• by Kaila Colbin , Featured Contributor, March 28, 2008

If it manages to pass into law, the net effect of New York state Assemblyman Richard Brodsky's bill -- which mandates that the likes of Yahoo, Google and Microsoft provide the ability to opt out from tracking -- is likely to be minimal.

First, as any email marketer can tell you, the difference between opting out and opting in is a couple million subscribers or so.

Second, and notwithstanding blogger-supported privacy activism, Web users are remarkably indifferent to privacy concerns. Oh, they say they care, but their actions frequently prove otherwise. Consider the experience of Dave Morgan, formerly executive vice president of global advertising strategy at AOL (which bought Morgan's company TACODA mid-last year):

Early on, when we were first developing behavioral targeting at TACODA, we knew that tracking cookies had the potential to make some folks uncomfortable... We launched an aggressive opt-out program for those who didn't want our cookies on their browsers. Interestingly, over the year, even thought we launched program after higher profile program to promote the opt-out, only a relatively few folks ever chose to do so. While lots of studies claimed folks were deleting cookies that enabled highly targeted advertising, they never did it in sufficient numbers to hurt our business. Why? They liked the ability to customize their portal pages and not have to reenter passwords every time they went to a site that had earlier required registration or a dozen other shortcuts made possible by cookies. Consumers understand that they have gotten something of a free content lunch for over a decade and have said in lots of studies that they'd rather see ads than pay for online content.

Third, there's a big chunk of our population that has no idea what we're talking about, and which will remain clueless no matter how big you make the opt-out notice. I don't know the exact size of this group, but at a minimum it contains the 24% of users that can't even find Google.

Fourth, in defiance of the slightly hysterical claims by IAB lobbyist Mike Zaneis ("If you take the fuel out of this engine, you begin to see the free services and content dry up"), advertising can't leave the Internet: that's where consumers are.

Fifth, there are benefits to personalization -- think Amazon recommendations -- that people don't want to lose.

Sixth, the bill wouldn't achieve the objective, which seems to be education. Brodsky says he's got no "philosophical objection to targeting, if it's done with permission." The problem, rather, is that "people right now do not understand what they're actually giving up." But even with opt-out notices, people would have to invest significant time and effort (something they're unlikely to do) to really grasp the implications of online personal data and make an informed decision.

You might guess from the above that I'm opposed to this sort of privacy regulation; you'd be wrong. On the contrary, I'm a staunch right-to-privacy advocate. And Brodsky's hope for "a compromise position that enables many ad practices but enhances consumer protection" is admirable.

What I'd like to see, though, are proposals that incent the right behavior and discourage the wrong behavior. The discussion needs to consider the ability to opt out and the ability to manage personal history and data security standards and the benefits of personalization and behavior tracking. It has to address more than the tech-savvy elite.

This bill, unfortunately, sounds more like a job-creation package for developers. Back to the drawing board, Brodsky.