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Why is the Federal government regulating behavioral advertising?

on August 22, 2011

This blog post is a report being submitted for Zoho, makers of the Zoho office productivity suite which includes Zoho CRM.

Behavioral advertising is the practice of third party sites that track your web surfing behavior as you travel from one website to another, and then serve you relevant ads based on that cross-site surfing behavior. This has serious privacy concerns as information being gathered is being shared across multiple sites.

For years, the industry has tried to self regulate in order to keep the Federal government at bay, explained Steven Bennett, lawyer for Jones Day in New York, in a presentation he gave at the CRM Evolution Conference in New York City.

Unfortunately, for the ad industry, after many attempts, they’ve failed to self regulate. As a result, the Federal government, most notably the FTC, has stepped in to hopefully do the job, explained Bennett.

The need for regulation is because consumers are essentially confused as to what personal information is and isn’t being tracked and shared. No one reads those long legalese documents about your privacy. We ALL just check the box to accept the privacy conditions just to move on. There’s a need for simpler disclosures, maybe a representative “this is OK” icon that would be mandated by someone, said Bennett. The question is who?

FTC has studied the behavioral advertising space for ten years, and just last year there was a flurry of activity with two major reports being released by the FTC and the Department of Commerce, said Bennett. These reports have led to a watered down Privacy Bill of Rights for consumers which is currently undergoing congressional debate.

The current state and debate is not ideal, but at least the heat has been turned up and hopefully we’ll soon move away from the “I don’t get it, I’ll just accept it anyway” privacy model.

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