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Consumers may enjoy interacting with friends, acquaintances and strangers across social media channels, but that doesn't mean they trust them as a source of advertising. However, a new host of companies are connecting brands to consumers through their social connections. Just as behavioral targeting has come under fire for tracking consumers online without their knowledge, companies that serve ads to individuals based on something someone in their social network has done will have to tread lightly to avoid regulation and consumer ire.
But that isn't going to stop companies from diving in head first.
In the battle to follow consumers and serve them better advertising, behavioral tracking has been getting a bad rap. And as privacy and consumer advocates' concerns grow louder, regulators and corporations are listening (and changing their policies), which is also making anonymous tracking less effective.
According to a study by Scout Analytics out today, new updates to the Flash interface are making it easier for consumers to opt out of online cookies. That means that Flash, once seen as the barometer for following consumer surfing habits, is becoming less useful for tracking people online. And that is only likely to get worse.
By now it is clear that privacy advocates and Federal Trade Commission employees don't like behavioral targeting. Online marketers are increasingly trying to steer clear of regulation on the matter, with clearer opt out policies and self-regulation. Google is going one step further, by trying to rebrand BT with a new name.
Today the search giant is opening up its "remarketing program" so that all advertisers can track consumers and serve ads dependent on their browsing history.
Calling behavioral targeting by another name isn't likely to work when regulators come down on the practice of tracking users online for marketing purposes. But at this point, it's worth a shot.
As if there weren't enough reasons for marketers to fear that federal regulators might turn off the behavioral targeting spigot, a new study claims that BT advertising is starting to deliver on those promises that advertisers have telling privacy advocates about. Conducted by online marketing cooperative Network Advertising Initiative, the study found behavioral targeting to be more than twice as effective as non-targeted ads.
Furthermore, they saw the benefits of behavioral targeting grow over the past year.
It's funny how the federal government's position on behavioral targeting changes when it wants to use the information gathered. According to CNET:
"The FBI is pressing Internet service providers to record which Web sites customers visit and retain those logs for two years, a requirement that law enforcement believes could help it in investigations of child pornography and other serious crimes."
Twitter is over three years old and many people still don't get it. Just last week, The NewYorker's George Packer called it “crack for media addicts.” But will real-time oversharing services make it into the mainstream?
At The Future of Space and Time talk during Social Media Week in New York on Wednesday, panelists from the tech world noted that conditioning larger audiences to share their real-time info and location will be necessary for such technologies to truly take off.
And for advertisers, this could be the key to actually serving those relevant ads everyone's always talking about.
With increased scrutiny from the Federal Trade Commission, online advertisers and those who work with them are providing more options for consumers in efforts to ward off regulation on the industry. Last week, the Internet Advertising Bureau launched a new campaign meant to discourage irrational targeting fears. And today Yahoo launched a tool that will allow consumers to control the marketing messages they receive online.
Neither of these moves guarantee that regulators will backoff legislating online advertising, but advertisers are hoping that informing consumers will prove their best bet to avoid privacy laws. If they succeed, it will also lead to better advertising.
The future of behavioral targeting is in danger. With an ongoing Congressional investigation and growing privacy concerns, it looks as though consumers and regulators are not keen to have advertisers track web surfing behavior online. But there's another side to the story — does behavioral targeting even work?
The idea is that by following users online, they can get a clearer idea of people's buying habits and serve more relevant advertising to them. If that is not true, the case for behavioral targeting falls apart. And if preliminary results from Google's nascent attempts are any indication, BT does not appear to be working for the search giant.
Behavioral targeting has been batted around by privacy advocates and regulators over the last year, but a new study from professors at the University of Pennsylvania and the University of California, Berkeley has found that consumers not only want nothing to do with BT, they aren't interested in its side effect: better targeted ads.
The calls for tough government regulation designed to protect the privacy of internet users are getting stronger in the United States. But could there be unintended fallout if regulations are implemented?
Jeremy Liew, a managing partner at VC firm Lightspeed Venture Partners, thinks so. In his opinion, the impact of the level of regulation that is being demanded "would be enormous for companies relying on online advertising".
In the ongoing debate over behavioral targeting methods online, the subject of consumer preference is a thorny issue. Most consumers don't opt out of sharing their information with advertisers online. Is that because they don't know how, or because they don't care what happens with their info?
This Spring, ad network Fetchback instituted a new ad format that made it easier for consumers to opt-out of its advertising. So far fewer consumers are taking that route. If the data is to be believed, consumers don't seem to mind sharing their data.
But unfortunately for advertisers, consumer sentiment may not have much sway with regulators when it comes to behavioral targeting.
Congress's ongoing investigation into online privacy concerns could spell trouble for online advertising. Many Congressmen and consumers would like to see less of their data being shared online, but advertisers argue that tracking users online helps serve more relevant advertising. If a rumored opt-in requirement from the FTC goes through, behavioral tracking could cease to exist as we know it.
Zephrin Lasker thinks that the key to online advertising is making it opt-in. As CEO of online lead generation company Pontiflex, Lasker wants to see more transparency in online advertising. I caught up with him to talk about how another FTC investigation changed the face of online lead generation and what the current Congressional inquiry could do to advertisers who rely on behavioral tracking.