More Bad News for Behavioral Targeting

I’ve argued many times now, there’s momentum toward some sort of regulation of behavioral targeting. And now in my best “Yoda” voice: regulation is coming, prepared must you be. More support for regulation comes in the form of a new survey reported in the NY Times:

About two-thirds of Americans object to online tracking by advertisers — and that number rises once they learn the different ways marketers are following their online movements, according to a new survey from professors at the University of Pennsylvania and the University of California, Berkeley.

The professors say they believe the study, scheduled for release on Wednesday, is the first independent, nationally representative telephone survey on behavioral advertising.

Here’s what the report itself says:

  • Contrary to what many marketers claim, most adult Americans (66%) do not want marketers to tailor advertisements to their interests. Moreover, when Americans are informed of three common ways that marketers gather data about people in order to tailor ads, even higher percentages—between 73% and 86%–say they would not want such advertising.
  • Even when they are told that the act of following them on websites will take place anonymously, Americans’ aversion to it remains: 68% “definitely” would not allow it, and 19% would “probably” not allow it.
  • A majority of Americans also does not want discounts or news fashioned specifically for them, though the percentages are smaller than the proportion rejecting ads.
  • 69% of American adults feel there should be a law that gives people the right to know everything that a website knows about them.
  • 92% agree there should be a law that requires “websites and advertising companies to delete all stored information about an individual, if requested to do so.”
  • 63% believe advertisers should be required by law to immediately delete information about their Internet activity.
  • Americans mistakenly believe that current government laws restrict companies from selling wide-ranging data about them. When asked true-false questions about companies’ rights to share and sell information about their activities online and off, respondents on average answer only 1.5 of 5 online laws and 1.7 of the 4 offline laws correctly because they falsely assume government regulations prohibit the sale of data.
  • Signaling frustration over privacy issues, Americans are inclined toward strict punishment of information offenders. 70% suggest that a company should be fined more than the maximum amount suggested ($2,500) “if a company purchases or uses someone’s information illegally.”
  • When asked to choose what, if anything should be a company’s single punishment beyond fines if it “uses a person’s information illegally,” 38% of Americans answer that the company should “fund efforts to help people protect privacy.” But over half of Americans adults are far tougher: 18% choose that the company should “be put out of business” and 35% select that “executives who are responsible should face jail time.”

People are saying very explicitly that they don’t want targeted (read: relevant) ads. Also, look that the punitive attitudes in the bullets at the end.

There’s a clear difference between attitudes and behavior. People don’t want to be tracked but the do respond to targeted ads and deal offers, etc.

This survey will be taken as conclusive proof of the need for regulation — conclusive. The only question will be about the burdensomeness, the disclosure requirements, etc. Search advertising will be largely unaffected (although data retention will be an issue for search engines). It’s display that will suffer as a result.

Who disagrees with me?

___

Thanks Kevin Lee for pointing me to the IAB self-regulation statement. But as George Bush the first might have said, “That’s not goin’ ta do it.”

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19 Responses to “More Bad News for Behavioral Targeting”

  1. Report: Most People Don’t Want Online Tracking Even If It Means Relevant Ads Or Savings Says:

    [...]  although the search engines’ data retention policies are implicated by the report (which I quote a bit more fully on my blog). Yahoo is using search queries as part of its behavioral targeting and Google not long [...]

  2. Josh Walker Says:

    This is a great post, Greg. I will start by saying, this is a huge and complicated issue. Everything about these findings from a research perspective must be understood — sample size, motivation of the universities to produce this study, conditions of questioning, etc. You know the drill.

    Without knowing more about this survey, I can say the findings don’t surprise me. If I was asked, “do you want websites to know more about you so you could get better ads or offers?” I would say “no” every time. Why? Web ads are terrible, and the only time they seem targeted are when they seem creepy. I worked at Forrester in the late 90s and learned tons about early personalization efforts, and then I worked at Choicestream — one of the leaders in what advanced mood and behavior analysis. Those guys are really smart. They could tell you if a song you were listening to online was “sad”. The success metrics I’ve seen over my career would change this behavioral sentiment and these findings IF vendors employed behavioral targeting correctly. Since they won’t, we can look forward to lots of ad networks getting their maximum fine.

    It’s frustrating to see the market so out of alignment with this opportunity. Thanks for the post, Greg.

