Earlier this week, I discussed a new advertising service called Lotame, which aims at finding out as much about you as possible and using that knowledge to give advertisers a far more targeted advertising experience than is currently available in the CPM model.
Lotame’s CEO was quick to point out to me over the phone that all of the information the company collects is anonymous and all it really takes from its partners is user age, gender, and zip code. Promises aside, it still has me thinking: how do privacy and advertising really come together in this space?
Advertising is only effective when the advertiser can derive concrete demographics from the publisher. In traditional media, that can range from age, gender, location, and interests to, well, practically anything, depending on the success of surveys and other data collection procedures.
But on the Web, all that’s different. Unlike traditional media where information is collected and maintained for advertising purposes, the Internet is a haven for those that want to be anonymous and any hint of a person’s privacy being compromised will lead to a firestorm of epic proportions. Not only will that person complain and cry foul, but thousands of people who worry about Web privacy will do the same. And in the process, the advertiser and publisher will be forced to back off for fear of losing its fickle user-base.
It’s also because of that culture, though, that CPM advertising has been somewhat effective: by its very nature, the only element that matters is pageviews because the more a publisher has, the more they can charge advertisers.
But Lotame and Facebook’s new ‘Engagement Advertising’ aim at changing the way advertising is done on the Web and will attempt to make ads more targeted to the intended audience by collecting more data in a more meaningful way.
As Jeremiah Owyang points out on his Web Strategist blog discussing Facebook’s new idea, the company believes that “traditional internet advertising tactics won’t apply” as online advertising enters its next phase.
Lotame thinks that its plan will make advertisers more satisfied and generally appeal to publishers that are looking to increase advertising revenue at all costs.
But in both examples, I can’t help but wonder if both Lotame and Facebook are forgetting about the major sticking point every advertiser and publisher needs to deal with: the online culture dictates privacy. And if there is even a hint of an invasion of privacy, the campaign won’t work.
The Web is an entirely new beast that advertisers simply haven’t come to understand. Based on everything they know, advertisers realize that knowing your audience and getting as much information on them is the key to successful advertising. But those same people they’re trying to target want to be anonymous on the Web and desperately want to stay out of an advertiser’s crosshairs. And in the process, a dichotomy forms where on one side, advertisers are trying to make money, while on the other side, users are trying to make sure that doesn’t happen.
So what’s the solution? I don’t know. But as long as advertisers and users are on different pages, one thing can be sure: privacy better be upheld.
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Related Articles at Mashable! – The Social Networking Blog:
Live Mesh – The Version You Can Understand
The Daily Poll: ISPs Serving Behavioral Ads – Invasion of Privacy?
Google and FTC Working on Privacy Standards
Would You Join a “Do Not Track” List?
Is Ad Infuse Too Creepy for Mobile Advertising?
Google’s Crumbling Answer to Privacy Groups: Break It Up.
Europe Doesn’t Like Facebook Beacon Either
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