For privacy advocates, 2011 was supposed to be a big year. Many expected it to mark the start of a regulatory trend that would put the squeeze on behavioral marketers who track online consumers.
From proposed legislation that would curtail cookie-based targeting—the practice of dropping cookies onto browsers to both track and target online political ads to users—to requiring consumers to “opt-in” to online targeting and data collection practices, marketers began the year wary.
For now, though, they’re breathing a temporary sigh of relief. We’ve seen no shortage of legislation introduced on both the federal and state level aimed at curtailing data collection and behavioral targeting practices, but the proposals have gone nowhere—at least in Congress. Of the more than half a dozen bills introduced in either the House or Senate that aim to regulate at least some form of online behavioral targeting, not a single one has come close to a vote. Several bills haven’t even been granted a hearing.
“This has actually proven to be a much heavier lift than a lot of privacy advocates really thought it would,” explains Michael Zaneis, vice president at the Interactive Advertising Bureau or IAB. The IAB is an industry group that promotes online advertising and counts more than 500 media and technology companies among its members. Zaneis hosts regular conference calls with IAB members, updating them on the status of relevant legislation at the state and federal level.
“We’re really at the very early stages of any legislative movement,” says Zaneis, who thinks the long term prospects for Do Not Track “may have actually dimmed a bit” over the past year.
It’s precisely the right time for folks in the political consulting industry—many of whom are increasingly worried about what impact Do Not Track efforts could have on firms that specialize in online ad targeting—to start weighing in. The issue tops the agenda list for the newly-formed Technology Committee of the American Association of Political Consultants (AAPC).
Co-chaired by Brian Franklin of Impact Politics and Becki Donatelli of Campaign Solutions, the committee intends to make itself a part of any policy discussions on Capitol Hill that could restrict the ability of digital strategists to advertise effectively for candidates. That includes reaching out to lawmakers and supporting the IAB’s self-regulatory regime.
“You have to strike a balance between providing people the privacy they expect and the unintended consequences of legislation that could really interfere with the ability to deliver relevant ads to people,” says Franklin. “We should be a part of striking that balance.”
While lobbyists from Google and Facebook descend on Capitol Hill as privacy battles steal the media spotlight, the political industry faces some key questions all its own. First, should Do Not Track legislation move forward, will campaigns get an opt-out much like they do when it comes to automated calls? And second, will privacy concerns blunt the willingness of campaigns to use behavioral targeting? Or will increasingly privacy-conscious Internet users impact its effectiveness?
“People involved in political advertising are now in the same boat as the consumer advertisers,” says Zaneis. “The privacy concerns are front and center.”
The commercial advertising world has been engaged in sophisticated behavioral targeting efforts for a while now, but many campaigns are just starting to use and test the tactics. The past two election cycles have ushered in a new era of Internet-savvy political campaigns and some newer digital consultancies are cashing in on online behavioral targeting techniques. Those same firms are now bracing for regulations that could blunt the recent online evolution.
Broad privacy legislation currently pending in both chambers of Congress could imperil the effectiveness of targeted ads that many small and large campaigns are now employing nationwide.
The Chairman of the Senate Committee on Commerce, Science and Transportation—Sen. Jay Rockefeller (D-W.Va.)—is the lead sponsor of one of the signature Do Not Track efforts in the upper chamber. Rockefeller’s bill, the “Do Not Track Online Act of 2011” aims to give consumers the ability to opt-out of having their Web history obtained by behavioral marketing firms that sell the information for targeting purposes. The bill tasks the Federal Trade Commission with setting up guidelines for the opt-out mechanism.
Last year, the FTC released its own proposal for a rigorous Do Not Track program, the details of which don’t sit well with online marketers. The commission recommends the placement of a “persistent setting,” much like a cookie, on a browser to inform marketers of consumer preferences when it comes to tracking.
For Rockefeller, it’s about protecting the privacy of users who currently have their data mined and stored even when they’re unaware of it. From a policy standpoint, he contends that it’s easier to let people opt-out of being tracked then it is to set up an industry wide standard for tracking.
