Big Brands and Adware

I’ve discussed before how privacy/spyware concerns are going to restrict behavioral targeting related spending by big, well known brands.

This might be the first step in that process. From the article:

THE FEDERAL TRADE COMMISSION’S efforts against adware have so far focused on the supply side by filing lawsuits against companies that unlawfully install ad-serving software. Now, one agency commissioner says it might be time to target demand, by naming the big brands that use adware to market their products.

“A little shaming here might go a long way towards protecting consumers’ safety and privacy,” said the FTC’s Jonathan Leibowitz

It is important to note that this effort is not just associated with Spyware, but with any behavioral targeting technology:

Walter Mossberg, tech columnist for The Wall Street Journal ,went even further — condemning not just adware and spyware, but also cookies placed on consumers’ computers by ad-serving and analytics companies that he said “are under the delusion that it’s okay to force their way into our computers for advertising, marketing and research purposes.”

Significant Business Risk

More facts and fun about the privacy issue facing Google et al – from MediaPost’s Just an Online Minute:

For Google, fallout from the government attempt to subpoena the company’s records isn’t likely to end any time soon.

For now, the government is seeking only a list of 1 million Web sites and records of searches done in a one-week period. And, despite some muddled news reports, the feds aren’t seeking this information as part of an effort against “child pornography.” Instead, the government wants to prove that minors have easy access to online porn–though why the feds think they need Google’s help with this remains mystifying.

Even though the government isn’t seeking any personally identifiable information, the public at large has grown concerned–apparently because people are just now realizing that companies like Google store searches.

A recent survey by the Ponemon Institute found that 89 percent of Google users believe their Web searches are private. What’s more, 62 percent said that if Google released information about their Web searches to the government, they would stop using Google. For the report, Ponemon surveyed more than 1,000 Web users this weekend.

Those numbers alone show that Google–not to mention the rest of the search industry–will soon face a monumental crisis unless the public is reassured that the feds aren’t going to get their hands on information that will link people with their Web searches.

Don’t want to beat a dead horse here, but I think this will emerge as a Significant Business Risk to Google. Not because consumers will stop using it – people say all sorts of things in surveys the never actually do in practice, and there are numerous ways to word questions to get great headlines the next day.

But, as I have written before, the threat, compounded the longer the bad press continues, is that the brand advertisers, i.e., the growth engine, will start avoiding the medium.

Online privacy

The recent subpoenas of search engine records has restarted the discussion over internet privacy.

One of the least surprising aspects of this discussion is the lack of public knowledge about their lack of privacy on many internet services. For example, a recent survey found that 77% of Google users don’t know that Google stores personal information about them. From the article:

Google maintains a lifetime cookie that expires in 2038, and records the user’s IP address. But more recently it has begun to integrate services which record the user’s personal search history, email, shopping habits, and social contacts. After first promising not to tie its email service to its search service, Google went ahead and opted its users in anyway. It’s all part of CEO Eric Schmidt’s promise to create a “Google that knows more about you”.

That’s a big problem. It is clear why Google is resisting the subpoenas. I am sure Google is in part motivated by some altruistic desire to protect people’s privacy. However, a large part of this, I would bet, is driven by the realization that if consumers don’t even know data is being collected, seeing you willingly turn it over to people has the potential to cause a huge backlash. In other words, it is damage control or prevention, depending on how you think about it.

The real danger in all of this, I think, is the impact on behavioral targeting. I have believed for a while that behavioral targeting is doomed in the long run, because of the tactics that have been historically employed to gather the information. If a well known company like Google can collect personal data without the majority of their users realizing it, imagine how many of the “adware” companies truly have consumer buy-in. My guess – not very many.

Until we have a real opt-in system, one in which consumer privacy comes first, in which there is full disclosure it will be a dangerous area for large brand advertisers.

This a dangerous area for brand advertisers, the ones who will fuel online advertising growth. Nobody wants to be associated with large consumer backlashes. They are bad for the brand, and bad for the business. And behavioral targeting, in my opinion, presents too great a PR risk at the present time.

The solution is a real opt-in system, in which there is full disclosure of what is being collected, full ability to edit or restrict the collected information, and complete trust that the terms and conditions will not change at a later date. John Battelle today called for something similar, namely:

- Access to a record of all the information they keep on us and how they use it
- The ability to challenge that data’s accuracy, and edit it for accuracy
- The ability to opt out (with a clear understanding of the resulting loss of services and opportunities that might result)
- The ability to set permissions as to who else might see the data
- The right to maintain a user copy of that data for archival purposes
- The right to share in the value of that data on negotiated terms

Amen.

