Compensating Consumers for Behavioral Targeting
My brother recently wrote a post arguing that consumers should be compensated for being tracked so that online ads can be better targeted.
I couldn’t disagree more (and not just because he’s my brother).
There is no reason that consumers deserve to be compensated for being tracked. Scott claims that “the data carries no value to a consumer.” This is very untrue. Serving relevant ads to a user is very valuable to the user. So much so that most of the people who log into registries where they can see that data one of these companies have on them don’t choose to opt out, but instead choose to make the data more accurate.
The idea of giving monetary compensation to consumers for targeting them with ads that may be relevant is silly. When I checkout at Target a company called Catalina prints out a coupon (a form of advertisement) based on my current and past purchases. In that case you would argue the compensation is the coupon (one that you are likely to use). I would argue that the compensation online is an advertisement for a product that you will likely be interested in.
Let’s not forget the other argument which is that the content the user is looking at is free. This is possible because of the revenue that theyare able to bring in due to ads. And BT ads provide much more value then non BT. Publishers are struggling to stay in business and the selling of data is one way they can do that.
There are some problems with the current ecosystem.
1 - Some of the data companies are collecting data without the publishers knowledge and without compensating the publisher. This is because the same cookie that is used to track who the advertiser served an ad to can also be used to retarget those users based on the URL of the page they served the ad. All of the major ad networks are working to clamp down on this.
2 - The use of “Flash Cookies” this issue this much smaller then most make it out to be and those that are using Flash Cookies are not ligit companies that anyone I know will do business with.
3 - The users expectation and understanding of what is happening. This problem is being remedied in my opinion with the great work being done by Better Advertising to make users aware of ads that are behavioral targeted.
4 - The use of offline data to target users online. I think that in some cases this can cross the line. While a user who buys shoes on Zappos.com can understand why he is seeing Zappos ads later that day and is not too bothered by that, I think users would be very disappointed to see an add for hemorrhoid cream because they purchased that product at a drug store down the street. While I am unaware of any brand that is doing purchase based targeting from offline to online, the technology is there and some folks are very close. This is an area where we need to educate consumers and make sure that consumers are aware when their data is being matched from offline to online.
I always argue that we should care less about the traditional term “privacy” but more about what a users expectations are. Does a user expect that when they are searching for a car that they will latter see ads for a car? I think they do and I also think it’s OK.
The other day I got a political ad in the mail that was about gay issues. They must have known I was gay. I went ahead and sent them a bill for 1/10 of a penny since they used my data to target me. I’m still waiting….
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If you’re looking for a good writeup on where the industry is at I recommend checking out Ed Zimmerman, Mark Kesslen, and Matthew Savare’s response to the FTC complaint about online advertising.
