The politics of behavioral targeting

I hope those who read my previous post, Behavioral Targeting creates fear, didn’t feel I was questioning the value of this complex advertising methodology.

I wanted to pose a question about advertisers being exposed to the risk of a consumer backlash from being involved with a process perceived to be about privacy exploitation or spyware. As well as any potential for a general flight from behavioral targeting because of consumer fears.

To understand the history of Behavioral Targeting, the issues in the industry and to see what Behavioral vendors think might be coming up in the future, this excellent keynote address video by Dave Morgan, founder of TACODA and Real Media (predecessor of 24/7 Real Media), is worth watching. It is from MediaPost’s OMMA Behavioral conference in San Francisco in June this year.

In the 35 minute address Morgan outlines problems with consumer perceptions about behavioural targeting and spyware with particular reference to US senators he has spoken to, including Washington’s Senator Maria Cantwell, former Marketing Director of RealNetworks, all of whom are apparently willing to err on the side of political caution due to the significant concern over privacy and spyware of their constituents.

Dave Morgan at OMMA Behavioural

Dave Morgan at OMMA Behavioral, June 2008

He ends by answering a question about ISPs doing deep packet inspections. “Is it legal – yes, probably it is. Is it a good idea – no. It doesn’t pass the creepy factor” He says that anything we do in this environment must pass the creepy factor or it is doomed – which is exactly my point.

There are two sides battling out the privacy debate, particularly in the US, and their arguments have been summarised concisely by Josh Gordon in his blog The Lunch Pail.

Side 1, articulated by Jim DeMint, a former marketing research firm founder-turned Republican Senator from South Carolina, states that any new privacy laws governing behavioral targeting amounts to, “a solution looking for a problem.” He supports his argument with the idea that market forces will provide the changes needed to protect consumers’ rights. In sum, he argues that businesses will try to out-do each other with their privacy policies, paving the way for self-regulation.

Side 2 is best captured by committee chair and North Dakota Democratic Senator Byron Dorgan. He sarcastically argues that if market forces could alone regulate society, then the FDA would no longer have to perform inspections. If a company sold spoiled or bad goods they would simply be avoided by consumers, an example of corporate Darwinism. In sum, Dorgan believes self-regulation doesn’t go far enough and is risky for the consumer.

It may be a type of corporate Darwinism that I talk about when companies get backlashed for using techniques such as deep packet inspection, but I’m concerned about unwitting advertisers who aren’t aware of the types of behavioral products they are using and how powerful the market’s response can be if it feels betrayed. The fundamental rule of marketing 2.0 is “be honest with your customers, because if you’re not, this big, networked world will turn around and bite you”, and advertisers need to understand the risk and return for each investment. Where government policy is “the elephant in the room”, as Dave Morgan puts it, that can change the terrain for BT vendors and users in a flash – consumers are the whale.

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6 Responses

  1. Hi Chris,

    Just posted a recap of a fascinating round table discussion I had at Shop.org’s Annual Summit. It concerned the status of behavioral targeting on the web. I’d love to get your feedback.

    http://lunchpail.knotice.com/2008/09/19/shoporg-targeting-the-war-over-data/

    Thanks,

    Josh

  2. Thanks Josh, Let’s hope so! and I think you’re right, as we become more educated as a total online community. At the moment, many marketers are still struggling with new media (particularly social media) and can easily get led astray without doing the research on the impact it will have on their customers – both positive and negative. According to Burson Marstella Study, only 74 (NOT per cent!) of the Fortune 500 companies have bloggers! Crazy stuff.

  3. Interesting point on unwitting companies deploying technologies without examining the impact on their customer base. I agree that is an undesirable outcome good corporate citizens will help ward off.

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