Behavioral Data: Boon for Marketing, Bane for Privacy

For anyone on the floor at ad:tech San Francisco it was apparent that behavioral targeting aka “re-messaging” was all the rage.  Advertisers looking to find ROAS in their failing campaigns are eager for it and vendors like DoubleClick are eager to sell it to them.

In the recent New York Times article “Shoppers Who Can’t Have Secrets,” Natasha Singer writes that “advances in data collection are far outpacing personal data protection.” Singer uses such behavioral tracking examples as in-store cameras that follow shoppers’ movements, an online coupon with a bar code that tells a retailer the search terms a consumer used to find it, and a mobile marketer that sends an ad to a consumer’s smartphone when that shopper is near a store clothing rack.

All of these are instances of marketers who are, in fact, being much smarter about the way they use data to target specific individuals and provide them with the right information at the right time. It represents a kind of sophisticated efficiency that makes marketing highly relevant.

But as Singer points out, it also represents a movement towards collecting a wealth of behavioral data, perhaps without the consent of the consumer. That makes the Federal Trade Commission just a little bit concerned. “How does notice and choice work when you don’t even interface with the company that has your data?” asks Jessica Rich of the FTC.

The online advertising industry, anxious to avoid over-regulation, is working to develop new standards for “enhanced notice in online ads.” According to the IAB (Interactive Advertising Bureau), such standards will “allow advertisers and ad networks to begin offering a clickable icon in or near online ads that directs users to additional information about online behavioral advertising and choices about such ads.”

Already, a group called the Network Advertising Initiative, whose members include online advertisers, is offering an “Opt-out Tool” to consumers who wish to reduce the use of behavior-based ads. All it really does, however, is identify member companies using cookies, replace them, and verify the consumer’s opt-out status.

Is it such a big deal that marketers analyze consumers’ behavior data and target ads and promotions on that basis? Isn’t this simply reading and responding to a consumer’s demonstrated likes, dislikes, and purchase preferences? In an era of consumers revealing far more personal data than perhaps they should on such social media sites as Facebook, how harmful could behavioral data be?

The big deal, says Jeff Chester of Center for Digital Democracy in the NYT interview, is “unfettered data collection of all your activities online and off.” Marc Rotenberg of the Electronic Privacy Information Center adds, “The U.S. system with regard to privacy is not working.”

This issue is far from a final resolution, but in the meantime, online advertisers are forging ahead with advertising and promotional strategies that take advantage of the behavioral data they collect. Chances are they feel that the relevancy of their marketing is worth taking the risk of seeming a little too intrusive.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

Website: http://www.barrysilverstein.com