Monday, August 13, 2007

Online Marketing - Big Brother Or Much Ado About Nothing?

Did We Give Permission On Who's Analyzing and Profiting From Our Internet Behavior?

By David Miranda

Consumer databases have been aggregated for many years in both the private and public sectors. Historically this information has been protected from dissemination to third parties by law unless a consumer has agreed for it to be shared with others. Despite this fact, databases are collected and aggregated by firms and sold to other firms for lead generation, market research, etc. This is, of course, how mailing lists and telemarketing campaigns acquire their prospects. Here consumers have a modest defense - do-not-call and do-not-mail lists.

Today, however, there is a different, more powerful weapon to target consumers - the Internet.

Most web sites collect and aggregate information on visitors to their sites without the expressed permission of the consumer. Google, for example, collects and analyzes search behavior on millions of consumers daily. Imagine, for a moment, all the searches you have conducted on Google. Now consider all this search history on a Google server for analysis by complete strangers with little or no oversight other than the covenant by Google that it is only using the information properly, whatever that means.

Google has recently stated it keeps the information for only 18 months, but will reduce this time to 12 months. The question is why does it need to be kept for any amount of time and if it does what the purpose?

The new buzz word in online marketing today is behavioral targeting (BT). It means that information is collected and analyzed to create predictive models for targeting appropriate and relevant ads to consumers. The question is when did consumers agree to this? When did a consumer's search history or behavior become the property of Google to monetize?

I have used Google in this example, but only because they are the largest and most sophisticated and, one might argue, the most powerful. They have acquired YouTube and is in the process of acquiring DoubleClick, the largest online ad server. Why? Vertically integrating more information on consumers for monetization. The DoubleClick purchase is being scrutinized by regulatory authorities, so stay tuned.

The real issue here is consumer privacy in a generally unregulated medium. Will it take a major faux pas to awaken consumer concern and , if so, what will be the consequences on this powerful new medium?

Are we witnessing Big Brother or is this much ado about nothing? It's worth considering.

You decide.