• by Steve Smith , Staff Writer @popeyesm, February 2, 2007

Consumers need to consider how well the online ad industry protects rather than violates their privacy, says SpecificMedia CEO Tim Vanderhook. SpecificMedia targets up to 80 million unique users demographically, contextually and behaviorally across its ad network. Explaining to end users the technical details of cookie placement and anonymous tracking, let alone the B2B relationships among advertisers, networks, and publishers, may not be a cost-effective solution to the privacy debate, he argues. Vanderhook favors "higher level" education of the market through industry-wide coalitions and informing legislators.

Behavioral Insider: Some in the industry warn that increasingly sophisticated targeting will invite some kind of comeuppance or "blow-up" of privacy concerns. Do you think there is a threat of consumer or government backlash as marketers track consumer behavior more closely?

Tim Vanderhook: I think this concern is largely overblown. Although the collection of data and ability to target relevant ads to consumers is easiest through the Internet, it is also the easiest to opt out of, and your anonymity is maintained. I would argue that traditional channels of marketing make it easier for PII and Non-PII to be transferred from one organization to the next, and they are the hardest to opt out of. I recently purchased a new car and took a look at the privacy protections they offer you about your personal data being sold to other organizations, and it was not easy to opt out of at all. The same goes for when a consumer gets a loan. In short, although Specific Media can collect Non-PII easily, consumers remain anonymous and have ultimate opt-out control at the click of a button. That's pretty impressive for a practice that is relatively new.

BI: Does Specific Media do anything specifically to give consumers who encounter its ads some control over opting out of the network?

Vanderhook: Specific Media is a member of the Network Advertising Initiative and gives full control to consumers who are wary of being behaviorally targeted with relevant advertisements. We do our best to ensure consumers have the ability to control their entire online experiences, and we have yet to find a better channel to do that than through the NAI. We do not have a mechanism actually in the advertisement itself being shown to the consumer, due to IAB standard ad formats, but the information can easily be found for any consumer who may have a concern.

BI: Are you doing anything proactively to inform consumers in the network that their behaviors may be tracked?

Vanderhook: This is an extremely tough issue to tackle when you operate as an advertising network. Because we sit in the middle between advertisers and publishers, we do not have the capability to use publisher inventory for purposes of educating consumers about our business. However, that is not to say that we do nothing about it; our publishers' privacy policies indicate their use of third parties in the advertising process, and our privacy policy clearly details the collection and use of information inside of our organization. Again, I can't stress enough about the use of industry self-regulation and the positive impact the NAI can have on consumer education for those who want to learn more about the practice.

BI: Is consumer education about the nature of anonymous tracking, online cookies, and precisely what BT does really necessary? Or is it asking too much for consumers to understand all the ways in which digital media can track and target them?

Vanderhook: My personal observations are that there is a very small percentage of consumers that do have an interest in the practices of BT, but the large majority of online consumers who BT affects the most don't truly understand it. Launching a public awareness campaign of this complex practice is extremely inefficient because of the high costs associated with ad inventory today, and the lack of consumer understanding of online cookies. It is hard enough to get consumers to pay attention to ads in general, let alone complex business-to-business practices. It's more important to raise awareness at a higher level, such as the legislators, or to advance industry self-regulation through coalitions and the pooling of resources. These types of tactics will provide more consumer protection in the long run.

BI: Whether the BT industry itself thinks it is justified, many consumers and even some advertisers still find the way BT works somehow sneaky or creepy. Is it important that BT recognize this sensitivity and address it in an organized way?

Vanderhook: This is already available to members of the NAI and to consumers who are looking for it. I think the industry has come a long way from when it started to address the concerns of privacy advocates. The fact is, when consumers are online they are anonymous to ad networks that track online behavior. Most consumers have been confused by this practice and regard it as sneaky because security companies typically include cookies while scanning for spyware. As far as advertisers go, I have yet to find anyone that refuses to do business with us because of that notion. In fact, most of today's advertisers find it so difficult to reach their target audience cost-effectively, that they feel there is great promise in the future of BT and are looking to understand and explore the possibilities as much as possible.

BI: What is your sense about where politicians are on the issue of privacy in the digital age? Is there a serious threat of legislation on this, or will the industry be encouraged to come up with its own answers?

Vanderhook: It is my hope that the NAI and its members will succeed in helping politicians understand the technology and the consumer protections we have created through self-regulation on our own. I think most politicians today don't have a good grasp of consumer privacy online today, and I don't believe there will be any major legislation about the use of cookies in the near term. I think spyware has been widely understood as the largest privacy concern to consumers online, and the majority of legislative attention will be targeted to that area specifically.

This doesn't mean we can sit back, relax and expect there to be no problems in the future. As an industry, we need to use every channel we can to stress the economic benefits BT provides to advertisers and publishers, while touting the privacy protections in place to safeguard consumers against misuse.