AOL’s Got Your Numbers (Should You Be Allowed to Use Them?), Part 2

My last column discussed the wealth of customer data — self-reported, observed, and transactional — AOL captures. It noted recent statements in the press indicate AOL may be considering sharing customer data with advertisers. I asked readers for their feedback on the potential use of this customer data to deliver highly targeted advertising to AOL members. I wanted to know if, as marketers, you found the use of such information ethical, legal, or useful. I also wanted to know if, as consumers, you found the use of such information annoying, intrusive, or an invasion of privacy. Thanks to all who responded. If you haven’t read the feedback, I encourage you to do so.

I called AOL and connected with spokesperson Andrew Weinstein. Andrew made it clear he couldn’t comment on what may or may not happen in the future with respect to the use of customer data, but he was happy to discuss the company’s current privacy policy and available advertising vehicles.

A number of readers found the targeted advertising concepts presented in the first column, particularly targeting based on observed data, an invasion of privacy. They said they would be very concerned if AOL were to begin targeting adverting based on observed data. Presently, you have nothing to worry about. The column was intended to foster discussion on the potential use of customer data collected by AOL. AOL’s current privacy policy does not allow for the use of observed data (or navigational data, as AOL calls it) for targeted advertising purposes.

This a big negative for those marketers who said they would line up to make targeted advertising buys from AOL.

The existing AOL privacy policy with respect to navigational data reads as follows:

We do not use any information about where you personally go on AOL or the Web, and we do not give it out to others. Our system automatically gathers information about the areas you visit on our service. We do not use any of this navigational data about where you
— as an individual member — go on the service. Nor do we share any of this data with outside companies. We do use navigational information in the aggregate to understand how our members as a group use the service so that we can make AOL better. We may also share this statistical information with our partners or other outside companies, but in doing so, we don’t disclose individual names or personal navigational information. We do not keep track of where you go on the World Wide Web.

On the topic of why AOL does not use navigational information to deliver targeted advertising, Weinstein said, “AOL is a premium service that offers a premium level of privacy to our members. Restricting the use of navigational information is consistent with the premium level of privacy our members expect.” He’s obviously been asked this question before. I respect the answer. It appears the concept of Big Brother watching does not fit the image AOL is trying to foster.

Weinstein was quick to point out AOL offers advertisers the ability to target messages based on multiple self-reported data points, including (but not limited to) speed of connectivity and geographic location. Additionally, AOL utilizes transaction data from purchases made directly from AOL (AOL store merchandise, such as computer hardware and software, and AOL-branded products purchased online or through telemarketing, mail order, or other marketing operations) to make ongoing offers directly from AOL to members. AOL does not utilize data captured when members make purchases from other online retailers. The privacy policy states:

We use information such as the number of purchases members make and the categories of goods and services they buy to make offers to you that we believe will interest you. In addition, we use other information such as when members joined AOL, how often they use the service, or their type of computer system to make such offers. We also use publicly available consumer data to help us decide which marketing offers to make and which advertising they see.

That last sentence is interesting. When I asked Weinstein about the use of “publicly available consumer data,” he confirmed the AOL privacy policy does allow AOL to target the delivery of online advertising based on consumer information acquired from public sources.

As an illustration, AOL could use public information purchased from a company such as Experian to assign a demographic score to each subscriber. This information could then be used to sell a targeted advertising package to a company such as General Motors. The demographic indicator could be used to determine online ads received by each subscriber. Subscribers with scores representing higher levels of affluence would receive ads for luxury vehicles (e.g., Cadillac), while people with lower scores would receive ads for more economical vehicles (e.g., Saturn).

Note AOL would never provide General Motors direct access to customer information. AOL scores the database with Experian’s assistance and delivers the targeted online advertising directly to members. General Motors only knows the targeting criteria and aggregate number of impressions delivered against each targeted base of subscribers.

Though Weinstein confirmed the above scenario was possible, he noted it was unusual. “A majority of AOL’s advertising is contextual advertising. Advertising that reaches AOL members [is] based on the content the AOL member is accessing,” he explained. As an example, Budweiser purchases advertising adjacent to Major League Baseball content because it knows baseball fans are likely to be beer drinkers.

I’m wondering why more advertisers don’t make use of public data targeting capabilities. It would seem a savvy direct marketer with experience targeting messages based on pubic data would be able to turn a nice profit partnering with AOL. Perhaps some of you have? If so, I’d be interested in learning about it.

Those of you who vented feelings of frustration about the amount of advertising you receive from AOL, especially pop-ups, will be glad to learn there are control features. AOL members have the option of not receiving marketing offers from AOL by U.S. mail, telephone, email, and, yes, even pop-ups. You can choose to have your name and address removed from any mailing lists AOL provides to other companies. Go to keyword “marketing preferences” and follow the instructions.

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