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Promise of ad industry self-regulation falls flat

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Tue, Sep 21, 2010 at 12:00 pm

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Promise of ad industry self-regulation falls flat

I was at Google’s DC headquarters yesterday afternoon for the first event of AdWeek 2010 – the advertising industry’s annual conference in DC. I don’t know if one company always dominates the event, but this year seems to be an all-Google affair. As the only advertiser that’s a “platinum sponsor,” Google hosted and sat on yesterday’s panel re: online advertising, is sponsoring two journalist discussions about the midterm elections and politics, is making a solo presentation on mobile advertising, and will be the subject of discussion by Googled author Ken Auletta that will “take us for a ride on the Google wave.” More indication that Google is king in the online ad world.

The speakers on yesterday’s panel (including representatives of Google, AOL, the Interactive Advertising Bureau and Connections Media) were all really excited about how much better online advertising is than traditional ad mediums. Especially for micro-targeting audiences. Think you have the perfect shampoo for Latina corporate managers who live in the suburbs, drive SUVs, send their children to private schools and drink diet soda? Online ads will deliver directly to her.

While such a promise isn’t exactly new, it’s notable because it reminds us that companies that do behavioral tracking don’t operate in a bubble. What data collectors know about you isn’t limited to what they learn from following you around their website, or even what they discover by looking over your shoulder as you surf other sites on the web. They are merging all these tidbits with information collected by other data aggegators, on- and offline. AOL’s Robin Wheeler identified Experian as one of the customer databases the company uses to expand its targeting data. You know Experian – they’re the ones responsible for maintaining that credit score that you’ve never seen, is often wrong and you have little power to fix, but will also determine whether your next car loan or apartment application is rejected.

To me, it’s the way all of this data gets bundled together and shared that makes ubiquitous online tracking so disturbing. Once a consumer profile has been built, it’s nearly impossible to shake it. This might be a mere annoyance instead of a real privacy concern if the only use for the information is for Skechers to send me a sneaker ad when I search for Vans. But ‘relevant’ advertising is just the tip of the iceberg. That same information could be accessed by a prospective employer and cost me a job, a mortgage company to funnel me into a higher-cost loan, or a pharmaceutical company selling an expensive new drug for my health condition.

In response to questioning, AOL’s Wheeler and Google’s Peter Greenberger said that their companies each have a page where users can opt out of targeted ads.

But such site-based tools mean the action has to be repeated, with a difference process in a different location, for every company that tracks online behavior. What consumer even knows what an ad network is, let alone how to opt out of them? Worse, tools like Google’s Ad Preferences allow consumers to opt out of receiving targeted ads, but the company doesn’t stop tracking what those users are doing on the internet. That’s probably not what most consumers think is going on.

My question for the panel was: How do I say “Thanks but no thanks”? Shouldn’t there be a real Do Not Track Me option, so I can go to one place and block not just ads but all online tracking?

I was surprised for half a second when the head of the Interactive Advertising Bureau enthusiastically embraced Do Not Track. Then he launched into a pitch for industry self-regulation as the way to get it done. Google and AOL studiously avoided answering the question, but when I pressed them also endorsed the IAB’s self-regulation plan.

What do we get when industry gets to write its own rules and the regulators can’t enforce them? Salmonella outbreaks thanks to no egg farm inspections, and financial meltdowns due to, among other deregulatory moves, a complete ban on derivatives regulation. For just one example of the failures of self-regulation in the online ad industry, read more about PhD candidate Chris Soghoian’s investigation into the Network Advertising Initiative – where consumer opt outs were surreptitiously expiring in six months’ time.

It’s time for Congress and the FTC to act, and require not only a Do Not Track option (a concept Senator Pryor has expressed interest in) but also on other critical consumer protections to ensure consumers’ online privacy is protected. It’s time for consumers to regain control of our activities online. Download consumer groups’ letter here outlining our online privacy priorities to Congress.

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