The Evolution of Online Advertising Technology
More Targeting, Less Privacy (Part Two)
By Scott Buresh
Part One of this article can be found here
Even with the cookie-type behavioral advertising technology, there was a way for users to prevent these ads from targeting them. They could set their machines not to accept any cookies at all by setting their browser security setting to high. This solved the privacy issue, although many websites would (intentionally or not) render improperly with this setting on.
In recent news on the behavioral advertising technology front, Microsoft announced that its newest Internet Explorer, version 8, would have a mode called "InPrivate Blocking" that would prevent cookies from being placed on any machine. At first glance, it would seem that either:
A. Microsoft is genuinely concerned about online privacy, to the point that the company would allow users to block ads that come from the Microsoft network as well, or
B. Microsoft realized that the paltry share of the ad serving market that it currently controls is not as important as inflicting serious damage to Google, which owns a much more significant slice of the online advertising pie (in actuality, at this point, Google's "slice" looks more like Pac-Man, but I digress).
Whatever happens with this flavor of behavioral advertising, there was recently a new type of advertising technology that raised some serious eyebrows, and this one could have been the most nefarious of all.
This latest behavioral advertising technology, brought to the surface by a company called NebuAd, is aimed at tracking user behavior at the ISP level. In other words, there ain't really a whole lot you can do about it. You need your ISP to get online, so your ISP has access to the information that you are accessing when you are online. They don't need no stinkin' cookies, so you can erase them to your heart's content and they'll happily keep tracking along.
For the unscrupulous ISP, this is a no-brainer. You allow NebuAd to install its platform at your service hub and then you split the profits. And this is exactly what some of the smaller firms did in several "trials" of the behavioral advertising technology in the U.S.
Of course, there is a caveat - even a firm with cash flow problems and without an iota of ethics would probably want to create an opt-out system before unleashing this behavioral advertising technology platform on its users (you know, the people that already pay them and probably assume privacy). However, there's something very interesting about how these behavioral advertising trials were done - in just about every case, the ISP seemed interested in keeping the opt-out information as obscure as possible from its users. According to Anick Jesdanun from the AP:1
2. Embarq Corp. rolled out the platform to 26,000 of its paid subscribers. Embarq didn't bother sending any emails to its subscribers; the company merely put a general notice within its privacy notice online. A whopping total of 15 out of the 26,000 people opted out.
3. WideOpenWest (or WOW) rolled out the NebuAd platform on 330,000 customers. The only notification before the fact was a posting on the company's website, along with a reminder in billing statements to review privacy policies online. They did email the 330,000 customers to tell them about the advertising technology trial - after it had concluded. 3,355 people opted out, but that figure may be inflated, because they aren't sure how many came from a single customer. WOW indeed.
4. Bresnan Communications, LLC, tried the platform on 6,000 of its customers. Unlike the other three providers above, the company did send an email directly to its users about the trial itself (although I have no idea how it was presented and whether the info was buried in a footer somewhere) and posted notices on its website. 18 people opted out.
There were two other participants in the trial - Cable One, Inc. and Knology, Inc. For the purposes of my numbers below, I've left them out - not because they don't support the general theory, but because they don't fit the parameters. Knology won't reveal how many customers were involved and how many opted out, although the company did post a notice on its website. Cable One, Inc. ran the test on 14,000 customers, but did not give them the chance to opt out.
To sum this up, the total number of "participants" of the four providers for which we have sufficient data was 382,000, and the number that opted out was 3,473 (which may be inflated due to the WOW factor, but let's leave that alone). The total percentage of opt-outs was less than one percent. I don't know about you, but I'm guessing that the number of opt-outs would have been much higher if each of these providers had sent a piece of direct mail for the sole purpose of informing the subscribers that this type of behavioral advertising technology tracking method was going to take place and that they needed to opt out at such-and-such address. Better yet, they needed to opt-in at such-and-such address (but I'm guessing that would doom the trial from the beginning).
All testing for behavioral advertising technology at this stage has been halted - it would appear because the U.S. House Energy and Commerce Subcommittee has decided to look into the matter. Which I guess is fortunate, at least in the short term, for Google, Yahoo, and other big players in the search world. If anyone is going to be force-feeding you behavioral advertising and other targeted ads without your explicit consent, it's going to be them, not some snot-nosed little start-up.
Recently, the CEO of NebuAd announced his departure, and the company has announced plans to move forward with a more "traditional" advertising technology model (probably similar to the cookie-based platforms we're already used to worrying about). However, another company in Europe named Phorm has been having success with a similar behavioral advertising technology business model (ISP-based), but EU regulators are starting to jump into the fray.
If I had to guess, I would say that in the future any type of behavioral advertising technology on the ISP level will have to be done on a strict opt-in basis, meaning that the person has taken an action that shows that he agrees with the process. Will there be a company that emerges that is willing to provide free or very cheap broadband to people who are willing to be targeted at the ISP level? Time will tell.
(c) Medium Blue 2008