Only when that type of solution is available will brand advertisers truly be safe playing in the “behavioral” realm. The first companies that get there will find a receptive audience ready to spend.

Regulating Marketing Delivery

Eric Goldman has a great overview of the state of “Regulating Marketing Delivery” on his Technology & Marketing Law Blog.

Definitely worth reading.

iTunes Spyware

Apple is getting into a little trouble with their new iTunes release:

From Kirkville: “Yesterday’s update to iTunes 6.0.2 comes with a surprise: it’s spyware and adware. … Apple has overstepped its limits, and this spyware (because it sends information to a server) and adware (because it displays information to attempt to sell you products) is a very serious breach of the trust I have long had in Apple’s products.”

Perhaps more troubling than the actual activity is the way that Apple has done it. From Boing-Boing: “As Marc at Since1968 points out, there’s no language in Apple’s privacy policy that addresses this specific behavior.”

That, for me, is the heart of the matter. In order to make good on the promise of ever better personalization, and to help consumers improve their Return on Attention, you need to collect information about them. If Apple were upfront about this, and provided a clear and easy way for people to either opt-in or opt-out (opt-in is better), this would never have become an issue. Interested consumers would have embraced the new feature, the same way they have embraced Attention Recorder.

Problems only arise when you violate consumers’ trust and take their privacy lightly.

Cookies Seen as Privacy Threat

From AdWeek :

“Well over half of users believe Internet tracking cookies invade their privacy, according to a new poll.

In a survey of 150 Internet users, 64 percent said cookies represent an invasion of their privacy. The poll was conducted by online ad network Blue Lithium, which recruited participants through banner ads.”

I haven’t seen the details yet (and recruiting via banner ads does not seem terribly sound and that is a small sample size. But I digress…). But the Behavioral Advertising folks everywhere should continue to be worried. Cookies have been around a long time (“The Blue Lithium survey… found 83 percent of respondents claim they are familiar with cookies”), and rightly or wrongly, consumers still have concerns. Unless the industry figures out a way to make more people comfortable with this, they are at serious risk for a backlash and/or regulation.

This is also going to continue to be a large roadblock for brand advertisers. As a friend at P&G told me a little while ago, it is just too risky when consumer sentiment is so negative.

Google and Spyware

Niall Kennedy has a very good article on “Google’s total information awareness potential”. His basic premise: “Google is already well on its way to building an information awareness network on its own sites as well as the sites of hundreds of thousands of willing webmasters and millions of desktop clients.”

This is not a new issue. John Battelle discussed the potential a while back but Niall goes into more detail about Google’s current status. And, Google is not the only one trying to build this potential – see Kandoodle’s latest activities, also described by Niall.

The issue that Niall doesn’t address is that of privacy. Most consumers/users do not really know that Google is collecting all that information. And, once they do realize it, how will they like the fact that they have it and are using it? Will there be a user backlash? A regulatory backlash?

Personally, I think that the backlash will start with advertisers. Why, you ask? Well, it is true that advertisers stand to benefit from this. Consumers are getting harder to reach, and Google’s Total Information Awareness would advertisers realize the Holy Grail of “One to One Marketing” – boosting marketing ROI. So what’s not to love?

The backlash. More specifically, the threat of a backlash. Advertisers will be wary to embrace something that has the potential to generate a lot of negative buzz. All it takes is a couple of well placed and well known examples, and advertisers will get scared away. Not the SMB folks currently advertising on Google, but the large brand advertisers that are going to be the engine of growth.

Already, there are some pieces of the backlash starting. Liz Lawley talks about her attempt to prevent Google’s information gathering by using GoogleAnon.

The future, I think, is actually the opposite of these data collection schemes. It is Permission Marketing – the idea that companies should allow consumers to opt-in to the types of messages they want. Not spy on consumers and give them what you think they want. Ask them what they want, and let them choose what they would like to see. This idea is supported by none less than P&G, one of the largest advertisers in the world and arguably the best.

Groups like AttentionTrust are leading the way in online Permission Marketing. Everyone should watch to see how AttentionTrust continues to evolve.