We are currently guilty by association.
We are guilty in the online privacy war, which continues to escalate due to the NSA’s exposure in 2013. While this war has been raging for some time — almost since the birth of the Internet — advertisers and technology companies alike are coming under heavy fire due to increased scrutiny in this volatile era of online privacy. In an open letter to the U.S. government, technology companies that depend on the advertising ecosystem demanded reform on surveillance practices and policies in an effort to restore consumer trust in both themselves and the Internet.
Although the open letter outlines key principles for overhauling the use of the Internet in state-sponsored surveillance, we as an industry are missing an opportunity to hold up a mirror and examine how we, too, rely on tracking and thus have become guilty by association. Now is the time to examine how we use tracking technologies and identify new approaches and best practices, rather than simply patching flawed marketing paradigms. The good news is that there are ways to get on the right side of consumer privacy concerns, while still working toward company goals and the bottom line. But first we need to understand why the move is worth our while on all three fronts of tracking — website personalization, ad targeting or retargeting, and ad value measurement.
Why it’s time to question our tracking
It’s not the advertising industry’s fault that the NSA is spying on Internet activity, and yet, because of our current practices in “stalking” consumers across the Internet with third-party cookies and such, we’ve managed to get wrapped up and associated with the NSA data-mining disaster, further damaging our public image. Consumers are increasingly concerned that their every click is being dissected and their online lives exposed. Increased worry for their privacy is beginning to negatively affect consumer behaviors and buying decisions. In fact, 35 percent of consumers in a recent TRUSTe and eMarketer survey have gone so far as to avoid doing business with certain brands due to privacy concerns.
Along these lines, a recent Pew Internet Center survey found that the clear majority of respondents are making great efforts to mask their identities online. Looking at this data, we need to be frank: We have long had a contentious relationship with the public, and this fundamentally doesn’t help any brand’s bottom line. In the interest of rebuilding consumer trust, which is so essential to the bottom line, we need to be proactive about addressing privacy concerns in personalization, targeting and measurement.
Not only is public opinion turning, but increased legislation is also brewing, ironically from the federal and state governments, to help protect consumer interests. More than two dozen privacy laws passed last year in more than 10 states, with California passing three online privacy bills in 2013 alone. The California Attorney General’s office now has a full-time unit to enforce digital privacy laws. If the ad industry doesn’t address the privacy issue adequately itself, its hands will be increasingly tied by legislation. The question becomes, do we want to self-regulate, or have the government do it for us?
To get past the dark shadow of the NSA and looming legislation, we need to transcend the privacy/tracking conversation. There are several ways to do this, including being more transparent with consumers about the data we collect and when we are collecting it. In the case of website personalization, this transparency (e.g., prompts to remember login information for a given website, shopping preferences on Amazon.com, etc.) has been successful, on the whole. The stickier cases remain around tracking used in the name of ad targeting and ad value measurement, so I’d like to concentrate on how we address those.
The controversial sides to the tracking triangle
As I’ve already mentioned, today’s online tracking technologies work to solve three problems: Website personalization, ad targeting and measuring ad value. The latter two sides of this triangle are the most controversial.
Up to this point, online ad attribution (cookie-based path analysis) has been the paradigm for addressing these two sides of the triangle. However, flaws in this paradigm continue to emerge, most notably privacy concerns that drive consumers and the industry (e.g., Mozilla) to not participate; as well as a lack of accuracy for measuring cross-channel value across multiple devices. I am amazed by the industry’s continued myopic focus on applying this single flawed paradigm in an attempt to solve two distinct problems, with the same negative connotations.
While we’d love to track all of the people all of the time, it’s just not possible (and even more so with the raging privacy wars). The good news is that for targeting, tracking “just some” of the people is fine. Being more transparent with consumers about how they can choose to opt out, in order to alleviate privacy concerns, may result in a smaller percentage of users being targeted, but it is better to be proactive than to have government come in and prevent us from tracking at all.
On the other hand, ad measurement is a use case where tracking just some of the users is not acceptable, because it skews the data and leads to inaccurate measurement and faulty decisions. We need to deal with ad value measurement differently, regardless of the privacy debate. The industry has the opportunity, with all of its resources, to tap data that is readily available, complete and universal to all advertising channels; does not compromise user privacy; and can be employed to solve the measurement problem today. As I see it, this is possible using ad impression data, coupled with heavy-duty modeling, to identify relationships between revenue and all of the factors responsible for it.
Guilty by association no more
Only when the industry decides to change the tracking paradigm we’re currently using will the NSA controversy and associated privacy concerns no longer taint our reputation. We must stop trying to solve two separate problems — targeting and value measurement — with one faulty solution. For targeting purposes, tracking needs to become more transparent so we rebuild trust and ensure that targeting is actually driving value for consumers, and not perpetuating harm. Value measurement can and must be separated from tracking, using tools and data we already have, such as impression data measured against conversions.
At the very least, ad value measurement is a problem we can move out of the privacy shadow now, while finally delivering an effective approach that will achieve the goal. We as an industry can turn this negative time into an opportunity to begin tracking and targeting with transparency, adopt new effective ways to measure ad value and begin rebuilding trust with consumers.
Robert Cooley, CTO of OptiMine Software, has deep expertise and broad application experience with data mining and optimization technologies. OptiMine is the only cross-channel measurement and optimization platform for the multi-device world. Reach him at OptiMineInc.