In an attempt to make the advertising delivered to their customers more targeted several smaller phone and cable providers have been using NebuAd (Who named this company by the way? They should be looking for a job in another field.). The Wall Street Journal is reporting that privacy advocates are rising up against the level of “tracking” that occurs through this service and those of other companies, like Phorm, who is “watching” the British market in a similar fashion. These services claim to track online behaviors more thoroughly so more targeted advertising can take place. The obvious upside for the phone and cable operators is the increase in ad revenue due to the more pinpoint targeting of consumers. Sounds a bit Big Brotherish, doesn’t it?
Apparently the new services don’t just track behaviors on a few select sites but rather they follow a web user anywhere they go on the internet. According to the article:
“With NebuAd’s technology, the Web surfers are identified via encrypted computer Internet protocol addresses. The technology tracks their surfing and then lumps it into categories, such as automotive, for sale to advertisers. The data can be subdivided in great detail — for example: consumers who have browsed for convertibles in the past 30 days.”
As a marketer this sounds really cool but as a consumer it sounds a bit creepy. Online advertising is even receiving the attention of the US Senate Commerce, Science and Transportation Committee (seems like a lot of real estate for just one committee to cover doesn’t it?) who will meet on Wednesday to discuss just how much privacy violation occurs with online advertising. There’s even talk of these providers violating wiretap laws.
The long and short of this is that the implications of how this is handled could be significant. Traditional media is desperate to tie their various platforms together to target consumers across all of them. This, in turn, will make advertisers drool at the information to the point of paying big dollars for the opportunity to sell to these consumers. The industry is obviously interested in the outcome of these “investigations” as seen here:
“Everybody in the industry is looking at the NebuAd trials, and the notion of [targeting] across all their platforms,” says Craig Moffett, a telecom analyst at Sanford C. Bernstein. “This is likely to slow things down a bit.”
Oh, there is one other twist to his story. Many of the employees of NebuAd were executives at Claria (which was once Gator) who were leading adware makers. Phorm is a bit notorious for creating PeopleOnPage which has been ID’d by internet security firms as spyware. Both of those areas are big internet no-no’s and there is concern that these apples have not fallen far from the tree.
So what, right? It depends. The more marketers know about a prospect the better they can target their offerings to meet a need that exists in the market. Good ol’ fashioned free market capitalism, right? In the same breath, however, how much do we as consumers, want to be known to advertisers? I suspect this will be a personal preference issue that may involve some form of opting in for the future. In the meantime, these cable and phone operators are going to need to tread lightly when they make a “one size fits all” decision to know everything about their paying customers. Some of their customers may fight back.