If you thought the rumblings coming out of the Federal Trade Commission Town Hall titled "Ehavioral Advertising: Tracking, Targeting, and Technology" last week will only impact behavioral targeting, you had better look beneath the surface.
The purpose of the two-day event was to address consumer protection issues raised by the tracking of consumers' activities online for the purposes of targeting. The publishers were well represented with AOL, Yahoo!, Microsoft, Google and others as well as consumer advocates, technologists and industry representatives. Despite the efforts of the event organizers at the FTC, there was one constituency noticeably under represented: the companies that fund the entire industry of interactive advertising, the advertisers.
Several of you may recall a similar event the FTC held in 1999, which prompted the formation of the Network Advertising Initiative (NAI), a successful venture whose goal was to moderate the Federal Government's interest in legislating consumer privacy standards online, at least until now. Commissioner Jon Leibowitz stated in his presentation at this month's event that industry self-regulation has been inadequate and that the FTC may have to step in. However, as I pointed out during my presentation with Google and Microsoft, there are other options in the management, use and retention of data that should be considered before resorting to sanctions or legislation.
The quiet truth is that census-based performance reporting, not behavioral targeting, has been the driving force behind the success of interactive advertising. An advertiser can see in hours how an offer or a piece of media is performing and make immediate optimization decisions. This has only been possible because of cookies.
Make no mistake; the promise of behavioral targeting has been met in certain instances. But the effectiveness of anonymous cookie profiling databases for effective targeting has been over promised and under delivered. Virtually every impression and click, however, is measured, and that is why media dollars have continued to flow online year-over-year. The implications of a Do-Not-Track registry for interactive advertising would include the removal of these measurement capabilities, effectively throwing the measurement baby out with the behavioral targeting bath water.
We are currently engaged in one of the most significant discussions in eight years about interactive technology and the consumer. The single most influential (and influenced) group is obvious in their absence at the table. Of course Microsoft, eBay, AOL and the other major web companies are large advertisers. But the bulk of interactive media dollars are spent by retail, automotive, financial, travel and similar companies. I counted one panelist -- Verizon -- that I would classify as such a company.
To the thousands of chief marketing officers who spend money online, it is time to get engaged. And to the event organizers at the FTC, it is vital that you find a way to encourage their participation. Remove barriers to raise the interest and reduce the reticence of the advertiser community before finalizing your recommendations.
Behavioral targeting, post-click metrics, and every capability resulting from the cookie have been developed because of the requirement by advertisers to maximize the return from every media dollar. The focus of the FTC is the consumer. The focus of the advertiser is the consumer. You may have a lot more in common than has been advertised.
Scott Nelson is the COO of TruEffect, a provider of next generation advertising technology. Read full bio.
