Privacy Still a Concern to Consumers, Behavioral Marketers

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NEW YORK -- While people want ads that are more relevant and know that they must give up more personal information to get them, they still are concerned about the concept of cookies.

This was a key point of a Direct Marketing Association-sponsored panel discussion that took place Sept. 27 during Advertising Week 2006. The five-day event, which hosts the largest gathering of advertising and media decision-makers in North America, includes a diverse mix of keynote speakers, panelists, public exhibitions, conferences, awards shows and special events.

"The concept of getting ads based on your behavior, tracked by a text file was okay, but calling it a cookie was not okay," said Omar Tawakol, chief marking officer of Revenue Science, who was discussing some privacy studies the company has sponsored over the past two years. "We still have to provide notice and consent at the point where we collect the data, and there are no rules about where you use the data, so I think where the industry is going is trying to be more transparent in the ad."

As a result, he said, Revenue Science, which offers behavioral targeting technology that identifies Web site audience segments and provides the best audiences to online advertisers, is thinking about adding a link to the top of ads that allows consumers to either do a universal opt-out or tell the company more about themselves.

The panel, called Aligning Ads With Users, also explored behavioral marketing within multiple platforms and explained how it is a key element in online advertising that grows by as much as 70 percent each year.

"Yahoo's very focused on personalization," said panelist John Mracek, vice president of product marketing and advertiser services at Yahoo! Search Marketing. "We want to make both the content more relevant and the ads more relevant, and we are looking at developing ways where users can express more preferences about what they are interested in in a way that will actually make them feel that the ads are as much a part of the experience as the content is."

Other panelists included John Pestana, co-founder and executive vice president at Omniture; Eric Eller, senior director of product marketing at Advertising.com; and Jim Nail, chief marketing and strategy officer of Cymfony. The panel was moderated by Michael Della Penna, chief marketing officer of Epsilon.

In general, the panelists said that the tolerance for irrelevant advertising is decreasing because of all the different media channels out there.

"The newer generation is going to be more demanding of a very relevant, personalized and entertaining advertising experience, or they are just going to look for other ways to get their information," Mr. Mracek said.

Mr. Pestana said, "The more relevant we can be targeting ads to the right people at the right time, and in a good way, the more successful we will all be."

Mr. Eller also explained how important behavioral targeting could be in terms of testing.

"Behavioral targeting lets you test in-context versus out-context placement," he said.

For example, one of Advertising.com's clients is an apparel retailer for plus-sized clothing. Mr. Eller said, and Advertising.com has tested the client's targeting to different audiences.

One that works very well is a diet-focused audience, he said.

However, while they would never place ads on a diet site "because of the potential [public relations] problem, they are more than happy to target those people when they are on other sites, so it is a very interesting thing to touch on," Mr. Eller said.

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