Behavioral Ad Targeting – Love It or Hate It

By Kerrie Spencer, staff technology writer – April 13, 2010

If you really want to get people riled up about things that invade their privacy, this latest attempt to target consumer behavior will certainly do just that. In fact, just one mention of behavioral ad targeting will send regulators and lawmakers climbing the walls.

On the surface, this sounds like a great idea and there are several online businesses that will be pleased if this does come to pass. But wait, what is behavioral ad targeting? What this does is target digital ads that are geared specifically to an online user’s web surfing habits. If you operate a business, you are probably gleefully calculating the benefits of that right now, and they could be plentiful. However, this issue has struck a deep chord in many people about sensitive data and privacy.

Whether this is an overreaction or not remains to be seen. What’s clear is that there are two camps weighing in on the merits of this kind of innovation. In the first camp are the proponents of this new idea who have read and endorsed a study released by the Network Advertising Initiative. That report basically says that behavioral ad targeting is more than twice as effective as random ads that have no target.

Another major point from this same report also indicated the inventory from behavioral ads is worth double those of the typical ads – ones without any specific targeting. Of further interest is that this study showed approximately 6.8% of those who click on targeted ads “do” convert to buyers versus a measly 2.8% who clicked on non-targeted ads.

At this point, some of you may be asking just how much you value your privacy if you can get what you want on a silver platter while online.

On the other hand, there will be people who don’t like the idea that strangers know their surfing habits. Don’t look now, but that already happens, whether you like it or not. Think Yahoo and Microsoft – it’s no “coincidence” that you receive ads from them that are of interest you. It’s because they know where you have been online, and that should give you pause for thought. What sites have you been to lately?

What does the Network Advertising Initiative have to say about targeting like this? Their executive director, Charles Curran, stated, “This study demonstrates the increasing significance of behavioral advertising to the economic model supporting free online content and services for consumers, as well as the need for careful consideration of policies that would affect the current online advertising marketplace and the innovation it supports.” A bit like fence-sitting, isn’t it?

Well, all right then, prepare for an online war of words and philosophies that will follow in the footsteps of remarks like Currans, particularly when people who don’t know they are already being tracked and targeted realize what this really means. One should understand that the targeted ads being talked about by the Network Advertising Initiative are not the same thing as the ads you find on Facebook. Those ads are based on your profile information, not your surfing habits.

But, what about regulations? Who will draft a set of regulations to keep people from tracking very sensitive behaviors, such as surfing habits that relate to sexual orientation or preferences, medical information, criminal victims, psychiatric history, and the consummate no-no of targeting ads to children under 13 years old? Seems that has already been done, by the Network Advertising Initiative. Of course, the real question is who will make advertisers follow those rules and regulations laid out in the guidelines?

The Network Advertising Initiative also supports something called an opt-out clause when it comes to ad targeting. In other words, it gives the consumer the choice to be tracked or not. Choice is nice, but then so is the choice to opt-in instead of opt-out. Opting-in makes much more sense because then no one gets targeted ads unless they want to receive them.

So, where do you stand on this issue?

Sources

1) http://news.cnet.com/8301-13577_3-20001069-36.html

2) http://www.networkadvertising.org/

3) http://news.cnet.com/8301-10784_3-9899587-7.html

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