Net Gains: FTC Tries to Give Its Answer to Consumer Privacy and Behavioral Tracking1 Apr, 2008 By: David Gervase Response
On Nov. 1-2, 2007, the Federal Trade Commission (FTC) hosted a two-day "Town Hall" event in Washington, D.C., that focused on online consumer protection issues related to targeted and behavioral advertising. This is the practice of online marketing companies collecting information about individuals who visit their Web sites.
The data in question includes pages visited on the Web site, referring site, geographic location based upon the IP address, and possibly other non-unique information about the computer, such as screen resolution, browser, connection speed, etc. Marketers then use this data to create a profile of that customer and display advertisements that are extremely relevant to the consumer. While this data does not include personal information such as a phone number or E-mail address, it does give the advertiser a significant advantage in determining what ads or banners a particular visitor is most likely to click on.
The "Do-Not-Track" list, which is very similar in function to the more recognized "Do-Not-Call" list, was submitted to the FTC for review by a number of independent privacy groups, including the Consumer Federation of America, the Electronic Frontier Foundation, and the Center for Democracy and Technology. It is their contention that the government should create a committee to regulate what information is being stored by the various online advertising firms that rely on this data.
They are also pushing for advertising firms to be legally required to submit a list of the IP addresses for their servers and domains used to track visitors with cookies. These agencies claim that if this policy is put into place, it would give consumers more control over who has access to their personal information.
While the proposal sounds simple in nature, the actual implementation would be more difficult than its predecessor. First, consumers who do not want to be shown relevant ads would be required to opt in to the program by submitting their names to a list maintained by the FTC. Next, new browser plug-ins would have to be developed and installed individually by consumers.
In addition to the customer list, the FTC would also retain the list of manually submitted sites and servers that utilize behavioral advertising technology. The consumer's browser would interact with this list of domains and block tracking cookies, yet would still allow non-targeted ads to be shown.
It has not yet been determined if consumers are actually concerned about advertisers tracking their surfing habits in order to display more relevant content. Since the majority of the tracking is anonymous with no individual name or physical address known, and consumers do not receive additional E-mails or solicitations from this data, it is unlikely that most people would care either way.
Personally, I would rather see content that is tailored to what I am interested in. When I visit my local Italian restaurant, the owner recognizes me and therefore recommends dishes he knows I will like. This type of personal service increases the pleasure of the eating experience and the same concept applies to the Web. Why show me ads for baby diapers if I have never searched for anything child related? By making ads and content applicable to the user, it will make the internet a more enjoyable and useful experience.
If the "Do-Not-Track" list is approved, it unfortunately seems that the impact would be negative — from a performance standpoint — for the majority of the direct response community. While most single-product Web sites generally do not serve targeted banner advertisements or show unique content to the viewer, many traffic-monitoring programs use this technology to track the number of visitors that view a site. With the implementation of multi-variant and "a/b" testing platforms that utilize the collected behavioral and targeted data, the future of direct response marketing could definitely be stifled by this proposal.
David Gervase is vice president of sales for Internet Direct Response in Apex, N.C. He can be reached at (919) 418-0908 or via E-mail at