This is the summary of an article by Michael Garrity. It talks about the Federal Trade Commission’s involvement in how online companies may or may not use user data, which gives online advertising its intrinsic advantage over offline advertising. Here’s the link to the original behavioral targeting article: Tracking the Behavioral Targeted Ad Debate.
Online advertising is advantageous because it allows publishers to provide ads to the right customers. These are ads that are in line with the personal characteristics, interests, geographic location, and other aspects of a certain individual. The effectiveness of the ad rises for both the consumer and the marketer.
Many Web users, however, are put off by the tracking that is done which reveals their interests and behavior online. As such, advocacy groups have demanded transparency in behavioral advertising. This demand has paved way for the involvement of the Federal Trade Commission, or FTC. One of the commission’s contributions toward the matter is the Final Privacy Framework Report, which outlined what is and what isn’t allowed when it comes to companies using consumer data from the Internet.
The online advertising industry also has two self-regulatory commissions: the Digital Advertising Alliance or DAA, and the Network Advertising Initiative or NAI. Online advertisers will have to face the fact that this is a real issue. For example, 73 percent of consumers surveyed by Pew are not in favor of receiving personalized advertisements at the expense of stored searches in search engines.
The infographic below, created by Loeb & Loeb, discusses the number of people that opt out of behavioral targeting services. During the past 4 years, 10 million users have visited the opt out website of NAI. While that number may not be too many in a 4 year span, it is well worth noting that 5.9 million of those users are from just last year. Out of that number, close to 1.75 million actually opted out of tracking using cookies. The real question is: how should marketers go about serving targeted and effective ads, given that most users don’t want to be behaviorally tracked?