facebook_share_iconOnline advertising market is estimated to be US $40 Billion by 2011 of which mobile advertising is estimated to be over US $14 Billion. Who is going to drive these numbers? YOU. Almost all of the money in this market today is made by advertising companies like Google, Yahoo, Microsoft (GYM as they are popularly known) and a few start-ups on the mobile front. On the other hand, the real enablers of the network – ISPs (Internet Service Providers), Wireless Carriers and network infrastructure companies like Cisco hardly make anything. What is surprising is  that these  companies which provide you the service and carry your data know more about you and what you do online than anyone else. Even more surprising is that they aren’t taking advantage of that information…right? Not anymore…

Also, they say you should be flossing more

Also, they say you should be flossing more

Advertising technology is evolving and it may affect your privacy. Read on…

Everything’s digital and online today

There were days when privacy meant what it should really mean. No one else had access to a part of us except us of course. But today, there are many companies that we need to trust to keep our secrets. With all our devices and data going online, it is estimated that in our lifetime we’ll store about 1 Exabyte of information each incl. images, videos and even your phone calls (thats what Google voice does… store every single call for you). A company that pushes Ads would love to mine that data, understand your personality and preferences and target the right Ads to you. (Read more on about Significance of Social Data)

From Cookies to Packets

Traditional advertising methods use cookies on your computers to  capture your activity based on which ads are targeted. These cookies in most cases are shared between affiliate sites.  Ad providers like GYM store and use their cookies across multiple sites especially in cases where different sites are sourcing Ads from them. Remember facebook beacon? It was a great example of how cookies were shared across partner sites and facebook. Even the current mobile browsers on smartphones like iPhone use cookies. So far this works great except that the information that Ad providers get is limited to your activity on few sites or what they get by you logging in and personalizing services on their site. In the case of mobile, Ad providers miss out on lot of other information like your movement  trends, (location), calling trends, spending history, device capabilities and so on. As CPMs drop and advertisers push towards CPCs and CPAs, Ad providers/distributors come under more pressure to leverage such information to target better.

However, as I mentioned in the beginning,  ISPs and Wireless Carriers who carry your data have much more information about you. So they can (for a price of course), share this data with the Ad providers. How can they do that?  By inserting that information (which helps Ad targeting) in an encrypted form into packets that flow through their routers to the Ad providers. Now using this information, Ads companies can target better even if you delete or clear all your cookies.  Technologies like the AdControl Platform from Cisco (in collaboration with Feeva) are enabling these new advertising techniques. While Cisco gets to sell more routers, it is creating additional revenue sources for the Wireless Carriers and helping Ad providers sustain their pricing/revenue.

Scared? Well for one the information shared is non-PII (Personally Identifiable Information) and hopefully FTC will rein in the Ad companies with new laws…

How is FTC regulating Advertisers? Are they protecting consumers?

Regulatory authorities have traditionally been slow in catching up with technology and with new technologies propping up every other day, it becomes even more challenging for them to anticipate whats coming next. The Federal Trade Commission (FTC), however, is bringing in new laws and guidelines that safeguard your privacy and enforce online trade practices. For example, FTC modified their guideline recently asking  bloggers (who are the new marketing tool for many companies) to provide full disclosures about their endorsements. Mobile Marketing Association is another organization that provides guidelines for Mobile Advertisers.

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But in most cases the guidelines are out-dated, vague or push the onus of protecting personal information on the end-consumer.  For example allowing browsers to clear your cookies, opting-out of marketing campaigns etc. Given the amount of money that companies hope to make in advertising, there is also a strong lobby that influences regulatory authorities.  FTC’s revision of Online Behavioral Advertising Principles asking advertisers to explicitly seek an Opt-In (or consent) from consumers to use their information for each and every use, has come in for strong criticism from many businesses who claim that it is not feasible to implement. However, changes like that work well for consumers because they are in more control over where their information goes –  only sharing it when you need to instead of being tracked by everyone and opting out when you don’t want Ad providers to track you.

Should you be concerned?

Well that depends. Today’s teenagers and youth share so much information online without realizing the consequences of doing so (Read The Perils of Digital Trace). On the other hand, they also want free services. That leaves advertising as the only revenue option for companies. So the solution is for both parties (consumers & Ad providers) to tread the middle ground. As a user you should share only what is needed and if you are really concerned about privacy then pay for the services where you don’t want to be tracked. And to ensure that your data is used appropriately, get your voice heard by the FTC and hope they’ll be there for you to rein in the Ad companies.

Meanwhile, for the ISP’s, Wireless Carriers and Ad companies, this is a whole new opportunity to exploit.