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Where Does BT Go From Here?

Dawn Anfuso
Where Does BT Go From Here? Dawn Anfuso

There has been a lot of interest in behavioral targeting by privacy groups and the Federal Trade Commission (FTC) lately.

First, the Center for Digital Democracy (CDD) and the U.S. Public Interest Research Group (US PIRG) filed a complaint with the Federal Trade Commission (FTC) calling on the commission to undertake an immediate, formal investigation of online advertising practices. The groups claim in their 50-page filing that the data collection and interactive marketing system shaping the entire U.S. electronic marketplace is being built to "aggressively track internet users wherever they go, creating data profiles used in ever-more sophisticated and personalized one-to-one targeting schemes."

Current privacy disclosure policies, CDD and US PIRG contend, are totally inadequate, failing to effectively inform users what data are being collected and how that information is subsequently used.

In response, TACODA Systems announced its Consumer Choice Initiative, a system that will provide consumers notice of their exposure to the network at least once every six months. Tacoda Founder and Chairman Dave Morgan says the company's initiative, which will provide notice through the use of tens of millions of in-page advertising units, goes further than current regulations or industry best practices requirements for consumer privacy.

And finally, the FTC met about these issues for three days in Washington D.C.  The sessions were all about how to make sure hot new companies and hot new technologies don't overwhelm or overrun consumers-- the folks who are ultimately at the center of everyone's business models. Tacoda's Morgan attended the hearings and summed up his impression last week here in iMedia. 

With all of this going on, we asked players in the space to give their thoughts on where behavioral targeting goes from here.

The consensus: Behavioral targeting will continue and perhaps even increase in importance for marketers, but the industry needs to do a better job of educating both consumers and legislators about how it works.

Respondents are:

Andrew Zucker, Chief Sales Officer, Pulse 360 (A Seevast Company)
Jack Smith, VP, Product Strategy, 24/7 Real Media
Bill Gossman, President and CEO, Revenue Science
Alan Chapell, President, Chapell & Associates
Mitch Lowe, CEO, JumpStart Automotive Media
Brent Hieggelke, Chief Marketing Officer, Touch Clarity
Ari Kaufman, Vice President of Sales, TruEffect

Next: Read respondents' opinions on where BT goes from here.

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Alan Chapell, President, Chapell & Associates
Online media and marketing ecosystems are too often prejudiced by the bottom 25 percent of the industry. Industry leaders find themselves competing against companies with little or no skin in the game; companies simply looking to make a quick buck; companies that have no long-term interest in a healthy marketplace. This creates a race to the bottom in terms of practices when the goal appears merely to not be in the bottom 25 percent. So the argument goes-- if you're not in the bottom quartile, then you'll stay out of the eye of the regulators, consumer advocacy groups, or whomever.

This is where industry best practices can and do help. Several years ago, the Network Advertising Initiative put together standards for BT. However, even the most well thought out set of standards isn't much help if less than half of the market participants formally signs on to them. That said, I'm encouraged when I see players in the BT space who are raising their hand and saying "I do it better! I'm a top-tier vendor, and if you're a top-tier brand you should be working with me!"

Ask me "where does BT go from here?" however, and I'm forced to say "it depends." It depends on whether we as an industry want to subject our collective practices to a greater level of transparency. It depends upon whether we want to accept the notion that adherence to basic operational standards is simply the cost of doing business as a mature industry. Our ability to address these issues over the near term is going to go a long way towards determining our long-term success.

Mitch Lowe, CEO, JumpStart Automotive Media
This is a topic we've been talking to a lot of clients about.

There is one major problem standing in the way of behavioral targeting becoming a much more significant part of the media plan. Using "BT" as a general label is confusing. It means too many different things which makes it difficult to build best practices for. The result is bad data, poor strategic planning and confusion with everyone from planners to clients to reps.

We as an industry need to standardize a handful of the major types of BT targeting and then all future discussion should use this new label instead of BT. This will make some of the newsletters out-dated, but we as an industry will talk with more precision, enjoy better learnings, and see better targeting and relevance (of course the reason for BT) make up a much greater part of the media plan.

