A kind of customer profiling in online firms is called behavioral targeting. This method uses 3rd party cookies to know the browsing behavior of users. This method is quite effective, but some concerned citizens are calling it an invasion of privacy. This concern is even more prevalent with the cooperation of Internet service providers (ISPs), who intercept web traffic without user consent. This is the summary of an article by Daniel Rice, which discusses a simple solution involving user compensation in light of privacy concerns over behavioral targeting. You can get the PDF of the behavioral targeting article here: Behavioral targeting and economic compensation
Dangers of shared information
Individuals can provide online information about themselves to help the cause of businesses and other organizations. For example, individuals may share information about how many times they drink alcoholic beverages in a day. This helps doctors make better diagnosis, but also exposes the individual to abuse because of that shared information.
Targeting for online marketing
The essential elements to targeting are looking for the right targeting segment and handing out the right advertisement towards that segment. These elements make advertisement much cheaper, because advertising companies don’t have to bombard individuals with undirected advertisement; they will just focus on the individuals who are most likely to respond to their advertisements. They do this by implementing behavior profiling, which obtains several kinds of information from users, including, site registration data, keyword searches, demographic data IP address, country, zip code, history of ad exposures, among others.
Privacy concerns for behavioral targeting
Online advertisers resort to other ways to obtain information if the former doesn’t work out. They can use behavioral targeting, which cooperates with ISPs involving secret collection of user data. As expected, privacy advocates are on the watch. They even appealed to the government to appoint a privacy czar. This wasn’t approved but privacy was listed as top priority, and measures were done to secure privacy, specifically online trust issues. On the other hand, surveys show that trust is still a concern among majority of individuals.
Economic compensation as a solution
One simple solution to this problem is for advertisers to compensate users for allowing them to obtain third party information using behavioral targeting. For example, when a user visits the website, http://www.getstuffforless.net, that user will receive some form of compensation if he lets advertisers get info from him. More compensation will be awarded if he pries deeper into the website with a much more detailed URL, such as http://www.getstuffforless.net/watches/designer/gold.
This economic compensation model should allow three things: 1. 3rd party marketing bases their compensation on browsing info. 2. Users will allow this. 3. Fair and secure compensation. However, cheaters, who may use strategic browsing to increase personal revenues, in the user end should be considered. One way to deal with this is by setting a monthly or daily compensation limit. Anomaly detection technologies can also be used for this concern.