Will behavioural targeting be banned?

By February 4 2012, 1:30 pm 1 Comment
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I’m still trying to get my head around the implications of the new draft EU data protection regulations. One thing is puzzling me in particular – big changes to the definitions of ‘consent’ and ‘personal data’ that could, in my reading anyway, effectively ban current approaches to behavioural targeting.

The draft effectively rules out current notions of implied consent to things like data sharing by redefining consent as “any freely given specific, informed and explicit indication” of the consumer’s wishes “either by a statement or by a clear affirmative action”.

Meanwhile the draft also changes the definition of personal data to include anything that “directly or indirectly” identifies a person “in particular by reference to an identification number, location data, online identifier …”.

Today’s behavioural targeting industry rests on two things. Privacy policies which create implied consent to individuals’ data being shared – plus the defence that this data is not ‘personal data’ because it is pseudonymous e.g. using an IP address instead. From what I can see, these two changes to the law would  blow this status quo out the water.

It’s interesting to see that in Facebook’s statement to potential IPO investors it warns that “laws and regulations that govern the use of names and likenesses in connection with advertising and marketing activities is unsettled and developments in this area could affect the manner in which we design our products, as well as our terms of use.”

It then goes on to say that “a  number of proposals are pending before federal, state, and foreign legislative and regulatory bodies” [including the EU] on this front and that they could “subject us to claims or other remedies, including fines or demands that we modify or cease existing business practices”.

Is this a good thing or a bad thing?

I think it’s good. There’s a deeply embedded mindset in marketing that data is a tool in the hands of the company, that the more customer data you can get the better, and that if you can harvest it it’s yours to do what you like with (subject to pesky laws and regulations). This mindset is toxic and kills trust.

The future lies with information, including data, as a tool in the hands of individuals, with individuals voluntarily sharing this data with organisations because they can trust the organisation to keep it secure, respect the individual’s privacy, and use it to add value.

The first approach is the low road of value extraction and adversarial relationships; the second approach is the high road of value creation and win-win relationships.

No doubt the behavioural targeting industry will lobby frantically against these proposals, replete with multiple scare stories about ‘stifling internet innovation’. For marketers generally however, if the gist of these proposals survive the lobbying process, it will probably be a blessing in disguise.

  • Neil Fox

    Great post, Alan, and an
    interesting viewpoint.

     

    Without doubt, your comments
    raise serious questions, both about the legacy of cack-handed data-driven
    marketing and its associated irrelevance, intrusion and downright
    misinformation, as well as about the ability of an individual to know what they
    want.

     

    No one with any ounce of
    marketing integrity should dispute the former, and indeed those of us with
    significant experience in the direct marketing industry know only too well the
    frustration of executing any campaign with poor data and weak propositions. The
    latter point sounds fantastically arrogant, but is it? Where is the cross-over
    between an opportunity to expose an individual to a new proposition and the
    opportunity for an individual to control what they are exposed to?

     

    We are by nature a species
    that covets familiarity within a social group. There is a vast track record of
    product, service and intellectual innovation that initially found it hard to
    gain a foothold. There are two ways of looking at this. Perhaps it is indeed a
    good thing, as the process of natural selection has forced those innovations
    that did not make the grade onto stony ground. The other side is the thought
    that only those innovations that have the required financial backing can shout
    loud enough to gain this foothold and so potentially change things. Simon
    Cowell, take a bow.

     

    I suspect therefore that a
    less black and white view is needed. For sure, regulation to limit the ability
    for the cack-handed practices of the past is to be welcomed. But not at the
    expense of a world where talent is eclipsed by wallpaper.

     

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