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How Privacy Legislation Will Change The Ad Network/Exchange Paradigm -- Pulling Back The Curtain Of Oz
Posted by Anthony Mullen on January 17, 2012
In my recent paper titled Privacy Laws Force Rich Dialogue with Customers I outlined some of the looming legal directives that will change the targeting dialogue between brands and consumers and how the industry should respond.
The ad network ecosystem will ultimately be forced the pull back the curtain of Oz to reveal to customers the machines and levers behind targeting technology. As illustrated in my paper, the predominant approaches are full targeting vesus opt out, but this is not enough choice. Segmentation strategies and targeting techniques used by ad tools are hidden within engines and will need to be surfaced to customers so that they may verify, modify, and importantly play with them.
This isn’t easy, however, as the mathematical vernacular of targeting technology with confusing terms such as graphs, nodes, and vectors are unintelligible to most. Metaphors will be needed to distill the complexity for customers. One of the approaches to take will be similar to how optometrists work by showing the customer different "lenses" (perceptions) held about them and subsequently allowing them to choose. These "lenses" may not just be rich segmentation concepts but will include social and individual assumptions too.
Where does this transparency and explanation rationale take us?
Ad networks/exchanges and ISPs will "open the kimono" to avoid a public backlash. ISPs and ad networks are working on solutions to permissions but mostly have the flaw that they are "all or nothing." As customer understanding matures, new permissions and control over how targeting takes place will surface. Ad networks/exchanges and ISPs will be forced to have "personalities" and move from a hidden to an explicit relationship with customers. Companies like BlueKai are moving in the right direction by decoupling user behavior data from ad serving (via a behavioral data exchange) but more is needed to include the customer in the equation. Expect to see ad technology companies begin to budget for privacy topics to equal their new targeting functionality spend.
The relationship between ad servers and ad exchanges will become more clearly defined. Ad servers and exchanges are currently jockeying for position and as a result the need for specialism will emerge. This new relationship with customers will include control over activity history, the data the customer wants to exclude, and rich self-segmentation choices. Not all ad engines are the same and in order to block the threat from ad exchanges they will leverage their domain to build up an expertise (semantic insight) into niche areas. These niche areas will recommend content, events, and adverts to customers in the manner of a trusted advisor.
Publishers will demand granularity of control over what is surfaced on their own and third-party real estate. Publishers will take more control over their brand in order to provide tighter targeting of advertisements and messages to their customers. They will request new tools from their ad services that allow their customers to control how they are targeted. Publishers and brands will focus more on the lifetime value of the customer and will increasingly be willing accept short-term losses for longer-term gain.
What features will publishers, ad networks/exchanges and ISPs will be rushing to implement? I’ve illustrated some thoughts below and welcome your comments. What's missing, what’s wrong, and what is simply pie-in-the-sky?
Publishers to Ad Networks/ISPs
Publishers will be looking to a) increase personalization of ads; b) consider the lifetime value of a customer; and c) make value judgments about the types of content they are associated with. Here are some examples of the needs publishers will increasingly place on targeting services
- Show music-related ads but not this particular genre on my site.
- Don't show violent video game ads on my website.
- Give me controls to skin adverts on my site so they seamlessly blend.
- Give me tools so that my viewers can score the adverts you serve.
- Provide me with reports that show how off-site targeting privacy issues are affecting ad serving.
- Provide me with customization tools for my site so I can allow customers to customize their cookies.
- Give me options to have on-site targeting configured for short- versus long-term ROI.
Consumers to Publishers/Ad Networks/ISPs
Consumers for the most part are not necessarily aware that there are entities such as ad engines or networks. They are aware however that they are being targeted.
- Why did I get that message? Provide me an explanation.
- Your assumptions are all wrong about me - please reset.
- I want the tone of my adverts/recommendations to dynamically change the same way I do with TV channels.
- Yes -- I don't mind if my Amazon purchases are used to provide me with recommendations outside of the Amazon store.
- I don't want adverts of category X.
- Show me the history of adverts you have served with me.
- Report an ad as inappropriate.
Publishers to Customers
- Score the adverts you see here to help me improve my advertising with you.
- Find out about the targeting we do.
- See who our ad network partners are.
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