How advertising can regulate itself

When you see an ad for Budweiser on TV, you know who paid for it and why it’s there. You also know it isn’t personal, because it’s brand advertising.

But when you see an ad on a website, do you know what it’s doing there? Do you know if its there just for you, or if it’s for anybody? Hard to tell.

However, if it’s an ad for a camera showingng up right after you visited some photography sites, it’s a pretty good guess you’re being tracked. It’s also likely you are among millions who are creeped out by the knowledge that they’re being tracked.

On the whole, the tracking-driven online advertising business (aka “adtech”) assumes that you have given permission to be followed, at least implicitly. This is one reason tracking users and targeting them with personalized ads is more normative than ever online today. But there is also a growing concern that personal privacy lines are not only being crossed, but trampled.

Ad industry veterans are getting creeped out too, because they know lawmakers and regulators will be called on for protection. That’s the case George Simpson — an ad industry insider — makes in  Suicide by Cookies, where he starts with the evidence:

Evidon measured sites across the Internet and found the number of web-tracking tags from ad servers, analytics companies, audience-segmenting firms, social networks and sharing tools up 53% in the past year. (The ones in Mandarin were probably set by the Chinese army.) But only 45% of the tracking tools were added to sites directly by publishers. The rest were added by publishers’ partners, or THEIR partners’ partners.

Then he makes a correct forecast government intervention, and concludes with this:

I have spent the better part of the last 15 years defending cookie-setting and tracking to help improve advertising. But it is really hard when the prosecution presents the evidence, and it has ad industry fingerprints all over it — every time. There was a time when “no PII” was an acceptable defense, but now that data is being compiled and cross-referenced from dozens, if not hundreds, of sources, you can no longer say this with a straight face. And we are way past the insanity plea.

I know there are lots of user privacy initiatives out there to discourage the bad apples and get all of the good ones on the same page. But clearly self-regulation is not working the way we promised Washington it would.

I appreciate the economics of this industry, and know that it is imperative to wring every last CPM out of every impression — but after a while, folks not in our business simply don’t care anymore, and will move to kill any kind of tracking that users don’t explicitly opt in to.

And when that happens, you can’t say, “Who knew?”

To get ahead of the regulatory steamroller, the ad business needs two things. One is transparency. There isn’t much today. (See Bringing Manners to Marketing at Customer Commons.) The other is permission. It can’t only be presumed. It has to be explicit.

We — the targets of adtech — need to know the provenance of an ad, at a glance. It should be as clear as possible when an ad is personal or not, when it is tracking-based or not, and whether it’s permitted. That is, welcomed. (More about that below.)

This can be done symbolically. How about these:

 means personalized.

↳ means tracking-based.

☌ means permitted.

I picked those out of a character viewer. There are hundreds of these kinds of things. It really doesn’t matter what they are, so long as people can easily, after awhile, grok what they mean.

People are already doing their own policy development anyway, by identifying and blocking both ads and tracking, through browser add-ons and extensions. Here are mine for Firefox, on just one of my computers:

All of these, in various ways, give me control over what gets into my browser. (In fact the Evidon research cited above was gained by Ghostery, which is an Evidon product installed in millions of browsers. So I guess I helped, in some very small way.)

Speaking of permission, now would be a good time to revisit Permission Marketing, which Seth Godin published in May 1999,  about the same time The Cluetrain Manifesto also went up. Here’s how Seth compressed the book’s case nine years later.

Permission marketing is the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them.

It recognizes the new power of the best consumers to ignore marketing. It realizes that treating people with respect is the best way to earn their attention.

Pay attention is a key phrase here, because permission marketers understand that when someone chooses to pay attention they are actually paying you with something precious. And there’s no way they can get their attention back if they change their mind. Attention becomes an important asset, something to be valued, not wasted.

Real permission is different from presumed or legalistic permission. Just because you somehow get my email address doesn’t mean you have permission. Just because I don’t complain doesn’t mean you have permission. Just because it’s in the fine print of your privacy policy doesn’t mean it’s permission either.

Real permission works like this: if you stop showing up, people complain, they ask where you went.

Real permission is what’s needed here. It’s what permission marketing has always been about. And it’s what VRM (Vendor Relationship Management) is about as well.

Brand advertising is permitted in part because it’s not personal. Sometimes it is even liked.. The most common example of that is Super Bowl TV ads. But a better example is magazines made thick with brand ads that are as appealing to readers as the editorial content. Fashion magazines are a good example of that.

