Advertisement Based on Consumer Behavior

Database Marketing Begins to Self-Regulate

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What Do Consumers Think About Behavioral Advertisement?. © |Dreamstime.com

In June of 2012, The New York Times published an article entitled You for Sale: Mapping, and Sharing, the Consumer Genome written by Natasha Singer, a Times reporter. The article featured a data broker by the name of Acxiom that is located in Conway, Arkansas. Acxiom was described by Singer as the quiet giant - quiet is the operative word since very few consumers have ever heard of the company, let alone truly understand how the company participates in the multibillion-dollar industry called database marketing - an industry that is fed by big data.

Market research has a new relation in the marketing family and it is a bit of a wild child.  Database marketing - also called behavioral advertising or interest-based advertising - skirts the process of gathering information about the consumer from the consumer, in the manner of traditional market research.  Rather, consumer information is gathered through the behavior of the consumer and, generally, the entire process is concealed from the consumer.

Consumers who browse the Internet have become accustomed to the intrusion of advertisements created by the cookies that lurk on their computers. The mostly young, digital natives of today have become more inured to having their personal information distributed all over the Web. In fact, they are quick to ask: "What is the problem? If someone wants to know what fast-food restaurants I visit, what team apparel I buy, and what music I download, why should I care?" This relaxed attitude doesn't seem to extend as readily to the older inhabitants of the digital natives' worlds.

Some older members of our society can remember instances when personal information was used to harm the reputations and careers of people. These consumers are understandably slow to warm to what they perceive as an over-sharing generation and culture.

In 2010, the Federal Trade Commission published a report titled Protecting Consumer Privacy in an Era of Rapid Change, the thrust of which was establishing best practices and recommendations for leaders in government and technology industries regarding online privacy and personal data mining.

Shortly after the initial report was released, the recommendations were modified to reflect the rapid pace at which digital privacy issues are emerging. The Federal Trade Commission received over 450 comments on the preliminary recommendations were received from consumers and experts. Three areas were targeted for revisions.

Scope as reflected by company size, when consumers are provided with choices about how their data is used, and the provision of consumer access to personal data used by data brokers. Specifically, small businesses are generally exempt from applying the best practices framework, if they do not collect and transfer non-sensitive data to more than 5,000 consumers each year. In addition, companies are to take reasonable measures with data that will result in de-identification, will not re-identify data, and will not permit downstream users from re-identifying data.

According to the best practices recommendations, the provision of choice to consumers regarding use of their data hinges on the context and type of transaction, plus the nature of any existing relationship with the enterprise, or as legally authorized. The best practices recommendations directed at data brokers are pointed: transparency must be increased.

The Federal Trade Commission supports legislation to ensure that consumers have access to information held by data brokers. In addition, the Federal Trade Commission called on data brokers who provide consumer data to marketers to consider developing a centralized website that would facilitate access to the privacy practices of the data brokers, and provide options to consumers for controlling how their personal data is used.

On another front, the Department of Commerce and the Federal Trade Commission have recognized the Digital Advertising Alliance (DAA) has begun to implement a plan for adding Web browser-based headers that will allow consumers to express their choices about how data is being collected, shared, and used. This DAA Self-Regulatory Program is a step forward in meeting the best practices standards outlined by the Federal Trade Commission for data brokers.

An easily recognizable icon is a pivotal aspect of the consumer data management plan with which marketers are associating. It reads simply: Consumer Choice Page and includes a prominent checkmark in the icon. Clicking on the icon brings consumers to a page that explains how the system works and provides a button to click on (currently) three browsers: Google Chrome, Foxfire, and Internet Explorer v. 1.1. Many of the largest marketing and media associations in the United States have joined in the effort to launch the self-regulatory program. The catalyst for these changes is a document titled Self-Regulatory Principles for Online Behavioral Advertising that came out of the alliance and outlines ways that consumers can gain more control over customized behavioral advertising or interest-based advertising. The participating companies have agreed to a shared commitment to deliver a robust and credible program of notice and choice to consumers for online behavior advertising and to enhancing consumer confidence in the online medium.