Merging Media and the Market

“Half the money I spend on advertising is wasted, and the trouble is I don’t know which half”

 William Hesketh Lever

The idea that half of the money a company spends on advertising is wasted is a realistic given the limitations of traditional media.  However, new media and online behavior targeting in particular, is bringing us closer to figuring out which part of the advertising budget is wasted and which half is effective: but at what cost?  Online behavior targeting aims to deliver the right ad to the right people.  Seems obvious right?  Isn’t this the “aim” of advertising on the whole? 

Sending the right message to the right people isn’t new to the advertising industry; in fact it’s kind of a founding concept.   However, digital media is effectively accomplishing this feat by observing consumer’s behavior, oftentimes, without their knowledge or consent.  Simply put, online behavior targeting strives to automatically understand consumers as they interact with a web presence in order to show them the most relevant content. Search engines use online behavior targeting to construct target markets based on almost any observed behavior, which dramatically increases the potential effectiveness of marketing and at the same time increases the ‘gray’ area in regards to the ethics and advertising. 

The U.S. Congress has been investigating the use of behavioral targeting since protests raised awareness of large internet service providers like Embarq, Verizon, AT&T and Time Warner Cable using the targeted ad service from web tracking company NebuAd.  The question at hand is whether the analyzing these plethora of Internet traffic violates federal wiretap laws by not gaining consent from the consumer to the gathering and use of their web communications.  As shown through this New York Time’s chart, the public is being heavily tracked and marketing to as a result of their particiation on the Internet:

Some providers, like Verizon, have pledged to refrain from collecting and tracking the browsing behavior of their customers unless they receive explicit permission from the affected consumers.  But we’re still being watched.  As previously mentioned search engines also track consumer’s online behavior to make money by helping online advertisers better target their marketing effort through their search engine. Ultimately the solution to this ‘increasingly complex’ ethical situation that online behavior targeting brings to our ‘wired’ existence seems rather simply: informed consent.  Internet companies don’t need to gain the informed consent of consumers to track their online behavior.  However, it is seen in the previous video that regulators are moving towards a disclosure 2.0 policy.  As such, any player who partakes in online behavior targeting should self regulate themselves now to gain the loyalty of consumers, avoid negative press, and gain a competitive advantage for the day when legislation regarding online behavior target is passed if the future.