“The way to not have to worry about [how personal data is being used] is to not allow the collection of it in the first place if that’s what the consumer wants,” says Rockefeller.
The industry answer comes in the form of the Digital Advertising Alliance—the industry’s self-regulatory program for online behavioral advertising. It’s a mechanism you’ve likely already seen on online ads. Users can click a blue icon that appears on the top of the online ad and be directed to a targeting opt-out. And for those who want to preemptively opt out of ad targeting, you can set preferences on the group’s website: www.aboutads.info.
“There are no loopholes in this,” says Zaneis. “Anytime data is being collected or used, you’re given notice.” The group boasts participation from the overwhelming majority of online ad networks and digital media buyers.
“You can never get to 100 percent cooperation,” Zaneis says. “But we’re approaching that with our program.”
The effort isn’t enough for the FTC, though. It wants a more comprehensive opt-out. But if Internet users can opt-out on a large scale, it could be a real blow to one of the fastest growing sectors of the online campaign industry.
By compiling anonymous portraits of voters, campaigns are able to make personal and relevant appeals to potential supporters. It’s in a user’s interest, marketers argue, to allow firms to store some of their browsing history and other information in order to connect them with meaningful advertising.
“If the candidate is the product, then you’re giving the viewing public— the voting public in this particular case—better exposure to the message of a candidate,” says Steve Ellis, a co-director of i360. His firm’s website boasts of having an “updated database of over 185+ million active voters and 211+ million U.S. consumers.”
“If there’s a candidate out there that people are attracted to, they’re going to want the opportunity to easily interact with the campaign—be it a donation, be it a sign up for volunteerism, whatever the case may be,” Ellis argues.
Currently, observers say it’s the Obama campaign that has the most to lose if some proposed Do Not Track legislation ends up making its way through Congress without an opt-out for the campaign world. Earlier this spring, the campaign rolled out a new juggernaut for the 2012 contest. The campaign’s “Are You In” application provides access to the Facebook pages of supporters, including information on hobbies, where they live and what networks they’re a part of.
The app is intended to give the campaign a new level of intimacy with its supporters—a level of intimacy that allows the campaign to shower voters with very targeted online ads. The online targeting practices digital strategists are now deploying for campaigns aren’t the exclusive domain of well-funded, high profile candidates, though. Looking down the ballot, there are plenty of applications for candidates in less attention-grabbing races even if it’s just using online ads to drive the right voters to their websites.
In this way, argues San Francisco-based Democratic consultant David Latterman, the ability to track and target helps level an often lopsided playing field.
“I would argue this could hurt the little guy because online advertising isn’t that expensive and it’s a conduit that smaller candidates can use,” says Latterman, who’s also the associate director of the McCarthy Center at the University of San Francisco. Latterman says he gets that consumers are clamoring to have more of their data shielded from advertisers, but he thinks privacy legislation would take “away one of the affordable conduits for marketing for some of the smaller candidates.”
It’s technology that also allows an unprecedented level of precision. During the 2009 New Jersey governor’s race, Chris Christie launched an Internet-based defense of a tough attack from then-Gov. Jon Corzine. The Democrat had accused Christie of supporting policies that would cut funding for medical screening services, such as mammograms.
CampaignGrid, the online advertising firm that worked for Christie in that race, targeted a precise segment of female voters in the Garden State with an online response ad. “Mammograms save lives,” the ad read. “Chris Christie knows firsthand—a mammogram saved his mom. Watch now.”
Rockefeller’s bill would drastically change this new environment. If large swaths of voters began to opt-out, the effectiveness of efforts like the one Christie’s campaign employed would undoubtedly be stunted.
Political consultants were warned of a similar doomsday scenario when Do Not Call registries were established in 2003. In the end, politicians were exempted from the list, prevailing on a freedom of speech argument. Some privacy advocates, including Lillie Coney with the Electronic Privacy Information Center, fully expect campaigns to get that same protection this time around should Do Not Track legislation actually make it through Congress.
