Online Targeting: No Monsters Under the Bed

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monster_smallADOTAS – There continues to be noise around the growing menace of advertising in the online world. Alarmists point to the increasingly sophisticated capability to track and capture a user’s travels and behaviors across the Web, known as behavioral targeting.

Armed with this information delivered via cookies placed in your Web browser, advertisers are in the position to deliver highly targeted ads wherever you go online. This is being framed in a “Big Brother is Watching” way as though companies are getting into the business of spying on you (see this recent Wall Street Journal article) and threatening your life, liberty and happiness.

Here’s the thing – for all the bluster, it is largely an unfair characterization of how the industry actually operates. The problem is not companies getting into the business of spying (it’s just too expensive for companies to spy on consumers – there’s no real revenue in it); the real problem is fear and a lack of education around the online advertising industry.

We fear the unknown and what we don’t understand. At first glance, this new world of digital media and targeted online advertising may look frightening. But take a second glance, armed with knowledge about how online advertising works, and you’ll see there’s no boogeyman hiding in the closet, or monster under the bed.

How is a behaviorally targeted user being tracked?

In the online targeting world, the person actually isn’t being tracked at all. It is actually the browser that is being tracked — whether it be via cookies, clickstream or prior search history. If more than one person is using the computer, it all looks like one person to the advertiser. If users clear their browser information, when they come back to a site that has tracking enabled, they will look like a completely different person.

This browser versus user tracking is just the beginning of the anonymous nature of the process. All of this data then goes into algorithms which serve to classify the user into one of thousands of different anonymous behavioral buckets. This information has to be segmented because an advertiser can’t actually handle communicating with each individual person effectively — and so manages this by creating buckets of users.

Any data that doesn’t fit into valuable segments is largely discarded because it is extremely expensive both monetarily and from a query time perspective to store extraneous data in a database. In sum, there is very little data out there that anybody would ever have any reason to associate in a harmful way.

To be clear, there are advertisers who communicate to their customers in a personally identifiable way (via email, postal mail and any other way they can think to reach them), but that relationship is between the customer and the advertiser, and online doesn’t change this — it has been going on for decades.

What are the actual risks that people fear?

The biggest fear among users, it seems, is loss of anonymity and the risk that goes along with it. However, step back and consider how offline advertising (i.e. catalogs, brochures, circulars) works and you see that it is actually more intrusive. Marketers can purchase mailing lists detailing such personal information as medical conditions, children’s ages, home addresses, purchase history and even credit card numbers.

Online behavioral advertising however is targeting a browser and an IP address. As an example, my company Bizo is a B2B targeting platform that uses business demographics to target users. In my almost three years running the company, I have NEVER seen as much as a name of a user that has seen one of our ads, nor even an anonymous number of a user who has seen a specific ad. It is simply irrelevant to me and anybody else at my company.

The online advertising industry lives in the world of millions of impressions and the trends that are created with large scale. A single or even a few users never enter the equation.

As I wrote in an Adotas article (“Offline Targeting the Real Punch in the Nose”), with all the talk about the “horrors” of online targeting, it’s surprising that the debate hasn’t had the spotlight turn in the direction of offline-targeting practices – where activities that have been permissible for decades are actually based on real addresses in the real world, targeting real names and credit card statements. This is a far cry from simply placing a harmless banner ad in the virtual world of the browser.

Why do advertisers track the user?

The bottom line is — the better targeted the advertising, the more personalized the content and the less waste in serving consumers irrelevant ads. And believe it or not, that is positive for the user, the website publisher, and the advertiser.

For the user, the more targeted the content, the less noise there is. For example Google search ads deliver highly-targeted ads based on the search terms you type, and the ads are actually useful because they are a direct response to your query. Therefore, the value exchange is clear — you get the answers you want in exchange for giving up a bit of information about what you’re searching for online. The more relevant the ad, the more like content it becomes.

For publishers and content owners, when ads are targeted and highly relevant, they can afford to have fewer ads on their site while continuing to provide valuable Web content, free-of charge. Fewer, more targeted ads also translate into a better experience for users, which is a key objective for most publishers.

Finally, these new targeting capabilities have advertisers wasting fewer budget dollars trying to find the right Web audience. They can zero in (anonymously) on the audiences that matter and spend less money (i.e., buy fewer ads) to drive a return. In the end, the more targeted the ads, the fewer they need to serve.

In the end all parts of the channel benefit from this targeting, and it leads to a better online experience for everyone.

How do we reconcile the fear with the reality and move forward?

Because consumer fear of the unknown still remains, we have a problem and we need a solution. It’s crucial to fully educate the consumer and replace fear with understanding. Here’s how this can be accomplished:

Transparency is the key. This means everyone needs to have the option to opt out of targeted ads on any website if they so desire. Along with transparency and choice, consumers need to understand that they’ll still see ads, but they will be less relevant. (They’ll also likely see more ads to make up for a publisher’s revenue loss).

How do we do this? Well, we’re all advertisers and advertising vendors — let’s advertise and teach everyone. Bizo will donate 10 million impressions to the cause, and I’m sure others will as well.

Consumers need to understand that online content has value. When people consume content online for “free,” this is really in exchange for targeted ads. Everybody implicitly understands that Google is using very detailed information about a user’s current and past searches to serve up ads, but consumers are still willing to participate because of the value they got from the free web search tool.

Display ads are no different, except that the value of the tradeoff remains hidden and less understood because we are all used to free web content. Consumers need to be educated that there may be out-of-pocket costs to get valued content if they decide to opt out of targeted advertising.

It is up to the consumer to make this choice, because only they can make the best decision about how to act. Some companies and industry bodies like BlueKai, Better Advertising, Bynamite, NAI and others are trying to expose some of this information for consumers today.

Enforcement mechanisms. Just like in every walk of life there are those who break the rules. The industry actually has some very smart regulations in place to protect consumers, but there are few legitimate enforcement mechanisms. Enforcement mechanisms should be put in place to punish those who take advantage of users and use their information in nefarious or illegal ways.

I think this can take the form of an industry, self-regulatory body or a government codification of self-regulatory principles. Either way, those who break the rules should be punished.

So, let’s turn on the lights and see online targeting for what it is, not what we might imagine it to be. To make it real, as a consumer, you are one of hundreds of millions of anonymous browsers to the behavioral ad industry.

But even if you weren’t, do you really care that someone knows that you’re looking to buy a new Honda on the Web, work in the finance industry, or seem to like movies starring Ben Stiller? What’s the downside?

My life just isn’t that interesting — in fact here’s my IP address: 99.71.197.242. Do your worst, boogeymen!

But, I’m not going to publish my home address… That’s a whole lot scarier.

4 COMMENTS

  1. Great article. As an industry participant I have been trying to educate friends and family about the “boogie man” behind their ads. The WSJ article only put more gasoline in a fire that Facebook started and really needs to be managed with facts. It would have been good if the WSJ REPORTED different points of view on the issue. Explaining the BENEFITS of targeting without throwing scary words at consumers is the right approach. Thanks for giving us some good information to start sending around. Time to spread the word…

  2. 99.71.197.242!!! Aha! Your worst fear is coming to you; or your PC! :-)

    Sincerely, *The* Boogeyman…


    Good article Russ.

    Things get a bit more “interesting” (concerning to some) when considering mobile into the mix and when aggregating such w/ online…

    ceo

  3. THANK YOU for pointing out that direct mail has been doing MUCH more invasive targeting FOR DECADES.

    We should all remind consumers of this. They seem to forget the spam in their mailbox….. Oh and it kills trees too!

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