FTC’s Do-Not-Track Proposal Would Give Consumers the Right to Opt-Out of Targeted Online Marketing

In response to increasing consumer outrage and exploitation, the Federal Trade Commission has recommended the creation of a Do-Not-Track service where consumers could opt out of online data tracking by advertisers.

This proposed Do-Not-Track service is intended to be a rough internet equivalent of the Do-Not-Call registry that makes registered phone numbers off limits to telemarketers.

To test the appeal of a Do-Not-Track service, Gallup and USA Today conducted a poll over the weekend that gives some interesting insights. Gallup found Internet users are for the most part aware that advertisers use their online browsing history to target ads to their interests, but they are largely opposed to such tactics — even if they help to keep websites free.

Highlighting consumer’s attitude is a statement last month by Jeff Chester, a privacy advocate and executive director of the Washington-based Center for Digital Democracy who said ad targeting “has helped turn on a light bulb for consumers. It illustrates that there is a commercial surveillance system in place online that is sweeping in scope and raises privacy and civil liberties issues, too.”

Though the poll found that 61% of respondents said they had noticed that ads had been targeted to them, 90% said they paid little to no attention to the ads, a finding that remained consistent across all age and economic groups.

Note: The poll surveyed consumers 18 and older. It would be very interesting to see the impact of targeted advertising on children and youth with lower media literacy skills.  Particularly in light of the Children’s Online Privacy Protection Act (COPPA)’s requirements that make it illegal to collect personal information from or about a child, except under very explicit terms including: gaining verifiable parental consent, providing clear notice as to what information is collected, and how it will be used,  and so on.

This doesn’t mean that all targeted advertising that may be directed to a minor is illegal, or that consumers are wholeheartedly against targeted advertising. In fact, most poll respondents said they would prefer to allow the advertisers of their choosing to target ads to them — rather than allow all or no advertisers to do so.

What this poll’s findings mean to advertisers, consumers, services, and the FTC

According to the Interactive Advertising Bureau, online advertising accounted for $12.1 billion in revenue in the first half of this year, of which a recent editorial in AdWeek said targeted advertising that tracks consumer’s browsing histories is a “fast-growing $1.1 billion industry”. The editorial claimed that the implementation of a Do-Not-Track a measure would equate to an “apocalypse” for online advertisers that rely on these tactics to deliver targeted ads to users.

Their concern is supported by the Gallup poll’s findings that internet users overwhelmingly disapprove of advertiser’s existing practices of data mining and using consumer’s online browsing history to target ads to them.

The picture isn’t entirely black and white however. The editorial view in AdWeek is not held by all online advertisers, many of which have gone to some lengths to allow consumers to choose whether or not they will be tracked for advertising.  See these two blogs for more information about ways in which key industry members are helping consumers determine their ad tracking/do-not-track settings  PrivacyChoice.org – Another Great Site for Managing Behavioral Advertising, and Ad Stalking – When Ads Follow You Online. Additionally, some companies, like Microsoft are already building consumer tracking choices into their products. See Microsoft puts ‘Do Not Track’ function in next IE browser, as an example of this trend.

The poll results suggest that the alternative approaches outlined in the blogs that provide consumers a more thoughtful, user-driven approach to targeted advertising can be successful. When consumers have the opportunity to specifically choose the advertisers that can target them and manage the ads to ones they want to see, they are more likely to pay attention to the ads, and are much less likely to object to the data collection methods advertisers use to customize the content.

The key for the FTC if they move forward with a “Do Not Track” measure will be in creating an appropriate framework of regulatory guidelines, ad industry innovation, and consumer education.

This framework will require an approach based on an understanding that there will be ongoing tension over how to strike the right balance between corporate (and government) data collection, web services profitability,  technical implementation restrictions, and consumer’s privacy choices because there isn’t one ‘right balance’ point. Rather there will be a sliding scale that varies between situational needs and consumer comfort levels.

What should be unanimously agreed upon are these three core consumer protections:

  1. Transparency – consumers must be able to see what information is being collected about them by any party, and have a clear understanding of how it’s being used – particularly if that information is shared or sold to other parties
  2. Choice – consumers must be able to easily find and modify information in their profiles, choose what types of information they will allow to have tracked, and choose who can or cannot track them.
  3. Control – consumers must have the ability to effect a one-click opt-out (or similar ease of opt-out method) of data collection, or a clear notification that the use of a service precludes this choice.

On top of these core protections, the impact and scope of tracking the behavior of minors must be uniquely addressed.

We are at a crucial fork in the road. The decisions that will be made in the next few months regarding consumer’s rights to personal privacy and control of personal information are likely to echo through history. We all have a very high stake in the outcome.



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