• by Steve Minichini , April 19, 2011

Senators Kerry and McCain recently unveiled legislation, "The Commercial Privacy Bill of Rights Act of 2011," is the latest attempt to strike a balance between protecting Americans' privacy online while fostering the continued growth of our economy and, specifically, of the online advertising and marketing industry. That's no small task, as consumers' and companies' -- indeed, the world's -- reliance upon the Internet and computers for communication increases. One of the most pressing issues to be tackled is the act of behavioral targeting, or BT, as it is called in the business. To many, the use of BT by marketers and others threatens a basic principle Americans hold dear: the right to privacy.

The Kerry-McCain bill proposes a limit on marketers' ability to collect and share information about consumers without distinguishing between the type of information being collected: personally identifiable information (PII) or non-personally identifiable information (non-PII). That is a problem. Making a blanket statement about what is considered "private" data can be crushing to the industry and our economy. The reality is that not all tracking poses a serious problem for consumers.

Cookies, one of the most common devices used by marketers to track consumer behavior, collect non-PII data, or details that are not specific to an individual. Doing so helps to elevate information received by consumers without sharing data that can identify the consumer personally. BT also improves user experiences by providing relevant advertising to consumers as they surf the Web, ensuring that users only receive messages they are open to receiving.

It is no wonder why engagement rates --- a measure of responsiveness on the Web -- for behaviorally targeted ads are 50% higher than for non-behaviorally targeted ads.

The consequence of removing marketers' ability to target would be a dramatically changed user experience. Ads that do not offer a way to measure success are of less value to marketers. Without BT of non-PII, publishers would have little choice but to start charging for their content. After all, the ability to track users, based on information collected from cookies is what helped the Internet grow so quickly.

The "Commercial Privacy Bill of Rights Act of 2011" would allow users the ability to opt out of sharing personal information. Those who do so would still receive ads, but the ads would be generic and/or based on the content of the page a user is viewing. Free Web content and inexpensive apps will be a thing of the past. The entire model will shift.

Consumers and lawmakers need to be educated about PII and non-PII, as well as the tradeoffs marketers make in choosing to track one type of information over the other. Also, the actions publishers may have to take to stay in business (i.e., membership fees, etc.) if they are no longer able to track consumer behavior, so that consumers understand the implications of opting out.

We advocate that every online property that collects data via non- PII BT must have a clearly identified area of the site dedicated to consumer opt-out, though opt-out should be the consumers' preference and not pre-set. However, any use of PII data should be pre-set as opt-out and, before using any PII data, marketers must seek permission.

This is a monumental shift in providing consumers with transparency, and doing it in a clear, meaningful, prominent and uniform manner. Engaging consumers that have a high intent to act -- which is what BT allows us to do -- is at the heart of every consumer need and every successful advertising campaign.

BT marketing is crucial to the growth of advertising and marketing. To eliminate it completely would not only harm advertisers' ability to communicate effectively to consumers, but also rob prospective consumers of a more relevant and user friendly Web surfing experience.