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More pressure to limit behavioral targeting threatens startup media companies September 1, 2009

Posted by jeremyliew in ad networks, advertising, behavioral targeting, legislation.

Last month I raised some concerns that the government could make monetization even harder for online ad networks and publishers through limiting their ability to do behavioral targeting. The pressure to do so is rising as the NY Times reports:

On Tuesday, 10 major privacy groups plan to demand new privacy legislation from Congress regarding online behavioral tracking and ad targeting.

The roster of groups is a who’s who in consumer and privacy circles: Consumers Union, Electronic Frontier Foundation, Consumer Federation of America, Center for Digital Democracy, U.S. Public Interest Research Group, and others.

Among the things they’re asking for: No sensitive information (like health or financial information) should be used for behavioral tracking, no one under 18 should be behaviorally tracked, Web sites and ad networks shouldn’t be able to keep behavioral data for more than a day without getting an OK from the individual they’re tracking, and behavioral data can’t be used for discriminatory purposes.

While it is always hard to argue against privacy, the impact of this level of restriction would be enormous for companies relying on online advertising. Financial services and pharma/health are two of the leading categories for online advertising; the youth demographic is highly attractive to many advertisers, and limiting behavioral targeting to one day without an opt in severely restricts the usefulness of the data.

I’ve spoken to a number of people at venture backed ad networks, and it is clear to me that more needs to be done to organize feedback to the FTC and congress about the proposed rule changes and legislation.