On December 9, the Information Technology and Innovation Foundation hosted a debate in Washington, DC entitled “Targeted Online Advertising: The Savior of the Web or Fundamental Threat to Privacy?” Panelists debated the value of advertising to the economy, the potential threats of targeted advertising to privacy, as well as different approaches to regulating behavioral ads and data collection.

Panelists included Berin Szoka, of The Progress & Freedom Foundation, Howard Beales of George Washington University, Jeff Chester of the Center for Digital Democracy, Ari Schwartz of the Center for Democracy and Technology, and Peder Magee of the Federal Trade Commission, while Robert Atkinson of the Information Technology and Innovation Foundation served as moderator. 

Targeted online advertising, or behavioral advertising, tracks individual users’ browsing and search histories to deliver personally targeted ads, which generates privacy concerns among some industry experts. It differs from contextual advertising, in which advertisers tailor the ads on a page to a keyword in a search query or the content of the website, without collecting as much personal information.

The debaters held widely different perspectives on the merits of targeted advertising. Chester approached targeted advertising as inherently manipulative and deceptive, calling it a “pervasive, far-reaching system of influence.” Szoka approached targeted advertising as merely trying to sell customers something more relevant and interesting, and he argued that consumers benefit from this better, more profitable advertising because it allows them to get high-quality content for free.

One of the key factors in the discussion of the issue, panelists agreed, is how much more money publishers and advertisers actually earn from using targeted advertising compared to other techniques. Chester stated that targeted ads deliver only eight to nine percent more profit than traditional ads, while Beales believed that they delivered up to 500 percent more profit. The privacy concerns resulting from collecting users’ personal information remain the same whatever the financial benefits; but if these methods were actually quite profitable to content publishers, it might tip the balance toward regulating them less strictly, Schwartz implied.

The issue is timely and relevant, as many panelists seemed to believe that Congress was close to passing legislation to regulate the collection of consumers’ online data. The discussion followed a Privacy Roundtable hosted by the FTC on December 7, during which many of the same panelists discussed issues related to collecting and using consumer data.

Photo credit:  Even wachten by Waag Society