Is the application of online behavioral targeting through the portal players an example of “smart” marketing, as a recent One Degree interviewee suggests or a “hornet’s nest” of potential privacy issues as Cyber-lawyer Eric Goldman suggests. You decide.
“Yahoo!”:http://www.yahoo.ca/ Canada’s Hunter Madsen stated in Ken Schafer’s latest “5 Questions interview”:http://www.onedegree.ca/2006/09/14/5-questions-for-hunter-madsen-marketing-director-yahoo-canada that:
bq. Most advertisers are dabbling in BT [Behavioral Targeting] these days … but the smartest players dived right in more than a year ago, and they’re pulling results that would surprise you.
Leaving aside Mr. Madsen’s objectivity in deciding which “players” get to be considered the “smartest”, I find it interesting that he is the second employee of a major portal to pitch me on “BT” in the last 2 weeks (albeit Madsen’s was an indirect pitch). Clearly, BT is all the rage in the portal community and it’s a race to see which portal player gets the most companies onto their proprietary system.
But, before we all run out and sign deals with the portals in an attempt to be one of these “smartest” players let’s do a quick review of what exactly is being proposed so we can make a marketing decision that is best for our companies and not for one that is best for the portals.
Let’s start with the question of what exactly is meant by online behavioral targeting. I’ll use the example that was used with me to illustrate behavioral targeting at work.
Let’s say that your company has a number of key activities that you would like every customer to do at your site; hit the homepage, register, purchase things, come back, etc. With behavioral targeting, you define these key activities and lay down “tags” (recognizable by a specific portal partner only) at these relevant spots on your site. Think of them like electronic mousetraps. As users walk across the tags, _snap,_ they are caught and a persistent cookie is installed on their hard drive which contains a recording of where they got to within your site’s experience. This recording is helpful information if a user returns to your site but usually the problem you are trying to fix is that users aren’t coming back to your site. Enter the portal play.
Each of the portals will say that they have a committed audience of (some number), where the (some number) will be really big and will likely include all of their properties and services (portals, IM, email, etc.). They will then say that with (this really big number) of regular users on their services, it is highly likely that at some point shortly after a visit to your site, most users will eventually be “catchable” somewhere in their net. When this occurs, the portal will be able to recognize the persistent cookie that was deposited from your site and can hit that user with a targeted ad from you meant to encourage them to go back to your site and do what you want them to do (register, buy stuff, buy more stuff, etc.). Voila, targeted ads based on known behavior with “pretty solid published results.”:http://www.imediaconnection.com/content/5556.asp
Sounds like a “smart” idea, right?
Before answering, let’s just be clear on what we are doing. We are making a recording of a user’s personal behavior at our site and then we are depositing this recording on their hard drive. We are likely doing so without their direct permission or knowledge. Further, we are then sharing this recording with our friend, the portal guy, and then allowing that friend to make money on speaking to this person is a way that acknowledges that we’ve shared this information. Does it still sound like a smart idea? Maybe or maybe not but certainly it presents us with some important questions to answer. Do you have the direct consent from the user to do all this? Would the user see this as a violation of their privacy if they knew what you were doing? How many web users are getting wise to these tricks and are guarding against persistent cookies being deposited in their computers or are taking issue with the companies they catch engaging in this type of marketing?
I would suggest that just rushing into behavioral targeting certainly does not give marketers an “A+” in smarts and should be well thought out before trying to catch up with Mr. Madsen’s accelerated class of marketers.
Hopefully, we get some good heated comments on this so I’ll stop here and leave you with a comment from a lawyer on this very topic. According to Cyber-lawyer Eric Goldman there’s a “hornet’s nest of laws”:http://blogs.mediapost.com/behavioral_insider/?p=47 that could be brought to bear on the practice of behavioral targeting if marketers aren’t careful.
Smart comments welcome.