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Mandated Opt-In Could Improve Ad Targeting

Among my colleagues in the online ad business, there's a great deal of uneasiness now that online privacy has come to the attention of the Federal Trade Commission and the legislature. The practice of collecting data to better target ads has pumped new life into the lagging online ad industry and the fear, of course, is that regulations out of Washington will kill innovation and destroy a growing value proposition.

That fear is overblown. In fact, federal regulations could have the opposite effect.

What's missing from the rhetoric is the fact that better transparency and getting consumer consent with an opt-in agreement can actually lead to better ad targeting, especially when it doesn't involve the Orwellian practice of surreptitiously tracking consumer behavior online or inappropriately using personally identifiable information.

For example, I understand that when I type key words in the Google search bar, Google will serve me ads targeted to my search. In exchange, I get the search for free. It's a tradeoff we've all grown used to and the value equation is very clear. That level of transparency could also benefit online ad targeting.

Publishers need effective advertising just as much as the ad folks do. They need it fill out their business model, to subsidize the free content that consumers have come to expect. That's where "opt-in" comes into play.

If new regulations prompt all publishers to require an opt-in to view free content in exchange for appropriately targeted ads, cookies will be placed on the user's browser indicating that they have accepted the terms on site XYZ.com and can go ahead to the content. This will require a browser to accept these cookies. Then, if a user ever deletes their cookies, they will have to opt-in to those sites all over again. In other words, this requirement may actually lead to a better environment for legitimate cookie targeting, where cookies aren't deleted nearly as frequently and the user trade-off is clear.

That clarity is something I think can't be overstated. Success in this industry needs to be predicated on full transparency. That means no personally indentifying information and only above-board demographic and behavioral targeting that the top networks like Google, AOL, Collective Media and interClick espouse. If a site is contributing legitimate anonymous tracking information, consumers should know about it and the site should be "green-sheeted" as a legitimate site, period. If all sites complied, then consumers would no longer have to worry about nefarious tracking, or would at the least be well aware if a site wasn't in compliance.

I predict that user opt-in and awareness of ad relevance could even further improve advertising success by reversing much of the "ad blindness" that has been created in the past 10 years from poorly targeted ads. When you have full transparency and clarity in the way ads are being targeted, the worry of opting in or opting out isn't even necessary -- it's all about clear user tradeoffs and relevance in the user experience.

In a recent New York Times article, David C. Vladeck, who heads up FTC's Bureau of Consumer Protection, said he was perfectly willing to let the market decide -- via opt-ins -- how much ad targeting they will tolerate. "Let people vote with their feet," Vladeck wrote. "The message is you have to be more transparent about what it is you're doing."

I agree. And the industry will flourish as a result.

Russell Glass is CEO of Bizo. He can be reached at glass@bizo.com.

— Nielsen Business Media