Adtech right now is not in a demand market on the individual’s side. In fact, judging from the popularity of ad-blocking browser extensions, there is a lot of negative demand. According to ClarityRay, 9.23% of all ads were blocked by users surveyed a year ago. That number is surely much higher today.

At issue here is what economists call signaling — a subject about which Don Marti has written a great deal over the last couple of years. I visit the subject (with Don’s help) in this post at Wharton’s Future of Advertising site, where contributors are invited to say where they think advertising will be in the year 2020. My summary paragraph:

Here is where this will lead by 2020: The ability of individuals to signal their intentions in the marketplace will far exceed the ability of corporations to guess at those intentions, or to shape them through advertising. Actual relationships between people and processes on both sides of the demand-supply relationship will out-perform today’s machine-based guesswork by advertisers, based on “big data” gained by surveillance. Advertising will continue to do what it has always done best, which is to send clear signals of the advertiser’s substance. And it won’t be confused with its distant relatives in the direct response marketing business.

I invite everybody reading this to go there and jump in.

Meanwhile, consider this one among many olive branches that need to be extended between targets — you and me — and the advertisers targeting us.

 

7 comments

  1. Tom Myers’s avatar

    I happened to see this just after seeing Derek Thompson’s “The Incredible Shrinking Ad” in the Atlantic — an ad needs to change to be effective in the mobile space, e.g. needs to become a “full interactive engagement”; something people want to see and relate to. It seems to me that he’s describing precisely the ads that could be permissions-based, such that “if you stop showing up, people complain, they ask where you went.”

    Maybe.

  2. Terry Heaton’s avatar

    According to the ad data firm Krux, there are 50 “events” per page load this year online compared to just 10 a year ago. Just to make sure you understand, that’s every time you hit a URL, you are exposed to 50 efforts to obtain data, and not all are evident to the publisher. Data “leakage” is a big, nasty business.

  3. Lucy’s avatar

    data collection, while certainly an issue, is at least anonymous (or is supposed to be). I don’t see the industry self-regulating this one anytime soon. You’d have thought that blogger would at least have the decency to disclose certain factors , including when they are making commissions from products they recommend or link to, but often times they don’t. Some people, including Maria Popova (A regular author for The Atlantic and owner of brainpickings.org) even don’t believe this to be a form of advertising, yet the gov’t does. FTC 16 CFR, Part 255: “Guidelines Concerning Use of Endorsements and Testimonial in Advertising” Does however require disclosure.

    This blogger had an interesting “open letter” type response; http://on-advertising.tumblr.com/post/42994773187/maria-popova-have-you-made-1m-on-affiliate-ads-while

  4. Brent’s avatar

    I see data collection as a modern day equivalent to tracking register receipts. Frito-lay has done it for 25 years. Cookie tracking IMO is kin to observing in-store behavior. Did the person touch the shirt, try it on, view the display. The fact that today it happens in the convenience of one’s home is the only twist. Tracking cookies across unaffiliated sites is where it gets a little bit touchy but in some respects can be tied to capturing data in a mall and share it among the stores within.

    We  Colligent.com) are not criticised for tracking, but we do have to ensure we communicate that our observation of online behavior is clearly disclosed and that no identities are captured during our monitoring.

    Lastly, I think it is within everyone’s right to control their privacy with either browser or online settings to address comfort their personal level of paranoia.

  5. James’s avatar

    According to the ad data firm Krux, there are 50 “events” per page load this year online compared to just 10 a year ago. Just to make sure you understand, that’s every time you hit a URL, you are exposed to 50 efforts to obtain data, and not all are evident to the publisher. Data “leakage” is a big, nasty business.

  6. Richard’s avatar

    I have learned that the self-regulation aspect of advertising is not a replacement of statutory legislation, but a compliment to a current framework of law that offers proportionate protection to customers with significant advantages to consumers, governments and business enterprises. Yes, transparency and permission are of great significance to the regulatory measures for advertising. I’m taking into account the relevance of data collection as well considering the fact that there are now myriad of ads offering attractive products and services, but don’t have the same end-results. However, the best decision as to what ad is best still relies on the audience.

  7. Doug Kessler’s avatar

    Great post. One day, the online marketing industry will look back at this as the warning call everyone ignored.

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