Online Behavioral Targeting Debate Continues—Ads May Not


Article ImageIf you've ever wondered why Googling "healthy eating recipes" while sitting on the couch in your pajamas leads to an inbox jam-packed with emails from every health and diet website known to man, then I have two words for you: behavioral targeting. Somewhere along the line you knowingly (or unknowingly) agreed to let a company give away your information, and now, your cookies are being stolen from your web-browsing cookie jar only to be passed out to hungry advertisers. Governments are starting to crack down on this practice, though, leading some to believe this method may soon be a thing of the past.

On June 18, representatives from companies such as Yahoo!, Facebook, and Google faced Congress for the Energy and Commerce Subcommittee Hearing on Behavioral Advertising: Industry Practices and Consumers' Expectations. The hearing focused on consumer privacy and the way these companies deal with consumers' information. According to the House of Representatives website, the issue under consideration was whether or not federal privacy legislation is necessary, or if companies could be trusted to discipline and regulate themselves. This isn't the first time the question has come up, though.

"The Federal Trade Commission [FTC] issued self-regulatory principles at the end of 2007, which were recently revised after receiving public comments," according to Tanya Forsheit, a partner in Proskauer Rose's Los Angeles office, and co-head of the firm's privacy and data security practice group. "The principles involve transparency and consumer control, reasonable security, limited data retention, consent issues, and specifically consent in respect to sensitive data and changes to privacy practices."

Still, the questions about regulation remain unanswered as opinions continue to differ. The U.S. does not yet have any proposed legislation in the area of behavioral targeting, offering only the FTC's self-regulatory principles to provide a sense of discipline for advertisers. "There can be some tremendous benefits to consumers [from behavioral targeting] because you're getting ads that are relevant to your interests, but the concern that's been expressed by some of the advocacy groups is whether consumers are really getting sufficient notice and control with respect to how their data is being used, and to try to make sure that the data isn't being used inappropriately," says Forsheit.

The European Union (EU) has already begun refereeing the behavioral targeting game with stricter legislation. Joe Hughes, insight and research manager of Yomego, tells how the EU handles online privacy issues: "A user's data cannot be used for any purposes unless they actively opt in. There's a terms and conditions box, and you have to make it clear to the user what you're going to do with that data. You have to be clear and upfront, so on the registration page itself it has to be stated."

From an advertiser's standpoint, behavioral targeting may well be on its way out, making the whole argument a moot point. According to Hughes, consumers are beginning to understand that the amount of data available about them is increasing, and the control they have over this information is decreasing. "There's a mentality that ‘someone has got my data and someone is going to do evil things with it.' Once that perception is there, it's hard to break," he says.

Forsheit sees much more attention being paid to online privacy issues than in the past. "I think it's more likely today than it's been in a long time, that we will see some kind of federal privacy legislation-likely focused on online issues-but when that might happen I don't know," she says. According to Forsheit, "the FTC has said in the past that they don't think legislation is necessary here, but because there is the potential for abuse, they are going to watch, and if there is a problem they may change their minds." All the speculation may be for naught, though. If ad blockers continue to push behavioral advertising from computer screens, this targeting trend may become less of an issue than some anticipate.

Hughes thinks the Firefox browser ad blocker-which has been downloaded by several million users-is proof that consumers find little interest or appreciation for behavioral targeting. He says advertisers using this method are not going to reach consumers anyway, wasting the precious few ad dollars left to go around in a struggling economy. He says, "I think things like Facebook Connect-where you can access user data but in a much more automated way-are really the areas that advertisers should be looking at. Not thinking about static data, but thinking about how you can start having a conversation with somebody."