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Posted by Site Administrator on July 10, 2008
Yesterday's FTC hearings on behavioral targeting failed to create any regulations, but did outline that BT can be both good and bad. Compared to the scare that spam caused, the FTC has been relatively kind to behavioral targeting so far.
The FTC write-up notes:
According to the testimony, behavioral advertising may provide a variety of benefits to consumers, including free content, personalization of ads, and a potential reduction in unwanted advertising. Consumer research has shown that consumers value online ads that are more personalized.
Jupiter's surveys show that only 28 percent of online users prefer well targeted ads to random ads, but it seems intuitive that well targeted advertising is desireable in general.
The FTC seems to be leaning towards self-regulation not government regulation. I am a fan of self-regulation for a few aspects: how data can be collected and stored, which personal pieces of information can be targeted, and how often. However, there are still some issues that might need government oversight, notably with consumer privacy. Oddly, the FTC contradicts itself on privacy issues. They seem to believe NebuAd's claim that the data is anonymous, but then voice concern on sensitive issues:
In particular, "Without adequate safeguards in place, consumer tracking data may fall into the wrong hands or be used for unanticipated purposes," the testimony states. "These concerns are exacerbated when the tracking involves sensitive information about, for example, children, health, or a consumer's finances."
Just as AOL said that their search data was anonymous, but many proved how easy it was to identify people, behavioral targeting data carries obvious clues. How many people in Pittsburg are looking for a cure for insomnia, drive a pontiac and have a child entering college? Probably not many.
The FTC must create guidelines around privacy, for example to determine whether those who misuse user data can be prosecuted and who is held responsible for the ownership of the data. In this case, NebuAd or the ISPs.
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