• by Laurie Sullivan , Staff Writer @lauriesullivan, May 12, 2010

How will behavioral ad targeting work in the long term? First-party ad targeting will have full disclosure on Web sites. Third-party targeting, ad targeting across multiple Web sites, should require disclosure in the ad. In absence of that disclosure, an opt-in feature, instead of opt-out, should appear on sites. This means the consumer would have to opt in to targeting. This scenario comes courtesy of Russell Glass, chief executive officer at Bizo, a business to business audience-targeting platform and advertising network.

Glass adds that if government lawmakers really want to make a difference in protecting consumer privacy, they should consider going after offline advertising practices first to quell the really invasive stuff. Lawmakers also should support online targeting with laws that codify self-regulatory principles around disclosure and anonymity of the user, but don't harm the return on investment or efficiency of online campaigns. And finally, educate consumers on what online targeting exactly means, how to opt out, and explain why online targeting is not that scary.

For every ad that gets served online, Glass tells me that the industry has already agreed on full disclosure. You will see the icon the IAB proposed. Consumers will click on it to see who's targeting them and why and what information was in the cookie; they'll also be able to opt out. Similar to television, radio and print ads with legal disclaimers, online ads will have them, too.

The advertising industry has spent months defending ad targeting based on behavior. Members are working hard to self-regulate the industry. Helping with efforts, Unsubcentral launched a tool, PreferenceCentral, that gives people control over the ads they see online.

The disruption by those who continue to fight against ad targeting hasn't stopped venture capitalist from funding companies like Demdex, which captures behavioral data on behalf of Web sites and advertisers, storing it in behavioral data bank. The New York company announced it has secured $6 million of Series A funding led by Shasta Ventures. The round also includes investments from existing investors First Round Capital and Genacast Ventures, a venture fund affiliated with Comcast Interactive Capital.

On Tuesday, Bizo introduced an enhanced Anaylze tool to include a new feature, Site Indexing. This feature lets advertisers and marketers find out, for free, if their Web sites attract a targeted audience, and determine how the Web site's traffic, by demographic, measures up to others.