Targeted ads take another step back

As telcos and other broadband service providers become more communicative about how targeted advertising works and what consumers might have to gain from it, the telecom industry should be starting to put past controversies behind it. Instead, it is only starting new ones.

In testimony before the House of Representatives Subcommittee on Communications, Technology and the Internet, AT&T reps said that behavioral advertising processes need to be more open and visible to consumers. The company also said it would not use targeted ad-enabling technologies, like deep packet inspection, without getting customer consent first. The meeting was part of an effort by subcommittee chairman Rep. Rick Boucher (D-Va.), to develop legislation governing the implementation of targeted advertising. AT&T's testimony seemed like a great opportunity for a big name in telecom to refresh legislator and consumer attitudes about the issue, which became embroiled in controversy last year after some service providers started targeted ad trials without gaining customer approval first. AT&T showing support for "opt-in" policies should have helped in this situation.

However, AT&T instead may have re-ignited the targeted ad controversy by failing to disclose that, as an advertiser and marketer itself, it works with an Internet advertising company, AudienceScience, whose partners do not ask consumers for opt-in approval before tracking Web behavior. This information was first reported by MediaPost [1]. AudienceScience relies on its partners using the controversial "opt-out" approach in which tracking practices are disclosed in a company's user privacy policies. AudienceScience uses tracking cookies, rather than DPI technology, and does not collect personally identifiable information, according to PC World and other publications reporting on this issue.

However, that probably will not be good enough for Boucher and consumer watchdog groups. While AT&T is just one of many firms that uses companies like AudienceScience to manage its Internet advertising programs, the damage is done, and could be worsened by the service provider's failure to see that it supports a double standard: As an ISP and network operator, it supports high visibility and communication of targeted ad processes, but as an advertiser, it works with a company that arguably does not advocate the same level of visibility in its processes.

In this confusing area, anything less than full clarity and disclosure leaves a gaping hole of distrust.

-Dan [2]

For more:
- MediaPost has this report [1]
- PC World has this story [3]