Online Marketing Meets a “Don’t Track, Don’t Tell” Future

When the Federal Trade Commission (FTC) called for a do not track feature on Web browsers, the agency got a mixed reception. There were cheers from privacy advocates who had championed the ability of people to move about the Internet without being traced.

Marketers, on the other hand, were unhappy. Analyzing consumer behavior has become an important tool for companies that want to more effectively target audiences with advertising and promotions. But for people with a business degree, online marketing tracking, no matter how desirable, is a thorny issue. Businesses will have to learn how to balance greater effectiveness against the possibility of killing the goose that lays the golden marketing eggs — and avoid stepping into legal landmines as they develop.

The term behavioral marketing is six years old and refers to tracking what consumers do on the Web. There are two related areas. One is behavioral marketing on a company’s own site. That is a form of customer relationship management and is generally accepted as a reasonable practice because it stays within the company’s own virtual walls.

However, controversy ensues when corporations use tools to track what Web pages consumers visit, and even what actions they take, beyond the businesses’ own sites. The technologies include both regular cookies (digital fingerprints) and Flash Super Cookies that consumers cannot easily delete. Marketing and ad networks with presences all over the Web look for the cookies and record a person’s activities, adding them to a central log. The list of companies that perform tracking is long, and they can collect such information as bank statements, drug prescriptions, video rentals, and library borrowing histories:

Even life insurance companies purchase data to track people’s lifestyle and diet choices. The extensive and expansive nature of behavioral marketing has caused a backlash over the last few years, and that now is coming to a head. Not only has the FTC indicated its interest in a do-not-track capability for consumers, but Congress has introduced legislation that would allow the FTC to enforce a no-track rule, making marketers comply.

That’s just in the U.S. European law says that starting May 25, sites must get “explicit consent” from Web users to track them. That is exactly what marketers wanted to avoid, as the process can jar consumers and encourage a portion opt out. A planned bill in the U.S. House of Representatives would force companies to provide consumers details of how they plan to use the collected information.

So in addition to a business administration degree, marketing specialists will also have to study new technology limitations, become devotees of public policy discussions, and exercise substantial creativity to find an effective way through a new online landscape.

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