• by Lynn Russo Whylly , November 29, 2007

It’s something like the digital version of a telemarketer pawing through your trash (and then tailing you through the mall and following you around the supermarket) to see if you’re likely to pick up the phone when he calls. So, should consumers be worried that behavioral marketers know too much about them? The Center for Digital Democracy (CDD) thinks so. “The public is unaware that behavioral targeting is going on,” says Jeff Chester, founder and executive director of the CDD. “They’ve not been informed by the industry. The AAAA, ANA and IAB — all of these organizations have failed the public miserably.”

Another industry expert feels the problem stems from media confusion. “It’s critical that data used in marketing not be personally identifiable, but there is a lot of confusion about which advertising is a result of personally identifiable information and which is not,” says Lawrence Allen II, senior vice president of business development and marketing at TACODA, a behavioral targeting solutions and ad network company, which was recently acquired by AOL. “I think we’ve seen that registration was the holy grail, but the reality is, people lie — so observed behavior is more likely to be accurate.”

On the day that the Federal Trade Commission was meeting to discuss the possible implementation of a “do not track” list, the CDD, in conjunction with the U.S. Public Interest Research Group, filed a 74-page supplemental statement as a follow-up to their complaint filed last year, for “inquiry and injunctive relief concerning unfair and deceptive online marketing practices.” These practices include: user targeting/Web analytics, behavioral targeting/re-targeting, audience segmentation, data gathering/mining and industry consolidation.

The supplement, points the finger at a number of what they feel are guilty parties, including Acxiom, Microsoft, WhitePages.com, Yahoo and Google/DoubleClick. 

Acxiom’s new Relevance-X product is one of the latest thorns in Chester’s side. The technology analyzes data in PersonicX, Acxiom’s household-level segmentation system, identifying prospects with the highest purchase or conversion propensity, giving marketers insight to drive customized, relevant advertising messages across its online advertising network based on offline, though non-personally identifiable, information.

“Someone has to step in and limit the merging of online and offline databases and create policies that fully protect consumers of the merging of this information without their awareness or consent,” says Chester. “The whole notion of ‘not personally identifiable’ is a smokescreen. [Companies like] Acxiom understand what we put in our shopping cart and what kind of content we like. They no longer have to know who you are to know you.”