Google in targeted marketing rules talks

Online publishers and technology firms are thrashing out proposals to self-regulate behaviourally targeted, online marketing.

The proposals aim to enhance consumer safety, preserve commercial choice and educate consumers about behavioural marketing, said Nick Stringer, head of regulatory affairs at the Internet Advertising Bureau, which is coordinating the process.

Firms in the discussion include: Technology firms Google, Yahoo, Microsoft Advertising and BT advertisement serving firms Revenue Science, Platform A and Phorm and publishers the BBC, Reuters, the Telegraph and the Guardian.

Concerns over consumer privacy have made it controversial in most countries to provide marketing material based on individuals’ online behaviour. This is because to do so, companies have to track where an internet user goes online, what they search for, who they connect with, and what they buy. They then use this information to build a profile of an individual’s likes and dislikes, and use that to sell them something.

While this is a commercial application, profiling technology is also widely used in the law enforcement and fraud prevention sectors to identify suspicious transactions and individuals.

When BT conducted secret trials of an advertisement-serving technology from Phorm in 2006 and again in 2007, some complained that BT and Phorm were invading people’s privacy and abusing their trust in their service providers. BT completed a third round of trials in December and is now assessing the results.

The upside of behaviour-based targeted marketing is that it should be relevant to the person who receives it. This saves the marketer money and reduces the amount of junk advertising the consumer receives. The downside is that the marketer has to collect a lot of data over time to build up a picture of what is relevant to that individual.

Many privacy watchdogs, including the Information Commissioner’s Office, want consumers to make a conscious decision to opt in to receive targeted marketing data, with opt-out as the default.

This could destroy or hurt the business model of hundreds of internet-based firms, including Google, Amazon and Yahoo.

Google has never revealed exactly what information it collects when someone uses its search engine, and few others do. Many companies use “cookies” (small software programs) that track where one goes and what one does on the net, and send the information to the cookies’ owners. Some believe this is little different to malicious spyware, which might capture your bank account details, read your e-mail and map your online relationships.