NEW YORK (AdAge.com) -- It would be like having the same conversation -- over and over and over again.
That's how one digital ad executive describes a world where no one is allowed to collect information online, a scenario the industry is hurriedly -- and worriedly -- trying to keep from happening.
A few key members of Congress are hopped up about the online-advertising business. And while a bill, if enacted, could be as benign as requiring disclosure on who is collecting what information, it could also be as severe as requiring websites, ad networks and ad servers to ask permission before sending an ad to a specific browser or IP address, effectively blowing apart the online-ad business as we know it.
The ad industry, hell bent on putting a stop to it, has issued a set of data-disclosure and opt-out "principles" and is reminding legislators that behavioral targeting supports access to internet content, services and applications that consumers have come to expect as free.
But while the industry certainly deserves scrutiny, and life under the watchful eye of online-ad targeters sounds bad, life without them would be far worse. Let's consider for a moment that the worst fear of the online-ad business actually occurs and the use of web-tracking cookies grinds to a halt.
For starters, every time you revisited a site, you'd get the same ad over and over, including those big fat ad units you have to click to close. All your favorite sites would lose your preferences; information fields would never auto-fill; and e-commerce would become too annoying to contemplate. "If there is no information collected, it would be like a constant exchange with an amnesiac," said David Berkowitz, director of emerging media at 360i.
While the fringe of the online ad world is rife with spammers, phishers and purveyors of malware, the data collected by your garden-variety website, ad server, network and advertiser are, well, incredibly boring. The standard behavioral-targeting cookie collects the type of information that tells a site whether you prefer "national news," "Idaho news" or automotive content.
Moreover, some 80% of display ads served on the web today are frequency-capped and run across multiple websites. That means if you've seen an ad three times on CNN.com, you might just see it another two times on ESPN.com -- but only because the ad server knows you don't want to see it a sixth time. If surfers become anonymous, frequency capping would go away. Ads would get flashier and more annoying as they catered to the fraction of 1% of users that actually click.
"Certain consumers would be hammered with the kind of ads they complain about most -- a clutter of irrelevant ads," said Dave Morgan, founder of ad-targeting firm Tacoda Systems, who helped develop the industry "principles."
Moreover, some websites would go away. Aside from making the web less personal and customized, zero targeting would put the hurt on midsize publishers -- the ones not big or well-known enough to throw up pay walls or try other models.
The louder voice
The irony of all this is that even if consumers say they want privacy, their actions often belie their words -- perhaps one reason the advocates' voices have always seemed far louder than consumers' on the issue. In fact, the latest push for regulation comes as consumers increasingly give away information on social sites such as Facebook and MySpace.
None of this is to say targeting shouldn't be scrutinized and bad actors rooted out. And that scrutiny shouldn't be limited to online data, which pales in comparison to the sales and subscription data collected and sold in the offline world -- information that is actually tagged to individuals. Marketers that fail to address or respect consumers when entering into new channels are inevitably met with limitations, said Trevor Hughes, executive director of the International Association of Privacy Professionals.
Those limitations can come from regulation but also from consumers, just as the proliferation of pop-ups led to the pop-up blockers that are now standard equipment on just about every web browser. But somewhat lost in the debate is that targeters aren't the only ones who derive value from the data: Web surfers do, too.
Groups make case as Feds eye legislating online targetingThe marketing industry is taking the prospect of an internet privacy bill seriously, and last week issued a play for self-regulation, "Self-Regulatory Principles for Online Behavioral Advertising." Here's a sample of what CEOs of the major ad associations had to say about it during a visit to Ad Age last week.
What happens if your bid for self-regulation fails?
Association of National Advertisers
With state laws enacted and a bill headed for the House, is some form of regulation inevitable?
Direct Marketing Association
Why should the industry be allowed to regulate itself?
National Advertising Review Council of the Better Business Bureau
Why do you think the online-advertising issue has come to a boil in Washington?
Interactive Advertising Bureau
Do you think it's a case of bad PR?