Online Privacy: Who Watches the Watchers?

By Mar 28, 2011

To paraphrase Churchill, we haven’t seen the end of the battle over control of online privacy, or even the beginning of the end. But recent moves may at least signal an end to the beginning. The major players have planted their flags and are unveiling their strategies. Now it’s a question of which solution will prevail.

The tussle pits two broad groups against each other: marketers who want to know as much as possible about their online visitors—what they search for, where they go on the web, what they have read, how they behaved last time on the site and so on; and consumers who are increasingly wary of what information is being collected about their online behavior, and of marketers’ ability to retain, combine and sell that information to third parties.

Last October, the Digital Advertising Alliance (a handful of trade groups including the Interactive Advertising Bureau, the Direct Marketing Association, and some of the largest groups representing ad agencies, ad networks and national brand marketers) formally rolled out a plan to let the marketing industry police its own tracking behavior, in the hope of fending off efforts from regulators that might amount to a Do Not Track mechanism.

The plan revolves around an “Advertising Option“ icon placed on ads and web pages that drop software cookies and track them during future visits to compile infor¬mation on the user, whether or not that information is used to deliver an ad. Users can click on the blue-arrow icon or something equally clear to be taken to AboutAds.info/choices/, a DAA landing page. There they can get a picture of which of some 60 advertisers and ad networks are currently tracking them and block that tracking if they wish.

“This is easy, transparent and consumer-friendly,” says Linda Woolley, the DMA’s executive vice president for government affairs. “It’s exactly what the FTC wanted the industry to build two and a half years ago.”

But the outlook for controlling the tracking of online behavior has gotten more complex in the last year. Browser software manufacturers Mozilla and Microsoft have responded to a perceived consumer interest by building features into their latest versions of Firefox and Internet Explorer that let users notify websites that they do not wish to be tracked.

Google has also developed a plug-in for its Chrome browser to do the same thing.

To many DAA backers, this software solution looks like a grassroots Do Not Track Registry, and they are dismayed that the FTC and the Commerce Dept. seem to be sending a mixed message by supporting both self-regulation and the browser approach.

“The FTC’s recent, aggres¬sive support for browser-based solutions has definitely confused the marketplace and threatens to hinder the progress of self-regulation,” Bob Liodice, president and CEO of the Association of National Advertisers, said in March. “As our associations and technology partners have strived to sign up participants for our self-regulatory program, more than a few have said, ‘Why do I need to bother, if it’s going to be built into the browsers?’ ”

Finally, expect to see a bill introduced into the Senate by Sens. John Kerry and John McCain that will call for self-regulation—but may also give the FTC broad power to set privacy rules and operate a consumer opt-out website.

It’s not certain that laws to make life tough for marketers can succeed in a weak economy. On the other hand, public sentiment may be a driver. A Gallup poll last December found that 67% of Americans would block marketers from matching ads to their web behavior—and 61% opposed the targeted ads even if they came with free access to content.