Brent Hieggelke, Chief Marketing Officer, Touch Clarity
Both behavioral targeting and on-site behavioral targeting, which are significantly different categories of solutions, will continue to grow in favor with marketers because they both deliver significant value and a win-win proposition for both the organization, in delivering a higher yield from more effective marketing spending, and the web visitor, in delivering greatly enhanced relevance of content, and promotional offers. But all solutions in these spaces need to be vehement about proper education. Simple differences in the categories and what they do and how they work are needed; such as the fact that the best on-site behavioral targeting solutions recommend the use of first-party cookies, and should never accept personally identifiable information about visitors to function. Proper education about best practices as they relate to privacy, along with the functionality, must also be part of the marketing, sales and implementation processes of all solutions.

At the 50,000 foot high level, behavioral targeting and on-site behavioral targeting solutions are simply attempting to replicate what other channels of business do today to deliver great service to customers: listen and learn, and then respond intelligently. The alternative is to force-feed a message that some anonymous marketer insists on everyone seeing and completely ignoring what the visitor is telling us with their actions.  Certainly, when consumers realize that better service and more relevance are indeed the end goals of companies using these technologies, they will demand that every other website should start listening to them and intelligently responding to their requests. And it stands to reason that stronger customer loyalty and future business come as a result of that investment in better service, and it's unlikely that people will have a problem with that once they understand it. 

Ari Kaufman, Vice President of Sales, TruEffect
It's time for behavioral targeting to advance. Ad servers and networks target prospects according to event-based behavior. While this is predicated on anonymous third-party cookies, the recent FTC filing is likely to be the first of a mounting band-wagon. Whistle-blowers, politicians and anyone else who believes in the big-brother conspiracy theory may decide to jump on this. Evolution is where attention should be paid. The next generation of behavioral targeting is to re-target customers through online advertising. A marketer can communicate with someone with whom they have a relationship, without being accused of violating privacy. A clearly stated set of data policies can enable a marketer to leverage customer behavior to create models for advertising, just as is done with direct marketing. Behavioral targeting is now capable of distinguishing existing customers through online advertising campaigns, instead of prospecting based on events. Moving in this direction will bring behavioral targeting forward instead of holding it back in a winless battle about rights and privacy.

Dawn Anfuso is senior editor, iMedia Connection. Read full bio.

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Andrew Zucker, Chief Sales Officer, Pulse 360 (A Seevast Company)
I believe larger networks will begin to offer behavioral targeting as a unique product with separate bidding, similar to how contextual and content targeting have been separated from search. Seevast has always been a pioneer on this front, and I expect others will follow. I also think we will see deeper behavioral targeting behind the scenes, layering behavioral targeting on top of contextual, geotargeting and other forms of targeting-- all ways to give advertisers more control over their spend. 

In terms of regulators and consumer watchdogs, I believe they will eventually have a better understanding of cookies as we in the industry educate the general public about how internet advertising works and how this is not a privacy issue. Unfortunately, there is still a lot of confusion in this space, but we believe this will change as the public becomes more informed. It is important for users and publishers to realize third-party cookies carry no personally identifiable information, and the user experience is seamless.

Jack Smith, VP, Product Strategy, 24/7 Real Media
In the coming years, behavioral targeting will continue to pervade digital media, enabling more effective microtargeting of audiences across such digital marketing platforms as search or video, plus user-generated content such as blogs, wikis and podcasts. At the same time, the industry will take steps to better protect consumer privacy, through three critical initiatives:

Transparency: Consumers must be notified of how their data is gathered and used for targeting purposes. Misleading practices will not be tolerated by consumers.

Choice: Clear notice must be given for consumers to opt-out of behavioral targeting practices.

Education: The digital advertising industry must educate consumers and legislators about how anonymous behavioral targeting is far less intrusive on privacy than offline behavioral marketing tactics such as direct mail.

The interactive advertising industry will continue to explore new ways to make advertising more relevant to consumers without violating privacy concerns.

Bill Gossman, President and CEO, Revenue Science
Behavioral targeting is being driven by demands of both consumers and the market.

While recent discussion has focused on consumer privacy, it's important not to forget the other half of the equation: relevancy. Consumers want their privacy protected and a relevant online experience. Revenue Science behavioral targeting provides both; we never collect personally identifiable information, so people benefit from more relevant content while remaining completely anonymous.

As far as the online advertising business, internet traffic continues to grow, as does fragmentation, and search remains a single-digit share of traffic. The industry must aggregate audiences effectively in order to protect the viability of advertising subsidy of consumers' media consumption, and this is increasing adoption of behavioral targeting. As IP-based media such as mobile and IPTV become more prevalent, the need will only increase.

At Revenue Science, relevancy and privacy are our guiding principles. As long as we stay true to them, behavioral targeting will have a bright future.

Next: More industry opinions


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