Behavioral Targeters Get a Warning from Washington.
Behavioral and other forms of targeting are on every marketer’s radar these days, especially as tough economic times demand greater efficiency. What is the promise and risks of targeting online? Are there special ethical considerations for sustainable brand marketers? What practical steps should sustainable brand marketers take to ensure best practices and get in front of coming regulation from Washington?
Those are questions that won't be answered in one blog post, but what's clear is that online marketers who don't manage privacy concerns are taking greater risks today as Washington is giving clear signals it will assert its regulatory authority in this area.
Privacy is not a new issue and the focus on behavioral targeting has been building for the last year. When the startup NebuAd, which teamed up with ISPs to perform "deep packet" data analysis, unveiled its behavioral targeting platform at the end of 07, the company probably had no idea of the type of backlash it would receive from privacy and consumer advocates.
Some on Madison Avenue are still befuddled why people would object to attempts to improve the relevancy of advertising, and such targeting is "anonymous", but privacy watchdogs are sounding alarms that tracking and targeting amounts to a form of surveillance. They say that even when it is supposedly anonymous, it invades and diminishes the individual.
Into the debate steps Washington. The Federal Trade Commission recently has put the advertising industry on notice: either implement stronger privacy protections when it comes to behavioral targeting or we will do it for you. In the FTC’s Staff Report on Behavioral Advertising released in February ‘09, the Commission includes a set of principles. Although these are currently, "non-binding", because they are likely to form the basis for the impending regulatory framework and enforcement, prudent marketers should understand the lines that are being drawn.
Jon Leibowitz, who was named by President Obama to be
the Federal Trade Commission's New Chairman has stated he believes the
online industry
is not adequately
protecting consumer privacy because they don't clearly tell what they
collect and do with consumer information.
Representative Rick Boucher, the new chairman of the House
Subcommittee on Consumer Protection, also announced that he will be
introducing legislation to regulate online privacy. Boucher is on record
that he doesn't believe most online ad companies are complying with the
FTC's non-binding principles.
Leibowitz
and Boucher are not privacy centrists, not
zealots. The industry may not be able to avoid regulation, but it try
to ensure that it is reasonable and practical. It is not enough to say
that just because a company can offer "better"
services by capturing user data, it's not an issue.
So its up to the online marketers, publishers and networks to become proactive on this issue. Companies that aspire to build sustainable brands will be held to particular scrutiny.
Check out this funny but scary spoof video on behavoral targeting from the ACLU:
The FTC Behavioral Targeting Principles Are:
• Transparency and Consumer Control: Every website that uses behavioral targeting should clearly and concisely spell out what they’re doing. The FTC recommends that users be given the simple method to opt-out of the site’s targeting tools.
• Reasonable Security, and Limited Data Retention, for Consumer Data: The FTC document states that “Companies should also retain data only as long as is necessary to fulfill a legitimate business or law enforcement need.” If the FTC decides to take a stronger regulatory hand on this, the question of just how long a site “reasonably” needs to hold on to user info could be a major sticking point.
• Affirmative Express Consent for Material Changes to Existing Privacy Promises: A company must keep its promises that it makes with consumers when it comes to protecting their data. If the company revises its policies on privacy, they must receive users’ consent before implementing the new rules.
• Affirmative Express Consent to (or Prohibition Against) Using Sensitive Data for Behavioral Advertising: If companies want to collect “sensitive” personal data, it must get users’ permission before, not after, it starts collecting.
