Online Industry Needs to Be More Open About Tracking

Time for Every Web Page to Come Clean on Data It Collects From Consumers

By Published on .

Omar Tawakol
Omar Tawakol

Since the dawn of the internet websites have used cookies (tiny bits of code placed on a site visitor's computer) so that when the visitor returns to the site, it recognizes them (well, not them literally, but recognizes their computer). Cookies enables users to personalize content and page designs and enjoy features like one-click buying and customized listings such as local movie times and stocks they like to follow. Without cookies, each time a visitor returns, they would see the site's default welcome page and the personal preferences would have to be built all over again. On the internet, cookies enable advertisers to produce more relevant ads, make sure you see them just the right number of times and the proceeds help pay for content.

To characterize cookies as a form of spying (as the WSJ recently did) is misleading at best and damaging to the online industry at its worst. We need a less polarizing discussion. One side implies that cookies are evil and therefore we should all just pay for content (interestingly, most of the WSJ is behind a pay wall). The other and equally polar extreme is to say that marketers who pay the bills should have free reign to do whatever they want with the consumer's data. Both competing positions take us nowhere. We think a better solution is needed.

Sites use cookies (and other tracking devices variously call pixels and beacons) to try and deduce more about the user of the computer than "here is that browser again." Over the years, cookie tracking has gotten more and more sophisticated and now, when a consumer visits sites about baby gear, they will subsequently receive ads for strollers and baby clothes. Even though some people are annoyed by these ads, people overwhelmingly click on and buy from more relevant ads. For example, a recent survey by the IAB of the top 20 digital ad agencies that drive the majority of online display advertising, found that 70% of all display advertising dollars use some form of third party cookie (those placed by someone other than the site publisher). Simply put, advertisers need third party cookies to make sure their ads are relevant and sites need that ad revenue to fund delivery of your content.

For consumers who are unaware that sites (and other third parties) are tracking their online navigation (and often sharing this information with each other in order to serve better-performing ads), this can seem like some sort of invasion of their privacy (even though the data collected cannot personally identify consumers). And frankly I understand that reaction. The industry must do a better job of telling consumers exactly when they are being tracked and what kind of information is being collected about them.

To those who say the internet industry has no right to track their users' movements, they can choose to not be tracked (something we as an industry need to make easier for them). This does not mean they won't be served ads anymore, it means the ads will be totally unrelated to their interests (and they will get more ads and those ads will be more disruptive). For those who say ads should disappear altogether from websites, I say that would be possible if consumers would agree to pay for what they read. Clearly those who build websites and pay to create interesting content need to make money or they will go out of business. They make most, if not all of their money from advertising just like the TV networks and magazine publishers do.

Given the choice of receiving ads that are based on tracking behavior across sites or paying for content, 87.93% of more than 1,300 consumers surveyed by MarketingSherpa said "I am fine with online ads and will not pay (for content)." Think of how you would react if the next time you go to your favorite website, a notice pops up and says. "You may use this site and not see any ads if you pay $5 today (and again the next time you come), or you can use it for free if you allow us to serve you ads and track what you do here to learn more about your potential interests." I suspect I know your answer already.

Where the online advertising industry has failed, is in: 1) helping consumers understand that advertising is a fair trade for the free content they are getting on most sites (the same way TV works now); and 2) making consumers more aware of being tracked, what kind of data is being collected about them and not making it easier for them to say, "No thanks, I don't want to be tracked." Consumers are smart enough to make their own decisions. It is time that we treat them that way and give them the right to make the decisions about the ad-content trade-off themselves.

Accordingly, here is a proposal to put the trade-off back in the hands of the consumers:

Every web page that collects or shares data should be clear and visual about the data being collected. This disclosure needs to be simple and visual rather than in legalese that requires a law degree to comprehend. It should be as simple as a recycling label or a nutrition label. In addition to providing disclosure, the industry should also give consumers easy control over when, where, why and how that dataset is used.

  1. Every publisher of data should link to a preference manager at the bottom of every page with a link called "about advertising."
  2. Every ad should also have a standard icon like the little 'i' icon created by the Future of Privacy Foundation. That icon should link to a preference manager which shows you how to control your own data.
  3. There may be several different versions of these preference managers just like BlueKai, Google, Better Advertising, and Yahoo have different preference platforms. Although we prefer one standard, we believe that choice is good here -- even if it means different companies will provide different ways for consumers to visualize their data.
  4. Once this is prevalent, legislators should mandate that the only way publishers and ad companies are allowed to share consumer data across third parties is if you conform to the industry standards on transparency and control that are outlined above.

By showing consumers exactly what is known about them, we allow those who want free content to permit targeting and give them control over what data they want us to use and which they don't. Being open and clear will also allow those who don't want targeting to also turn off that data flow. As long as enough people value targeted advertising in return for free content, the whole system will continue to work.

As CEO at BlueKai, Omar Tawakol is responsible for the overall management, growth and vision of the company's exchange business. Mr. Tawakol has also worked at firms that specialize in mobile search and behavioral targeting.
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