Why The New Behavioral Ad Icon Matters to Webmasters

Copyright © 2010 Chip Cooper

The new behavioral ad icon will begin to appear on website ads soon. Whether or not it satisfies the concerns of online consumers and governmental regulators should matter a great deal to all webmasters.

The Interactive Advertising Bureau (IAB), acting with several other organizations, recently announced the release of an icon to appear in online ads and Web pages. The new icon - a blue square with a lowercase "i" in a circle - is intended to be placed within ads employing behavioral data and targeting (so-called behavioral ads), as well as on websites running behavioral ads. The icon will also have accompanying text that will read "Why did I get this ad", Interest Based Ad", and/or "Ad Choice".

The ostensible purpose is to notify consumers regarding the use of behavioral ads. The real purpose is to satisfy government regulators and lawmakers that the additional, potentially harmful governmental regulation is unnecessary. But will it work? A lot is riding on the outcome.

Behavioral Ads and Proposed Legislation

Behavioral ads use technology that tracks a user's surfing behavior on the Internet. Key data includes clickstream data such as searches made, content read, site-visit times, and websites visited. With this key data about a specific user, advertisers can create a behavioral pattern that can be linked to a specific online demographic, which becomes the basis for ads that target the specific demographic.

Behavioral ad proponents argue that behavioral ads pose no privacy threat because the key data collected is "anonymous". They argue that it's not tied to "personally identifiable information" (such as name, address, email address, etc.) so that privacy is maintained.

Consumers continue to be wary of websites that track their every move on the Web. They, along with their consumer advocates, argue that distinguishing between "anonymous" data and "personally identifiable information" is meaningless because some people have been identified by allegedly "anonymous" information. In addition, consumers argue that even if a person's name is not compromised, the level of information that may be compiled about a specific person is downright creepy. For example, a frequent traveler can be tracked to different locations through geographically different IP addresses, and then by combining this information with cookie data, an advertiser can draw a clear picture of the person's travel habits - destinations, length of stay, travel frequency, preferred airlines - plus much more.

Behavioral ads are now in the cross hairs of Congressman Rick Boucher (D-VA), chairman of the House Energy and Commerce Subcommittee on Technology and the Internet. In early May, Boucher co-sponsored proposed legislation that would place significant restrictions on behavioral ad marketers. If passed, advertising websites would be burdened with new regulations, and users would be inundated with disclosure notices, opt-in requests, and user information licenses when they visit websites that use behavioral ads.

Will The Behavioral Ad Icon Stop the Drumbeat for New Governmental Regs?

Under current practice, websites use privacy policies to notify visitors about the site's collection, use, and sharing of online information, including both clickstream and personally identifiable information.

The growing consensus among government regulators and lawmakers is that current privacy policies are failing to inform online consumers. Privacy policies are viewed as too lengthy and confusing to effectively communicate key information.

The growing consensus among leading Web marketers is that consumer fears about behavioral ads - heightened by the prospect of new government regulation - is holding back significant economic investment and use of behavioral ads. A new study of ninety online marketers released in May, 2010 by the Ponemon Institute indicated that despite an acknowledged return on investment from behavioral ads, hundreds of millions of dollars are being held back from online behavioral ads due to privacy concerns.

The objective of IAB and Internet advertisers is to convince government regulators and lawmakers - and ultimately online consumers - that industry self-regulation through the use of the new icon is sufficient to adequately inform consumers regarding behavioral ads without the necessity of intervention by new governmental regulations.

Conclusion

Resolving the current distrust and uncertainty regarding behavioral ads is critical to the future growth of responsible use of behavioral ads and their potential benefit to both advertisers and consumers. And ditto for the yet untapped substantial investment in behavioral ad technology and use.

How to resolve the current distrust and uncertainty is the real question facing the online advertising industry. Should the government step in, or should the industry self-regulate?

Online advertisers overwhelmingly fear that new government regulations will only exacerbate the problem. That's why the new behavioral ad icon should matter to all webmasters.