Before I launch into my next rant, thanks to each of you who either responded to my first post or who sent me a private note supporting my new adventure… The issue of behavioral targeting and consumer privacy is heating up in a big way… Given that I was recently appointed to the Government Relations Committee for the AAAAs to advise on the subject, I thought I’d open it for discussion via my blog. Last week, Harris Interactive released a survey citing that the “a majority of U.S. adults are skeptical about the practice of websites using information about a person’s online activity to customize website content.” 59% of those polled are either ‘not at all comfortable’ or ‘not very comfortable’ with companies using personal information or a user’s web surfing activities to serve targeted marketing and advertising messages. The survey was also quick to point out that with greater privacy protection and security policies in place, consumers “become somewhat more comfortable” with their personal information being applied for marketing purposes. The Harris Interactive Study references the web’s largest players – MSN, Yahoo! and Google – as examples of the kinds of sites that are currently leading the behavioral targeting movement.

While these findings – at first glance – might suggest that consumers are growing wary about how marketers are using personal information to target customers, it’s important to distinguish between the different kinds of ‘behavioral targeting’ strategies that are currently being applied by marketers: While the anonymous behavioral tracking strategies and tactics applied by MSN, Google and Yahoo! have established the initial benchmark for collecting online behaviors, the real issue behind consumer’s fears and discomfort with these practices is the lack of transparency and the inability for user’s to opt out of such monitoring. This is an issue to watch carefully as legislators and lawmakers wrestle with how to regulate – or not regulate – marketers in this new digital landscape. A few weeks ago Assemblyman Richard L. Brodsky, the sponsor of a New York bill to limit how companies collect data on computer users, put forth legislation that would fundamentally change the current paradigm. While the issue of anonymous behavioral tracking is a very real concern for both consumers and marketers alike – an issue that is very much in its infancy – I’m fearful that other types of behavioral-targeting methods are being unjustifiably included. I’m speaking specifically of user-recommendations (think Amazon.com) and social-networking referrals (think Facebook, but not the first iteration of Beacon). To be clear, what I’m referring to here is not typically considered ‘behavioral-targeting’ but if you consider Amazon’s recommendation engine – factoring in your historical purchases with those of consumer’s who have purchased the same or similar products to offer you relevant suggestions – the model is similar to those of the large portals, but the difference is that it’s only happening within a closed-system… The social-networking commerce model is also in its infancy and Facebook’s disastrous launch of Beacon underscores how little marketers understand how to exploit this growing phenomenon. Beacon’s failure to clearly notify users of the service – and what it does – coupled with its hidden opt-out controls, effectively replicated the model of the big portals which of course erupted into a public relations nightmare and alienated an untold number of loyal Facebook members. Facebook’s failed Beacon strategy aside, the more interesting dynamic is the fundamental shift in user behavior that social networking has produced: social networking sites have helped to shape the Me-Economy and with it, a new generation (and some from older generations too) have flocked to these online destinations to publish, promote and otherwise bring attention to themselves. The fundamental shift that has occurred is that consumers are now defining and segmenting themselves into specific groups and categories – now overlaid with hyper-detailed pieces of personal information – that allows marketers to reach these consumers with targeted, relevant marketing content. My contention – essentially – is that participation in social networks and/or the use of other free, web-based services are intentionally constructed to enable behavioral or targeted marketing. There are of course trade-offs, and if consumers expect to access free online services, they should expect these services to come with a cost – however, the costs shouldn’t be an unwanted or uncontrollable intrusion of the user’s privacy. The issue of behavioral tracking and the role of marketers in the digital age is complex, ever-changing and, at times, highly emotional. This post is not attempt to wrangle the issue to its knees, but rather, to expand the context around the topic of behavioral targeting in general, and the growing concerns about online privacy specifically. Let me know what you think.