Is behavioral targeting a privacy threat?

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Regulators and industry groups have been looking carefully at the regulation behind the practice of tracking consumer behavior online to better ensure consumers' privacy.

Rip Warendorf
SVP of worldwide sales, Zango
Nearly 20 years of sales and digital media experience

Consumers want, and indeed expect and deserve, a free, easy-to-use, meaningful Internet experience. And while I don't believe that online consumers feel threatened by behav­ioral targeting, its practitioners could go a long way toward removing any remaining misconceptions by providing additional opportunities for consumer choice, consent and control.

The truth is that effective ad targeting, whether behavioral, contextual or other, benefits all of the Internet's constituents, including consumers. The Web enables consumers to receive highly relevant, targeted ads, instead of scattershot results delivered by other media. Rele­vant ads provide a service to consumers and real ROI to advertisers.

To allay any privacy concerns, behavioral targeters would do well to use plain language disclosure to help the consumer understand exactly what is on and happening on their computer, and presenting consumers with infor­mation and choice in an easily under­stood disclosure describing the value proposition is the first step. Providing as much information as possible is next. For example, marketers can provide a full end user licensing agreement, uninstall instructions, links to more information and a privacy policy.

Consumers already have filtering options built into their browsers. So present them with the full value propo­sition and let them choose.

Andrew Smith
Partner in Morrison & Foerster's Washing­ton, DC office
Former FACT Act program manager at the FTC

Government regulation around behavioral targeting is still in its early stages. The Federal Trade Commission proposed a number of self-regulatory principles in December 2007 which aim to address some of the consumer discomfort that has arisen from behavioral tracking and other online activities that may put consumer information at risk.

The FTC has a broad authority to regulate deceptive practices as well as unfairness. While deception is pretty easy to understand, unfairness is a much broader concept and the one that might be applied to online behavioral targeting, but only under certain condi­tions. Apractice can be ruled unfair if it injures consumers, is unavoidable by consumers and if the cost is not outweighed by benefit.

For marketers, the key issue is whether or not there is a real measur­able injury to consumers based on the information that is collected. Site visitation behavior, which is not linked to a name or address, but only an IP address, would be difficult to use to harm a consumer. In fact, in these cases it's used to try to more appropriately target the future buyer as a benefit to the consumer.

Certainly the collection of data needs to be monitored, particularly if they can be linked to sensitive information. It's important for marketers to be very clear on safeguarding identifiable data.

DMNews' decision
The benefits of behavioral targeting are clear: Relevant advertising for consumers and more data to segment for online marketers. However, as consumers become more accustomed to opt-in marketing, they expect more control over where and how their data is collected and used. Market­ers should be aware of industry guidelines and clear on safety measures.

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