The Dark Side of Interactive Marketing Isn’t So Dark

    January 23, 2007

Privacy advocates are busy stirring the pot over the allegedly illicit invasiveness of behaviorally targeted ads, but a close examination of available data reveals that their hand-wringing is little more than hot air.

They sound the alarm bells that behavioral networks collect personal data, manipulate consumers at the neurological level, and don’t provide consumers with an easy way to opt out. One must greet these claims with a healthy dose of skepticism if behavioral targeting is to avoid the fate of adware.

The claim that behavioral networks aggregate personal data is misleading. It would be more accurate to claim that the networks collect impersonal data. A behavioral network keeps track of a computer’s web surfing history in order to serve ads that are tuned to the surfer’s interest. In the case of behavioral search retargeting, the network keeps track of searches that users have entered, also to serve more relevant ads. The vast majority of the time, these searches are not traceable to any personally identifiable information (the exception being when a person enters himself or herself or other highly specific personal data such as SS# credit card or drivers license number into a search engine).

Are consumers particularly worried about this data collection? Let’s ask them. In October, a Harris Interactive study found that 78 percent of users would be happy to receive targeted ads, and sixty-four percent of those would be happy to give up a little personal information. In a study conducted in April of last year by the Ponemon Institute, sixty-three percent of those surveyed said that Internet marketers should “always” understand their interests, and eighty-six percent claimed that they would rather see relevant ads than pay for content. Indeed, the success of programs like The New York Times Online and Hotmail are proof that consumers don’t mind giving up a little personal data in order to receive content for free.

One privacy advocate has gone so far as to claim that “advertisers are now working to harness the power of our emotions through research on ‘neuroscience’ and ‘pathophsyiology.'” The claim that advertisers are trying to surpass consumers’ conscious decision making process is flat out deceitful. It seems to this frog that if advertisers could tap into consumers’ neurons, conversion rates would be close to 100%. It wouldn’t be advertising anymore; it’d be more like hypnosis. In reality, most advertisers are ecstatic with a five percent conversion rate or perhaps 30% of market share among their competition.

That suggests that no matter how targeted the advertisement is, most people are loath to respond to advertising unless they’re interested in the product or service anyway and have already done research on it. If advertising stimulates curiosity and influences research among viewers that alone is great. What most advertisers actually do is analyze click, traffic, and conversion patterns, and test different attention-grabbing strategies to determine the most effective message. That’s not subliminal, it’s effective communication on a conscious level.

Contrary to some opinions, most advertisers are not mad scientists plotting to pull the wool over consumers’ eyes while they plot their world domination. Rather, most of them believe that consumers ought to have control over what data is collected and how it is used. They believe this not only from an ethical perspective, but also from a self-interested perspective. Most advertisers wouldn’t want to waste valuable clicks and impressions on an audience that doesn’t want to receive their message and is thus unlikely to convert.

Unfortunately, it is currently way too difficult for the average Internet user to opt-out of behavioral networks. This is largely because there are so many behavioral networks that opting out of each individual one would be a very labor-intensive, time-consuming process. One possible solution is to create one Web site, perhaps powered by the FTC, dedicated to opting out of online advertising. All the individual networks should then be required to check their opt-out lists against this master list to make sure they’re not serving any unwanted ads. Such a solution would make it easier for consumers to control their “personal” data.

It bears mentioning that not all advertisers are so ethical. Some of them will look to use personal data in impermissible ways, and those few place the whole behavioral targeting industry in peril. It’s reminiscent of adware. Many software programmers used adware according to the accepted guidelines. They did everything right, but those few bad apples who created spyware and malware really did spoil the whole bunch.

As such, two things must happen if behavioral targeting is to weather this storm of criticism. First, an impartial regulatory body such as the FTC must step in, create acceptable rules or legislation, and punish advertisers who try to circumvent the rules. Second, advertisers must enter the national debate forcefully. It would be all too easy for a politician or reporter to make a name for himself or herself by damning the industry and scaring the public. Indeed, a few buzzwords like “personal data” and “subconscious manipulation” uttered here and there could resonate with the public and reinforce the “mad scientist” stereotype. But if advertisers can counter with some irrefutable evidence, the government and the American public alike will realize that the dark side of interactive marketing isn’t so dark.


Add to | Digg | Reddit | Furl

Bookmark WebProNews:

Mr. Frog is a leading Search industry visionary. Mr. Frog is a member of the Did-it Search Marketing team which accompanies him to most major
marketing conferences.