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The behavioral targeting firm NebuAd is the latest company to fall victim to the storm of bad press and intense congressional focus surrounding the field of behavioral targeting. Pete Kafka summarizes this development in the AllThingsDigital blog succinctly: "there's a very big gap between the way the ad industry views this stuff and the way politicians and average Americans do." He predicts that this gap is going to trip up a lot of big players in the years to come.
Indeed, behavioral targeting has downsides for both consumers and advertisers.
Consumers have every reason to be skeptical of behavioral targeting. Being followed by tracking technologies as they move around the Internet sounds at the worst of times Orwellian and at the best of times Orwellian.
The proponents of behavioral targeting have indulged in a variety of "education" programs that point out that BT campaigns track consumers anonymously, and great care is taken to ensure that the consumer is not personally identified. This argument has largely failed to impress skeptics such as Congressman Rick Boucher (D-Va.), the chairman of the House Subcommittee on Communications, Technology, who has asked search and network companies that gather personal information to outline:
>> What sort of information they're looking to obtain
>> What they intend to do with users' data and
>> How they are going to provide clear ways of opting out
These are all valid points. Consumers should have a clear way of opting in and out of messages they would like to see. They should be able to make the decision. Think about it. Would you be comfortable as a consumer to allow a third party such as an advertiser decide what's "good" or "relevant" for you?
What's bad for the consumer is bad for the advertiser. Optimally, advertisers want to be speaking to consumers who are genuinely and willingly engaged with their brand.
As an advertiser, would you want to spend ad dollars on following consumers secretly around the Internet, or would you much rather spend your budget on consumers who have explicitly raised their hand and said: "Yes, I am interested in hearing from you" (or words to that effect). Engaging consumers who have a high intent to buy, register (or take a desired action) is at the crux of a successful advertising campaign.
It's not rocket science. Advertising frequently aims to create a strong relationship between a consumer and a brand. And just as in any relationship, transparency and openness are key to fostering trust. A system built around explicit opt-ins and opt-outs is fair to the consumer. The advertiser also benefits by paying only for interactions with people who have high intent -- to participate in a conversation, become brand advocates or simply buy the product.
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Unfortunately, I think that the source of the commentary has to be a consideration in its position, (I am in the BT exchange business, so my bias is clear) and in this case it is pretty self serving to slam the BT business implicitly in favor of a model that you are promoting -- which is opt in, for sure, but provides no opt-out, or assurances that my lead will ONLY be used for the exact pitch you are selling.
I started my marketing career in the catalog business 15 years ago and know very well how PII consumer data is used . . . and where "leads" end up.
It's good to keep dialogue alive --because if as an industry we don't unify around consistent consumer friendly policies we are all doomed. Congress' attention span is short -- they will be after the lead gen guys next!
In my mind there are far simpler and more visible reasons why Behavioral Targeting is Bad for Consumers and Advertisers:
Behavioral Targeting Is Bad for Consumers because the decision RE: which ad to show is based on something done in the past (often times weeks in the past) = not relevant to what the consumer is doing right now.
Behavioral Targeting Is Bad for Advertisers because ad selection is ALWAYS an economic decision. Consumers almost always fit into more than one sell-able category (auto, financial, music, etc.) - BT Ad Networks serve the ad that pays THEM the most I.E. the insurance company ad pays $20 CPM but the record label ad only pays $4 CPM rather than what ad is most relevant for the consumer = if the consumer is seeing a relevant ad the advertiser is happy.
Then there're all the legal issues / privacy concerns ...
In response to Josh's comments about there being no opting out of TV ads, radio spots or billboards, that is in the main true (if you don't use the remote on the TV).
However, there is a huge difference. The billboard hasn't been tracking what you were doing in the office, what banking website you transact on, where you were planning your next holiday, what credit card you have, what was in your GMail at your home email address ... the list is endless ... and then stitching it all together to get a pretty broad picture of your life.
It makes you stop and think twice (well it should) before you type in your area code to "find your closest" store", or enter your street address into Google Maps to see if your home is on StreetView ... because it's now out there in cyberspace.
The industry always likes to talk about the benefit to the consumer as more targeted ads. I would argue this isn't the benefit. The benefits are the many amazing products and services that are supported by advertisng and free to the consumer.
If we choose to make the MANY forms of marketing opt-in, you would completely change the ecosystem and the consumer would ultimately have to pay (one way or another).
The title of your piece is provocative and i'm sure will illicit many repsonses. It's also niave and short-sighted. It reminds me of a comment that would come from a bunny-hugger claiming that "all corporations are evil".
I am suprised that such a commentary would be delivered from someone whose company is in the business of trading user PII information -- a much scarier proposition to most consumers, who still have little understanding of what really happens to their info once it enters a "lead" form.
Much of the bad rap that BT gets from the general public is due to the fact that it is lumped in with many of the poor practices performed by less than upfront lead gen companies. I am not including your company with any of those guys, but their negative mark on the online ad business has been indelible.
BT plays an important role in the online ad ecosystem while avoiding such PII not only because it creates numerous consumer concerns, but also it is generally irrelevant for the bulk of both on ad offline advertising that is out there whose goal is to create initial awareness, brand support and interaction.
Groups like the NAI are working hard to communicate the benefits of better targeted information, while driving transparency and promoting user choice. And companies like eXelate are offering consumers full transparency on the data we have collected and giving consumers a central opt-out for all BT activity. (see http://www.exelate.com/new/consumers-optoutpreferencemanager.html)
Can PII lead comapnies offer that? Where can I see my lead info?
We all live in this online ad glass house. Bad time to throw stones.
Mark Zagorski CRO eXelate
Doesn't every other media channel make the decision for the consumer? There is no opting out or decision not to watch a TV ad, hear a radio spot or see a billboard.
Also, if we only served advertising to consumers who "explicitly raised their hand and said: 'Yes, I am interested in hearing from you' (or words to that effect)", there would be A LOT less advertising and A LOT fewer of us working in the industry. How many people do you know would say yes to advertising if they had a choice?
I agree that transparency and openness are important, especially with behavioral targeting. But if we aren't gathering vital personal data of users, rather just their online behavior, I still don't see how that is a violation of their rights.