The FTC proposal, which you can read here, is entitled, Behavioral Advertising: Moving the Discussion Forward to Possible Self-Regulatory Principles. The title is as catchy as it is definitive.
Some of the proposal is devoted to practices that companies are most likely already doing, like providing ample security for data. There is the cosmetic element that requires a disclaimer on a webpage where information is being captured, informing the consumer of disclosure and intent of use.
For affiliate networks, difficulty may crop up in the requirement to “…obtain affirmative express consent from affected consumers before using the data in a manner materially different from promises made when…” when the data was initially collected.
Here’s an example: if I read six articles about running, BT Company 1 tracks those clicks and places me in a running segment. BT Company 1 concludes it’s appropriate to provide my profile to BT Company 2 who has an additional segment, let’s say ‘active lifestyle,’ because it’s assumed I’m active since I run. It’s a logical, and accurate, conclusion for the software to arrive at. But, under these proposed guidelines, it creates a lot of extra work. Instead of just serving a targeted ad for a sports drink or running shoes when I visit a website in an affiliate network, I’ll now get ads for BMWs, too, since they are considered appropriate ads for people with an active lifestyle. For me to receive any ads from the active lifestyle segment, substantial time and resources are needed to ensure I’m okay with receiving offers from BMW. Getting permission costs money and time, and a company may decline to absorb the rising costs of advertising on affiliate networks. The affiliate model, as it exists in its current form, could become untenable.
What’s interesting to contemplate is that this proposal is presented with the pretext that consumers deserve more control over their web experience as a whole. If that’s the case, the effectiveness of the online affiliate advertising network is compromised. While that is a possible negative outcome for some, a positive trend may develop. Deploying this technology for individual companies, and containing it to their domain, will provide similar targeting opportunities with less speculation and more relevance for the consumer.
How do you think the FTC’s proposal, if enacted, will change the face of online behavioral targeting?