Waxman V. Rothenberg
This instinct is deep in the subconscious of all of us, too. It is the same reaction that causes you to instinctively lunge when you see a child dangling from a railing and her hand starts to slip. It has been finely tuned over hundreds of thousands of years of evolution, and works extremely well in most circumstances of modern life. Unfortunately, that visceral reaction can occasionally and unintentionally lead us down highly illogical paths.
The current fight about self-regulation of consumer privacy between Representative Henry Waxman (D-California) and the online ad industry is a shining example of when gut instinct can lead to fatal errors.
Make no mistake: we are teetering on the edge of sweeping regulations that will wipe out some questionable companies in our space, and do damage to most others.
We are in this position because our industry leadership is making a classic strategy error: believing that 100 good short-term tactical moves equate to a winning long-term strategy.
Driving Faster Doesn't Help When You're Lost
For the last several years, our industry associations, including the IAB and the NAI, have continued to lash out at all calls for regulation. They have made ridiculous technology arguments, job preservation arguments, and even dumped money into the ironically named NARC.
Perhaps most egregiously, they implied that somehow to not support behavioral targeting was akin to harming the future of "green cars, social investing, or charitable giving." This is appallingly intellectually dishonest, and as accurate as arguing that hating junk mail means you also want to shoot puppies.
To their credit, they largely have been successful (outside of Europe) arguing for "self-regulation." After all, who better to police them than themselves?
Sadly, as the World just learned, self-regulation is a lot like self-rehab.
It Was Colonel Mustard, in the Library, With the Candlestick
Not surprisingly, a recent Stanford report shows systemic abuse of their own policies. The report claims no fewer than eight members of the Network Advertising Initiative violate their own privacy policies.
One company accused in the report is 24/7 Media, a company whose own executive sits on the executive committee of the Internet Advertising Bureau.
If the members and leaders of the industry associations can't comply, just imagine what happens in the dark corners of the Web with advertising firms that think no one is looking.
After all, it should not be hard to comply with a policy that you wrote yourself.
The Waxman Cometh
All of this has caught the attention of Representative Waxman, who has rightly smelled blood in the water. "Self regulation isn't working," he said recently.
The industry efforts to distract, obfuscate, confuse, complicate and otherwise cloud the issue are no longer effective. The IAB and NAI need to stop their ridiculous shell game, and start taking accountability for the actions of their members and for the rest of the industry whom they claimed their self-regulation model would govern.
It has not worked. It will not work.
Make no mistake: significant government regulation is coming. Our leadership's role is to educate the public and bring forth intellectually honest arguments and propose reasonable regulations. These regulations will be beneficial in establishing consumer trust, and will help our industry long-term by eliminating the least ethical among us.
The right strategy is for Rothenberg to step up, hat in hand, and acknowledge that we wasted four years and a lot of credibility beating the drum of self-regulation. He needs to admit that cheap propaganda like his 2008 HuffPo piece where he said "behavioral marketing... uses consumers' own choices to provide them more choices," rings hollow when his member companies are not honoring the most basic choice of consumers: not to be tracked in the first place.
Then, and only then, can he be a trusted partner at the table to guide the creation of a reasonable set of government regulations that balance the needs of consumers and advertisers.
Or, he can continue to chase his instinct; fighting a hopeless fight, surrounded by a growing set of statistics that don't support his argument.
As John Adams once said, "facts are stubborn things."
David Koretz (Twitter: @dkoretz) is the Chairman of Adventive.