“It’s one of the last things added, typically,” Coney says of language that would exempt campaigns from any Do Not Track standard. “I would be very surprised if anything makes it through the process without that language.”
Others aren’t so sure. An exemption for politicians this time around could be a stretch, some argue, because Do Not Track legislation isn’t necessarily about stopping a form of speech.
“Tracking is different—you either can track or you can’t,” says Latterman. “With political stuff you do start to move into free speech. But tracking isn’t speech; it’s collecting data.”
The relative success of Do Not Call legislation seems to be coloring the congressional debate around Internet tracking policy. Many consumers were relieved when they were empowered to block telephone marketers, but the Do Not Track list probably would have the opposite effect, according to Tom Leonard, president of the Technology Policy Institute. He says an intrusive phone call at dinner time is worlds apart from an ad that pops up as you browse the Internet.
“Rather than reducing unwanted marketing messages it would likely increase unwanted marketing messages, because you would get messages that were less well targeted to your interests,” says Leonard, who has testified against Rockefeller’s bill in the Senate.
“Advertisers would have to send out a lot more messages than if the messages were well targeted.”
That’s an argument echoed by Sen. Claire McCaskill (D-Mo.), who has turned out to be a key Senate ally for marketers given her take on many of the proposed Do Not Track policies. The Democrat contends that consumers are ultimately the biggest beneficiaries of anonymized tracking.
“I just think people need to understand there are serious consequences to saying that we can’t do behavioral marketing on the Internet,” McCaskill tells C&E. “It’s going to cost consumers a lot more money to get what they’ve been getting for free if we’re not careful. So I want to make sure it’s thoroughly vetted.”
As for how the legislation could impact the political consulting community? That’s not quite the motivating force for McCaskill.
“Well, that’s the least of my concerns about the political campaigns,” McCaskill says. “My concern is that the Internet has worked so well and it is free to consumers, to the American people. The reason it’s been free is because behavioral marketing has funded the Internet.”
It’s unclear how many would opt-out if some form of Do Not Track were to become law, but an array of surveys show a growing level of concern as people are slowly learning their online movements are being documented and then sold to advertisers and eventually politicians. A recent online Wall Street Journal survey that accompanied a series of articles on how marketers track consumer behavior, found that 59 percent of respondents were “very alarmed” by how companies track the online footprints of users.
“This is an area where I think we need some clarification,” says Arkansas Democratic Sen. Mark Pryor, a cosponsor of Rockefeller’s legislation. “I think the consumer, you know the John Q. Citizen, should have the right to know if he’s being tracked. Right now, I think a lot of people would be surprised to realize how often they are being tracked and they have no idea.”
Even if lawmakers muster the votes, implementing a new regulatory system could prove even tougher than getting a bill through Congress. Whatever emerges, consultants are hoping for a slow, methodical approach.
“If the timeframe is aggressive for good actors in the marketplace to get aligned with that new legislation, I think it could have a more material impact for the industry,” says Andy Hunn, the chief operating officer at Resonate Networks. “One of the big questions still unanswered is to what degree are preexisting approaches to trying to protect online privacy, like the self-regulatory efforts of the online ad industry, going to be grandfathered in under the new legislation?”
Putting the current legislative bottlenecks aside for a moment, the fate of Do Not Track is just as uncertain given the dozens of new lawmakers who have yet to form opinions on a topic that doesn’t lend itself to an easy ideological calculation.
“On the one hand, we don’t want to discourage innovation and discourage providers from going into unique lines of business that have made our lives easier,” says Florida freshman Sen. Marco Rubio (R). “On the other, I’m not sure that all of our private information like that should be available to people to use for consumer purposes. So it’s an interesting issue from an intellectual perspective and I’m still forming an opinion on it based on information I’m getting.”
Matt Laslo is a Washington D.C.-based freelance journalist who covers Congress and the White House.
Shane D’Aprile contributed reporting.