Targeted Digital Advertising: Some Good and Bad News for Consumers

On the same day this week there were two news items (and opposing forces?) addressing targeted advertising. The first was a Verizon executive representing FiOS TV product development stating that advertising on TV is evolving away from the model of the past 50 years where advertising targeted specific hit shows with larger audiences to a model that targets specific audiences and shows whether attracting large audiences or not, but with more relevant advertising for those watching – which is what is meant by “targeted”. What is most admirable on Verizon’s part is the stated plan to develop a content delivery model that gives consumers choice across a broad spectrum of programming that is more or less advertiser sponsored, subscription-based or a la carte. Their ability to influence and change the content licensing and syndication model by content producers and regulators will be critical to this end.

The other news item is more interesting in that content that is provided online has for some time been utilizing the ability to track and address and target specific users based upon their web-based activities and behavior – known as “behavioral targeting”. It is the same or similar model that the new breed of pay-TV providers like Verizon intends to emulate. All service providers whether they are delivering content online over the public Internet or via more private and managed networks are promoting the benefits to consumers of behavioral and targeted advertising. It is a new twist on “consumer choice” in that the consumer should never expect to experience “ad-less” content in either delivery scenario, but to have more control over how many and what type of advertisements might fit their profile however much their service provider may know about their consuming habits. Boiled down it is the new “Opt-In/Opt-Out” solution to a problem stemming from consumer privacy issues that still require active and even proactive decision making by consumers to opt in or out from marketers’ and advertisers’ pursuits of their spending.

Enter the privacy advocates who attended the “Computers, Freedom and Privacy Conference” in Washington, D.C the same week and maybe even day the Verizon representative was himself being diplomatic and democratic about targeted advertising. Multiple privacy advocates and academics argued that opting in or out for consumers is very problematic due to the systems and tools used, and that consumers should not have to be so active in making certain their opting out is covered and applicable indefinitely. The primary culprit mentioned in a previous blog post by me is again “cookies”, as it turns out that most opt-out mechanisms are stored in cookies that can be deleted each time a user clears their browser. Google, Microsoft and even the Interactive Advertising Bureau (IAB) that is the primary body developing interactive advertising best practices admitted that current opt-out mechanisms can be confusing and problematic. There is good news in that around 30 ad networks deliver around 90% of all online ads as members of the Networking Advertising Initiative that offers a single opt-out cookie. But online and managed network service providers beware – privacy advocates are calling on the US government to require that advertising networks get opt-in approval before tracking Web behavior, and some advocates are asking out loud if the whole business practice is unfair and for the US FTC to get involved. All service provider types need to get together on this and do what it takes for resolution.