It seems the game may be over for behavioral targeting at the ISP level. NebuAd, one of the most vocal of companies in this space, announced last week that their CEO had resigned, and they were abandoning their plan to offer ISP-level behavioral targeting. Although their technology promised truly anonymous profiles and behavioral targeting, they couldn't get past the backlash over privacy implications -- given their technology essentially profiled each ISP users' entire browsing behavior for the purpose of showing targeted ads. Users could opt out of ads but not the profiling.
NebuAd isn't the only company suffering (dead?). Adzilla, a company offering similar technology, took down their Web site in favor of an "under construction" message, while they plan the "next evolution". And Phorm, the only company public in the space, has seen its stock price fall 85% this year as a result of a PR debacle and consumer backlash in the UK known as the "Phorm Storm". If you think back to the adware/spyware days, those companies earned a similar fate -- justifiably.
But wait, it's not just these companies doing behavioral tracking and targeting! Amazon tracks what you purchase and what products you're reading about. Facebook tracks other Web sites you go to, who your friends are, what products you buy, etc. Google knows more about us than any site on the Web, based on the data they collect about YOU via their search, toolbar, maps, gmail, docs, AdSense, analytics, ad serving and DoubleClick properties.
So what's the difference? When is this ok with consumers, and when is it not? What will be the next major backlash?
I believe today it comes down to trust, freedom of choice and end-user value. And very soon I think it will also come down to end-user transparency and control.
For any kind of online need/desire, Web users have unlimited choice -- there are literally thousands of Web sites that can meet any specific need. And most of them are free! As a result, Web users pick a site, decide if they like it, and either leave or come back. They know that "free" is usually accompanied by advertising, and they know that better-targeted advertising benefits the site. As long as the site offers them value and doesn't violate their trust, they're not apt to raise a big fuss over the Web site's effort to make money -- they can always go to another site, after all. And in many cases, the Web site can use behavioral information to add further end-user value.
Users don't have a lot of choice with their ISP, and they're already paying for the end-user value. By surprising users with profiling across ALL page views, and clearly not thinking in terms of the user's best interests, they then also violated users' trust. Triple whammy! See the difference?
That said, Web sites and ad networks are getting more sophisticated in their profiling efforts. And certain Web sites (ahem, Google) are getting uncomfortably powerful in terms of data collection (whether or not they assemble behavioral profiles). This is ok -- the best behavioral profiling can and should result from a position of trust between the end-user and the Web site they chose to visit.
However, I think the next backlash will be with one of these major sites. It's my belief that by the end of 2009, a major disruption in end-user trust will occur, such that end-users will begin to demand full transparency and control (being able to see and control what data a given Web site has collected on the user). By that time, will the major behavioral data powerhouses even be able to open it up? Or will the act of opening it up just freak everyone out?
I know one thing -- in anticipation of end-users demanding transparency/control and (regardless) in an effort to do right by partners and end-users, Others Online is fully transparent now and always has been.
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