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Administration’s Privacy Initiative Likely No Death Knell for Ad Targeting

Published on February 24, 2012

The Obama administration has made it formal: in a report released yesterday, the Administration calls upon Congress to enact a privacy bill of rights for web users, and it calls upon companies like Google and Facebook to develop those standards, reports Business Week. Key among the rights is a simple, one-click opt-out of data collection. President Obama said in a statement “Consumers can’t wait any longer for clear rules…consumer trust is essential for the continued growth of the digital economy.”

Putting Google and Facebook in charge is a matter of fox guarding hen houses. Google was caught last week bypassing privacy settings on Apple’s Safari browser, which by default blocks cookies. Somehow, as CNN reported, Google tricked the browser into believing the viewer had interacted with an ad, thus giving Google permission to install a test cookie and collect user data. CNN called this just “the latest high-profile flap over online data privacy.” The Federal Trade Commission in 2011 settled complaints against Google, Facebook and Twitter over their handling of consumer data.

But, those companies are just three members of a consortium, which will also include the member organizations of the Digital Advertising Alliance (DAA). Those member organizations include the American Association of Advertising Agencies (4A's), the Association of National Advertisers (ANA), the American Advertising Federation (AAF), the Direct Marketing Association (DMA), the Interactive Advertising Bureau (IAB) and the Network Advertising Initiative (NAI). DAA said in a statement that the Administration had called upon it to “[create] robust self-regulation to protect consumer privacy rights and expectations in the advertising-supported Internet,” and claimed to be “honored.”

How honored DAA is has yet to be determined. The DAA earlier in February argued that it “wanted to put all the force of self regulation” behind ensuring consumer privacy, according to an Adweek story. It would police itself. But Adweek also observed that the Google snafu would likely put the kibosh on self regulation: the Administration is likely to legislate privacy measures. In fact, The Commerce Department will with with those companies and organizations—plus privacy advocate groups like the Center for Digital Democracy—to develop those (for now) voluntary standards.

Until any such legislation passes (if indeed), The White House report prescribed broad principles for the use of personal information, which includes giving consumers clear control over what data is collected and how it is used, the Business Week story describes.

Ad Targeting and Do Not Track

As the Business Week story described, privacy advocates are simply opposed to tracking consumers without permission, for purposes of targeted advertising.

DAA General Counsel Stu Inglis argues that online ad networks are willing and able to adhere to the anti-tracking tools available in most Web browsers (e.g., the “InPrivate” option available in Internet Explorer). Thus it is up to Mozilla with Firefox, Microsoft with Internet Explorer and so forth, to solve the opt-in/opt-out dilemma. Google said yesterday it would enable a “do-not-track” button to be embedded in its browser to let users limit information gathered on browsing habits.

No experts have weighed in on the potential impact to targeted advertising. But if Google, Microsoft and the DAA have their way, behavioral tracking will remain standard, and targeted advertising will survive it—perhaps for the better. Opt-in is of course the sign of a qualified sales lead.