (Smarty Had A Party) - St. LouisCompany Description: A warm, loving, [slightly wacky] startup, we view...