Last week I wrote about the heated reactions that followed the announcement of Visa and MasterCard’s potential plans to sell their purchase information data to advertisers. I argued that the outrage was based on misinformed notions of data use, fed by the various media stories that have been cropping up at regular intervals to put further fear into the privacy brigade. In this blog, I’ll be focusing on explaining how we at plista GmbH use data, and outlining the various initiatives that are being developed to ensure that there is better understanding between advertisers and consumers.
Data has caused a lot of debate not only in the media, but also within the online advertising industry itself; only the other week, AdExchanger.com asked a selection of ad technology execs to answer the question ‘Why is tracking good?’, which made for interesting reading. The arguments were that as ads keep content free, they’re unavoidable, and that targeted, relevant ads are better than random, irrelevant ads. By using data for behavioral advertising, online advertisers can add value to the user’s experience, serving them ads that are personalized and contextual.
It all sound fairly straightforward, except that of course it isn’t. Data has become an increasingly maligned term, with connotations of invasions of privacy and misuse of personal information. To defend and reclaim the word, we need to dispel the fears and misconceptions by explaining how we in the online advertising industry (the so-called ‘cyberazzi’) use data for behavioral targeting, and outline the benefits that are in it for the consumer.
At plista, our algorithms do not use private, personal information, not only because of data protection laws (though that’s a given), but also because it’s not relevant for our RecommendationAds. Instead, we use interest-based filtering, based on what past users who also visited the current page have read. Other anonymous data vectors also come into play, such as the publisher’s website, geolocation, demographics, the time and so on, all focused on the best content on the publisher’s website. A combination of these vectors then leads to the content recommendations the user sees.
This process allows for each visitor to have his or her own set of personalized recommendations, such as other content or articles related to what the user is currently reading, which comes in the plista “you might also find this interesting…” format. At plista, data is used for the benefit of everyone involved: combining ads with individual user recommendations means more revenue for advertisers and publishers (average CTR is over 7%), and a better, more informative browsing experience for the user.
Once the fears about invasion of privacy and misuse of personal details have been cleared away, the issue is no longer with data, as such: instead, it’s about control. A recent study by McCann showed that over half of consumers want to know and have a say in how their data will be used. If people don’t feel in control of their data and online experience, they will react with fear and outrage, as has been witnessed over and over. The same study also showed that 71% of consumers were willing to trade shopping data if they were compensated for it in one way or another (such as through discounts or promotions), with 86% saying they could see major benefits from sharing data with online companies.
More efforts are now being made to enable understanding of how data is used, and to set in place regulations for the online advertising industry. At plista we offer an OptOut as a matter of course, and have even produced a short film to further illustrate what we do, but industry-wide still more needs to be done to explain data tracking, and to make the opt-out mechanisms clearer. A recent US academic study showed that the current OBA (Online Behavioral Advertising) opt-out mechanisms were ‘fundamentally flawed’, often leading to more confusion than clarity for the consumer. Steps to improve are being taken: Google has increased ad transparency for consumers, and just last week, OBA self-regulatory compliance platform TRUSTed Ads announced it had gained customer contracts with several key brands for its solution, which is designed to clearly educate consumers about privacy practices.
Various self-regulatory programs are also in place, such as the Digital Advertising Alliance (DAA), the Network Advertising Initiative (NAI) and the Interactive Advertising Bureau (IAB), and the US and UK in particular are enforcing regulations on tracking and data use. The US Federal Trade Commission presented its online privacy framework in October, promoting industry self-regulation, transparency, and Do Not Track functionalities, and in the UK, the Privacy and Electronic Communications Regulations (PECR) require companies to gain consent before collecting user data.
These are all encouraging steps in the right direction, and it will be interesting to see how the media and the anti-data tracking brigade respond to the measures set in place to further enlightenment and understanding, rather than fear and misinformation. It seems that the key to good online advertising and a happy browsing experience is more transparency and control for the user. As long as the opt-out option is clear, and everyone is informed of the processes involved with behavioral targeting and data use, people will be willing to subscribe and give information to the companies or brands they want to hear from. And the more information the marketers have, the better tailored, and better overall, the advertising will be.
Find out more about what we do: watch the short plista GmbH film