  3. Greg Sterling Says:

    Josh:

    We can pick apart the methodology — differently worded questions might have produced a different outcome — but the point is that this will be seen as credible and be the support that legislators and others need for regulation.

    • Josh Walker Says:

      The research geek or lawyer-who-couldn’t-get-into-law-school that lives somewhere in me would love to pick apart the methodology on this one. Just read the report and the research bias is all over the place. Problem is, like I said, I think they’re right. Marketers have made this bed. It’s why opt-in email marketing remains a safe alternative for us and others Daily Candy, Thrillist, Groupon, etc.

  4. privacychoice team Says:

    Great post — the era of self-regulation is over.

    Here’s a good way for any website to get ready for what’s coming: figure out who’s collecting user data through your site and what they do with it.

    http://www.privacychoice.net

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  8. Paul Zeckser Says:

    I wonder how “permission marketing” fits into all of this? What if marketers came to the consumer offering more transparency? Marketers should acknowledge that collecting this information about a consumer is more valuable to us, so we should in turn reward consumers who allow this with better discounts / better targeted offers. Alternatively, consumers that don’t want to participate in sharing their web behavior, don’t have to (but they also would not have access to the same level of discounts). Put the consumer in charge of telling the marketer how comfortable they are with sharing information, and make sure the consumer understands the benefits if they decide to share.

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  11. dogma Says:

    Question: Many companies are doing call tracking within their online ads. Consumer sees the ad, calls the tracking # and connects to the business. Caller ID is returned to the marketer in their reporting. Targus and others append consumer demographics to the Caller ID for the marketer, and the marketer can then hone messaging/retarget.

    This seems outside of this conversation? Or will it get dragged in as well?

  12. Greg Sterling Says:

    Ed:

    Think the “offline” stuff is right now not part of the conversation but it will likely come in as online marketers say “hey what about all this offline stuff that’s been going on for years and nobody’s upset?”

  13. Terry Howard Says:

    Matt Cutts had a pretty good analysis of the study:

    http://www.mattcutts.com/blog/studying-a-study/

    It looks to me like it’s pretty biased based on the questions asked and who was asking them. I agree though, the damage is done and people forming opinions and legislatures passing regulations from a position of ignorance is unfortunately the rule and not the exception in today’s America.

  14. Greg Sterling Says:

    Terry:

    To attack the study is a losing proposition for online marketers. There are other studies (I’ve done several) that show similar things or the same thing.

  15. Terry Howard Says:

    Oh, I agree with that attacking the study is not constructive. I think we should keep in mind though that these “studies” sort of pale in comparison to the decades of ongoing daily studies by hundreds of thousands marketers that definitely say that people in their heart of hearts don’t really mind ads, don’t mind things like cookies, and do in fact respond to them. You can ask people until you are blue in your face if they like or don’t like something, the fact remains their behaviors and actions are the real poll.

    I think if the study was done of people who actually have a clear understanding of what it is they are being asked about it would make sense, but in reality you are just asking people to give their knee jerk fear-centric reaction to something they have no understanding of. You might as well be asking them if they enjoy alien probing. I think there is information to be gained from such a study, but the takeaway should be, we need to educate people to dispel their irrational fears, not regulate from a position of it.

  16. Matt Lillig Says:

    I think adding in the phrase “collection of anonymous user data” might change a few minds in this study. Don’t forget, there is also a significant sample size of people that don’t want to be tracked because of the types of sites they are visiting (adults sites, gambling sites, etc.). So of course they are going to say they don’t want to be tracked.

    People have to remember that they’re being tracked all of the time. Your credit/debit card company tracks every transaction you make and where you made it, your grocery store tracks every purchase you make if you use a store savings card, your gps tracks your location, etc.

    But there are benefits and payoffs to being tracked, yet we don’t question them all of the time. In case of credit cards, how many of us have been able to track down fraudulent charges thanks to each transaction that shows up on our records? With our grocery store saving cards, do we complain when we save $25 or more on a cart full of groceries? Or how about when the store has our favorite bag of chips because the store tracked all purchases that were made and properly restocked the shelves? Don’t we hate it when something is sold out? Do we complain when our car GPS navigation systems help us find the closest gas station when we are running low on a tank of gas?

    Without tracking you anonymously, these trade offs don’t happen. We take anonymous tracking for granted in my opinion.

    Keep that in mind.

  17. Terry Howard Says:

    Very well said Matt.

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