Why Online Behavioral Advertising Is the Most Consumer Friendly

Consumers Can and Do Control Who Targets Them When Online, and That's a First for Advertising

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Jay   Habegger
Jay Habegger
Online targeted display advertising is the form of advertising that is the most respectful of consumer privacy and of consumer wishes as a whole.

This must seem a radical statement given The Wall Street Journal's "What They Know" series, the New York Times editorial calling for a federal Do Not Track list, and December's FTC report on privacy, all of which sound a shrill alarm on the risks to consumer privacy from online, interest-based advertising.

Cookies, anyone?
The fact is that online, interest-based advertising is the only form of advertising that puts the control 100% in the hands of the consumer. Ours and other companies that provide targeted online advertising services adhere to privacy best practices, and we all provide a simple opt-out for consumers. The backstop to all of these efforts is the fact that the targeting in question fundamentally depends on a cookie placed on the consumer's computer -- and therefore fully under his or her control at all times.

To end targeted advertising -- at any moment a consumer chooses -- consumer need only delete their cookies. A consumer can even delete selected cookies. Privacy advocates say this feature is "hidden" or too complicated for the average consumer. But popular browsers, such as Firefox, provide menu items one click away from the main menu that enable anyone to delete cookies and browse in private. Popular security software provides built-in features for regularly scheduled cookie deletion. Any consumer who knows how to buy something online knows how to manage cookies or even manage his or her browsing history. This isn't as complicated as the so-called privacy advocates would have us think.

No other form of advertising offers consumer the level of control this implies. I can't control the print advertisements I see in magazines or newspapers that are targeted based on data collected offline (other than by not reading the publications). I can't avoid targeted direct mail, or control which direct mail I get, despite various attempts by the DMA to institute a Do Not Mail list. Let's face it, none of us can avoid spam, despite Can-SPAM, and the "Do Not Call" list only applies to certain firms, but not to nonprofits and certainly not to the political campaigns whose recorded messages so often interrupt our family dinner. Compared to just about every other form of advertising, online, cookie-targeted display advertising looks pretty consumer friendly.

Where is the market failure?
Most regulation is driven by market failure. The idea is that there are situations where the market can't deliver the outcome desired by a plurality because of an inherent flaw in institutions or incentives. These situations, market failures, require a government to step in.

There is an increasing drumbeat from government agencies and politicians about the need to regulate online cookie-targeted advertising. The implication is that the market has failed, so the government needs to protect the consumer.

The history of regulation is replete with robust debates as to whether the market had or had not failed in a particular instance, and therefore whether or not the government truly needed to intervene. The situation around cookie-based online ad targeted is not one of these cases. There is simply no market failure. The companies involved have provided mechanisms for managing any targeted ads that may be displayed, and consumers themselves have easy and absolute control over any cookies placed on their computer.

No, really: Where is the failure?
The only failure that I'm aware of is the failure of privacy advocates and certain legislators to find any harm done to consumers. Even the aforementioned NY Times editorial confused data-scraping with behavioral advertising -- and the Times should know better, because it employs more behavioral tags on its site than most publishers.

We're told that the opt-out facilities provided by interactive media and marketing companies are too complicated. We're told that cookie deletion in the browser is too difficult. But, as described above, these steps are pretty easy. The real frustration of privacy advocates seems to be that most consumers don't care enough even to take these steps. This frustration is driving the desire for the government to step in and "fix" a failure that doesn't exist.

I don't believe consumers are as dumb as privacy advocates make them out to be. An alternative interpretation of the current situation is that consumers can manage their own browsing experience, and they've by and large voted with their mice. Consumers have concluded that tons of free content and great applications coupled with full control of their browsing experience via their browsing software is a pretty fair deal.

Jay Habeggeris the CEO of OwnerIQ.
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