• by Steve Smith , Staff Writer @popeyesm, June 26, 2009

When we started the OMMA Behavioral shows two years ago, privacy was still regarded as an unwanted, if necessary, topic. The arguments were predictable ("We don't collect personally identifiable information -- next question"), and most people in the industry felt it was an issue that engaged only consumer advocates and journalists, anyway. Frankly, the privacy panels often cleared the room of attendees, who used that time as a chance to take an extended break.

In the last year, this situation has changed. The privacy panels are among the best-attended and the most exciting, both at OMMA Global super-shows and at the one-day OMMA Behavioral event. Our own ace regulatory reporter Wendy Davis keeps everyone's feet to the fire, and both the FTC and industry groups are arguing over more specific policy proposals and regulatory threats.

On July 30 in San Francisco, Wendy takes the lead again in a panel that will drill into a specific prospect for behavioral targeting: requiring consumers to opt into behavioral tracking and ad targeting systems. Can the ad and online content industries really survive if both must lure consumers into the digital targeting ecosystem? In speaking to some of the panelists in advance, I already know that this discussion is not going to engage opt-in/opt-out as an either/or proposition. Leaders in the privacy field and among the technology providers are starting to think harder about sophisticated alternatives.

The news regarding online privacy has been pouring in hot and heavy in just the last few days, so I think it's worthwhile to marshal the principal issues at hand as we move towards out own exploration of the issue next month.

To wit, it looks as if the opt-in model is going to get aired and tested legislatively soon. According to All Things D columnist Peter Kafka, Simulmedia CEO and behavioral targeting veteran Dave Morgan told a conference this week that Rep. Rich Boucher is drafting legislation to require a consumer opt-in before a publisher can serve up a third-party cookie.

Whatever the fate of this legislation, and the inevitable industry counterpoint that it would kill Internet content, Congress is responding to a real problem that digital media have not come close to solving: communications with consumers. According to a survey from Consumer Reports last fall, 61% of consumers believe that their online activities are private and are not shared without their permission. And 57% believe that companies must identify themselves and explain why they are collecting data (when they do) and with whom they are sharing. The disconnect between what consumers believe is going on online and the common practices of publishers and ad networks seems to be emerging as a key point for the debate. As we have seen here in recent columns, researchers are working hard at bringing to the surface for consumers the invisible web of connections among providers and their tracking technologies.

In fact, elements of the online marketing world will themselves be helping to surface this web of affiliations, according to a report today in the Wall Street Journal. The American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association and the Interactive Advertising Bureau are behind a new program that would put an icon on Web sites and on ads to alert users their online activities are being tracked. The icon would then let the user see the companies with whom the data is being shared and have the chance to opt out. Publishers could design their Web sites in ways that promote the privacy icon, thus taking a more pro-active role in exposing their affiliations.

A rudimentary example of this approach is available already in the Ghostery browser add-on. This Firefox addition detects when Web bug scripts are present on a page. When clicked, the alert pops up a list of providers identified in the bugs.

Until recently the opt-out model has been difficult to defend, if only because sites and advertisers couldn't seem to find a reasonable way of informing consumers they were being tracked and even had anything to opt out from. Combining opt-out with a tangible mode of communicating with consumers seems to go farther than previous efforts. We may even see this proposed model in the wild by the time OMMA Behavioral convenes.

Finally, the most important event this week surrounding privacy was the Subcommittee on Commerce, Trade and Consumer Protection hearing yesterday in Washington. Representatives from Google, Yahoo and Facebook all testified. The full statements of participants and the subcommittee Chairs are available online, along with video streams featuring the full testimony and a Q&A. The Congressmen were especially interested in what opt-out actually meant to major portals like Google and Yahoo, and whether this removed the data from use or just from ad targeting. The guts of the Q&A occurs in the middle of the second stream available at the site.

We will engage these issue at length in San Francisco, and I would urge our readers to send us questions they would like to see addressed in the privacy panel at OMMA Behavioral.

What is most obvious in just the last few days is how much the discussion of BT and privacy has moved forward. We now have some viable models to discuss and tinker with, whether it is the Google Ad Preferences site or the upcoming Web site privacy alert icon. The participants have gotten well beyond the "No PII - argument over" lament, and are now starting to address nuance -- for example, how opt-ins and opt-outs are constructed fairly and unfairly. How information has to be tied to the process of managing privacy. How the onus must be on publishers and advertisers, not consumers, to open the topic and create reasonable ways to discuss it.

Finally, it seems, the serious discussion has begun.