• by Kate Kaye , December 30, 2005

I'm not one for predictions, year-end or otherwise. In fact, a favorite comic strip character of mine, Rat of "Pearls Before Swine," mirrored my sentiments when he got a gig writing horoscopes recently. In his message to Capricorns, the misanthropic cartoon rodent prognosticated, "You are dumb. Nothing will change that fact." Writing to Geminis, he foretold, "Despite your frantic arm-flapping, you will not fly."

Sure, defeatism like this will get us nowhere. Though sometimes I think the interactive ad industry could use a healthy dose of skepticism, especially in the midst of pundits lost in the hype over the latest and greatest. Behavioral targeting is inarguably in the hype hot-seat right now. Whether it's solid investor interest (venture capitalists just plunked down $24 million in Revenue Science's latest funding round), buzz about endemic ad inventory for automotive brands dwindling, talk of skyrocketing publisher interest (Tacoda has been touting hundreds of new network participants), or evidence of behavioral data complementing search and other popular forms of targeting, it looks as though the stars are aligning in favor of behavioral.

Bully for behavioral. Still, I hesitate to make some grandiose statement about how behavioral will absitively, posolutely, thrive in '06 and beyond. The reality is that the very thing behavioral targeting needs to gain acceptance in the long-run could topple it if the industry isn't careful. That's transparency.

In order for advertisers to embrace behavioral networks, publishers need to come out of the closet, and allow networks to proclaim their participation. Yes, this year networks have begun to reveal their site partners, and this will need to continue, at least if brand advertisers are to take behavioral seriously.

But what about transparency when it comes to consumers? Herein lies the tricky part. We know so-called consumer advocates preach fear of cookies. But, with the support of tech-savvy organizations like Safecount and AttentionTrust, we're beginning to see consumers display a sophisticated understanding, not only of the benefits of cookies, but of the value of their data. Publishers, too, are recognizing that data gleaned on their sites have the power to drive both ad revenue and data revenue. So, what's to stop consumers from demanding compensation for the data that is, after all, derived from them?

As behavioral targeting proliferates, companies with software installed on users' computers may very well take Claria's lead by going behavioral. Rumor has it that Viewpoint need only flip a switch to enable behavioral ad targeting to consumers who have downloaded its player. Would it be surprising if some form of behavioral ad targeting were enabled in, say, Macromedia's Flash player, or any of the array of free players and software products users have installed over the years?

When and if that time comes, the industry appears to be smart enough to request explicit permission from users when enabling behavioral tracking and ad targeting through those products. However, such notification will only help to push such tracking to the forefront of consumers' minds. That is likely to propel more anti-spyware/adware legislation. Federal lawmakers are already taking cues from statewide laws by proposing the I-Spy Act in the House and the Spyblock Act in the Senate. Our representatives in Congress don't always grasp the nuances of technology, and already, statewide laws that could serve as precedent for federal laws seem to confuse spyware with adware and accepted forms of tracking. Client-side adware firms often claim that opt-in, permission-based behavioral targeting will be the answer to consumer distrust of cookies. But legislators may think differently, especially during a reelection year, when passing seemingly pro-consumer legislation is an uncontroversial way of making it look like they're getting something worthwhile done.

As much as innovative marketers may cling to the "consumer is in control" mantra, they'll have no choice but to try to steer the behavioral targeting discussion if they are to avoid the pitfalls of transparency.