Friday, October 9, 2009

Behaviorial Targeting: Opinion Poll and Progress of New Legislation

About five weeks ago a coalition of ten consumer and privacy advocacy organizations called on Congress to enact legislation to protect consumer privacy in response to threats from the growing practices of online behavioral tracking and targeting.

The coalition consists of the Consumer Federation of America, Center for Digital Democracy, Consumers Union, Consumer Watchdog, Electronic Frontier Foundation, Privacy Lives, Privacy Rights Clearinghouse, Privacy Times, U.S. Public Interest Research Group, and The World Privacy Forums. As I mentioned at the time, this is a very impressive coalition speaking out on a very important privacy issue at a very important time.

As I also wrote then, I would be following the progress of legislative efforts to provide some privacy "rules of the game" before the Internet, and companies ever expanding ability and desire to create extensive profiles on nearly every aspect of our lives gets out of hand.

I'm posting on this topic again today because I have yet to report the findings (announced a few days ago) of a new poll that flies in the face of the typical industry argument that "consumers want ads targeted to their interests while on the net." Now, at first glance, this seems like a reasonable assertion...that is, until consumers understand how these marketers acquire the knowledge and insight necessary to target those ads to them.

Before I get to this new poll, and the progress of new legislation in Congress, let me provide a short explanation of what in fact behavioral targeting on the Internet is by quoting a few passages from the above coalition's legislative primer entitled "Online Behavioral Tracking and Targeting Concerns and Solutions":

Privacy is a fundamental right in the United States. For four decades, the foundation of U.S. privacy policies has been based on Fair Information Practices: collection limitation, data quality, purpose specification, use limitation, security safeguards, openness, individual participation, and accountability. Those principles ensure that individuals are able to control their personal information, help to protect human dignity, hold accountable organizations that collect personal data, promote good business practices, and limit the risk of identity theft.

Developments in the digital age urgently require the application of Fair Information Practices to new business practices. Today, electronic information from consumers is collected, compiled, and sold; all done without reasonable safeguards. Consumers are increasingly relying on the Internet and other digital services for a wide range of transactions and services, many of which involve their most sensitive affairs, including health, financial, and other personal matters.

At the same time many companies are now engaging in behavioral advertising, which involves the surreptitious tracking and targeting of consumers. Click by click, consumers’ online activities – the searches they make, the Web pages they visit, the content they view, the videos they watch and their other interactions on social networking sites, the content of emails they send and receive, how they spend money online, their physical locations using mobile Web devices, and other data – are logged into an expanding profile and analyzed in order to target them with more "relevant" advertising.

Now let's get to today's article by Reuters:

U.S. marketers and consumer advocates are preparing for battle over the rules governing online advertising tailored to individual browsing habits, often tracked and collected without notice or permission. The U.S. Congress is due to intervene in the issue in the coming weeks, with a bill in the House of Representatives that would oblige websites to state explicitly how they use the information and allow those using the site to opt out. A billion-dollar industry and consumer privacy are at stake.


But 75 percent of Americans said in a recent survey they were opposed to tailored advertising if it meant their behavior surfing the Internet was being tracked...Researchers at the University of California, Berkeley, and the University of Pennsylvania who surveyed 1,000 Americans from June 18 to July 2 concluded there was a deep concern that tracking Internet habits for tailoring ads was wrong.


Targeted ads account for $1.1 billion -- up from $500 million in 2007 -- or 4.5 percent of the overall $24.5 billion dollars projected for online advertising in 2009, according to eMarketer estimates. In Washington, Democratic Representative Rick Boucher and other House members are introducing bipartisan legislation later this year aimed at helping consumers better understand what information is collected about them and how it is used.


The bill would oblige websites to display a privacy policy and explain to users how their information was collected and how it would be used. It would also require sites to allow visitors to opt out of having their data used to create an advertisers' profile.

Last winter the Federal Trade Commission published guidelines for advertisers, which prompted the ad industry to put out its own set of self-regulatory principles in July. Government agencies and consumer advocates argue that some form of regulation is needed to inform and protect consumers when they go online.


Consumers have been tracked and followed by advertisers in the offline world for generations, often through credit card information, or supermarket cards. But the Internet raises the stakes because "people are living their lives online, for essential transactions," said Jeff Chester, of the consumer protection group Center for Digital Democracy.

Click here to read the article in its entirety.

To read a couple of my past, and more extensive posts on this topic, go here, and here.


Patrick said...

Not sure I would state that the poll conducted is legitimate or an assessment of a privacy revolt. Authors were known privacy advocates with personal profiteering focus. Further, the study showed serious limitations in respondent qualification and the authors deliberately decided not to expand on how the sample was selected. We really need a third party to conduct this type of study where there is no monetary gain available to the individuals conducting the study other than the check they receive for their work product.

CFC said...

I agree that this poll does not indicate a "privacy revolt". My point was simply that once people understand what is done with their personal information, they begin to feel a whole lot more protective of it...and supportive of basic, common sense regulation. I think the key is that the supposed "benefit" of having targeted web ads directed at the consumer - once they understand how the businesses are able to target them that way - doesn't outweigh the desire amongst a clear majority to be more adequately informed of their choices and enjoy increased power to control what is done with their private information(i.e. the right to opt-in for instance).

While I agree that more polls and study should be done on this issue (and others), and using a different sample is fine by me, I see nothing in these findings that don't ring both true, credible and even obvious. On another note, I'm not sure what you mean by "personal profiteering focus", but I can say I know the people personally that conducted the study, and yes, they are privacy advocates, but they are not "profiteering" off this poll, and nor would they skew research to suit some underlying ideology.

A poll conducted by academics that believe in the individual's right to privacy and the full disclosure of what's being done with their private information in order for others to profit is in no way analagous to say, a poll funded by big business interests that stand to make millions more if their study supports a pre-desired conclusion.

I'll be watching for additional research in this subject area and post it here as it becomes available...