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What's next in behavioral targeting?

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Behavioral targeting is undergoing some significant changes. With its recently proposed do-not-track legislation, the Federal Trade Commission has taken a bold stand and proposed to give Web users a new level of control over their online data, including the ability to opt out of all tracking of their online behavior by third parties. Google, Microsoft Corp. and Mozilla are updating their browsers with capabilities to allow consumers to manage their privacy with the click of a single button.

An obvious problem is, if a marketer had no knowledge of the types of viewers coming to his or her site, it would likely be a barren landscape, one lacking content and advertisements that are relevant to the sites' visitors. In addition, many free services are ad-supported. If marketers can no longer effectively target buyers, the fundamental premise of free Internet content dissemination could change dramatically.

With the FTC's shadow lurking, what does the future of behavioral targeting look like?

Most users would agree that targeted advertising improves their online experience. Amazon.com's ability to make recommendations on things consumers may like based on purchase patterns is just one example. What causes the greatest concern for users is the sharing or selling of data to third parties, or many other websites, without their consent.

In the future, users will opt in to these targeting capabilities and be told clearly and upfront what data is being collected on them and how it is used. After the data has been collected, consumers will also be able to opt out or “clear” the data about them on file so that they can no longer be targeted, should they change their mind.

Data collection itself is not the issue, but data collection techniques are. Rather than having websites unilaterally stop tracking users, users will be given an option. If they understand how their data is being used, and are not surprised by the way they are targeted, they will likely find tracking to be beneficial.

One way to achieve this is to have users voluntarily share their brand affinities and psychographic preferences, which will create a profile for each user. Such a profile would enable content owners and advertisers to serve up custom content and ads based on a user's preferences. Users benefit because they are able to provide direct input to their brand and psychographic preferences.

This can help in another way. Currently, many users are targeted based on data that has expired; for example, they've already bought what they original searched for, so future targeted ads would no longer be relevant. However, knowing from a self-reported profile that someone has a brand preference is valuable, representing a long-term affinity.

Collecting data from individuals helps protect their privacy and ensures the quality and timeliness of the data.

Most Web users are willing to exchange information for content, and we can expect this trend to continue as better targeting techniques are deployed. Regardless of the FTC's ruling, the implications for marketers and publishers seem clear: Successful ad targeting and customer engagement will be accomplished by giving users transparency, information and control.

Leighton Webb is senior VP-U.S. managing director at behaviorally tracking technology company VisualDNA (www.visualdna.com). He can be reached at leighton.webb@imagini.net.

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