Why Behavioral Targeting Is Bad for Consumers and Advertisers
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.