Privacy Concerns Limits Online Ads

A recent study done by The Ponemon Institute discovered that privacy concerns has definitely affected the online ad industry and prompted many marketers to use online behavioral advertising — based on tracking a user’s Web browsing habits — 75 percent less than they would otherwise.

Nonetheless, the 90 companies and organizations surveyed reduced their behavioral advertising, even though they estimated the tracking-based ads were 50 percent more efficient in generating sales than conventional online display ads.

“Privacy fears are definitely having an economic impact,” said Larry Ponemon, chairman of the privacy and security research group. The markets are holding back, Mr. Ponemon says, because of the uncertain legal and regulatory environment. Congress and the Federal Trade Commission are mulling tighter restrictions on online data collection, disclosure and use.

However, the industry has set forth its efforts in the last year to develop a meaningful self-regulatory program in which advertiser can still incorporate targeted ads, while keeping the consumer informed. "The effort includes public education and technology — a click-on icon — to tell consumers what is happening when they see a targeted ad that uses demographics and behavioral data." (NY Times)

It was also suggested that they include limiting the ability of Web sites and ad networks to use behavioral data to 24 hours after it is collected, and requiring consumers’ permission — an opt-in approach — to hold such data beyond 24 hours.

The groups also say individual privacy rights should include being able to find out who is tracking them and know what information is being disseminated about them.“The online ad lobby is spinning a glossy fairy tale about how they want to protect privacy, all so they can continue data collection practices as usual,” said Jeffrey Chester, executive director of the Center for Digital Democracy.

Full article available at: http://bits.blogs.nytimes.com/2010/04/30/privacy-concerns-limit-online-ads-study-says/?ref=technology