The State of Online Privacy


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An update on the state of online privacy and its implications for behavioral advertising, as of January 24, 2011.

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The State of Online Privacy

  1. 1. Click HereThe State of Online Privacy<br />January 24, 2011<br />
  2. 2. AGENDA<br />Headlines<br />Public opinion<br />Regulation<br />Effects on behavioral advertising<br />Facebook<br />Questions<br />
  3. 3. HEADLINES<br />
  4. 4. HEADLINES<br />“You have zero privacy. Get over it”<br />Former Sun Microsystems CEO Scott McNealy<br />
  5. 5. “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place”<br />Former Google CEO Eric Schmidt<br />HEADLINES<br />
  6. 6. HEADLINES<br />“People have really gotten comfortable not only sharing more information, but more openly and with more people”<br />Facebook CEO Mark Zuckerberg<br />
  7. 7. WHERE DOES THIS IMPACT US?<br />Behavioral advertising<br />
  8. 8. PUBLIC OPINION<br />Three camps<br />Consumers who have no idea that any information collection and sharing is taking place<br />Consumers who are troubled by the collection and sharing of their information<br />Consumers who are aware of this collection and use of their information, but view it as a worthwhile trade-off for convenience and personalization<br />
  9. 9. PUBLIC OPINION<br />Two-thirds of Internet users don’t believe advertisers should be allowed to target online ads to their interests based on the sites they have visited<br />Almost 72% of U.S. adult Internet users say they are concerned about the extent of information websites are collecting about them<br />Sources: Gallup; Future of Privacy Forum<br />
  10. 10. REGULATION<br />Federal Trade Commission<br />U.S. Department of Commerce<br />Congress<br />
  11. 11. OTHER STAKEHOLDERS<br />Industry groups<br />National Advertising Bureau<br />Interactive Advertising Bureau<br />Network Advertising Initiative<br />Privacy groups<br />Center for Digital Democracy<br />World Privacy Forum<br />
  12. 12. BACKGROUND ON REGULATION<br />First FTC meetings held on online privacy in 1995<br />Numerous hearings and workshops have been held<br />The commission has mainly relied on industry self-regulation<br />
  13. 13. COMPROMISE OF 2009 — SEVEN PRINCIPLES<br />Industry groups agree to a set of self-regulatory principles from the FTC<br />Education<br />Transparency<br />Consumer control<br />Data security<br />Material changes<br />Sensitive data<br />Accountability<br />
  14. 14. SEVEN PRINCIPLES — EDUCATION<br />1. Education<br />Educate consumers and businesses about online behavioral advertising<br />Show how the data may be collected and how consumer choice and control may be exercised<br />
  15. 15. SEVEN PRINCIPLES — EDUCATION<br />Privacy Matters Campaign<br />
  16. 16. SEVEN PRINCIPLES — TRANSPARENCY<br />2. Transparency<br />Third parties and service providers should give clear, meaningful and prominent notice on their own websites that describes their online behavioral advertising data collection and use practices<br />
  17. 17. SEVEN PRINCIPLES — TRANSPARENCY<br />Some companies/networks are explaining uses behind the ads<br />Linked icons within ad units are part of an industry-wide campaign<br />Multiple firms vying for endorsement to implement the icon<br />
  18. 18. SEVEN PRINCIPLES — TRANSPARENCY<br />Examples<br />
  19. 19. SEVEN PRINCIPLES — TRANSPARENCY<br />Examples<br />
  20. 20. SEVEN PRINCIPLES — CONSUMER CONTROL<br />3. Consumer control<br />Advertisers should provide consumers with the ability to choose whether their data is collected, used and transferred for online behavioral advertising purposes<br />Ability should be given to users either at the website where the data is being collected or within the ad unit being displayed<br />
  21. 21. SEVEN PRINCIPLES — CONSUMER CONTROL<br />Will giving consumers more control over how they are targeted help alleviate their fears?<br />Opt-in email vs. spam<br />
  22. 22. Do consumers really see behavioral targeting as an invasion of privacy, or do they just want control over which marketers use their personal data?<br />SEVEN PRINCIPLES — CONSUMER CONTROL<br />
  23. 23. SEVEN PRINCIPLES — CONSUMER CONTROL<br />National Advertising Initiative<br />Allows users to remove cookies by network<br />Browser-dependent<br />
  24. 24. SEVEN PRINCIPLES — CONSUMER CONTROL<br />Internet Explorer 9<br />New privacy settings will allow users to create lists of sites with which they wish to share information, as well as sites with which they do not wish to share information<br />
  25. 25. SEVEN PRINCIPLES — DATA SECURITY<br />4. Data security<br />Implement reasonable safeguards to protect data that is collected<br />Retain data only as long as necessary to fulfill a legitimate business need<br />Anonymize or randomize any personally identifiable information<br />
  26. 26. SEVEN PRINCIPLES — MATERIAL CHANGES<br />5. Material changes<br />Requires consent before applying any change to online behavioral advertising data collection and use policy<br />
  27. 27. SEVEN PRINCIPLES — SENSITIVE DATA<br />6. Sensitive data<br />Cannot collect personal information from children they have actual knowledge are under the age of 13<br />Requires consent for collection of financial account numbers, social security numbers, prescriptions or medical records<br />
  28. 28. SEVEN PRINCIPLES — ACCOUNTABILITY<br />7. Accountability<br />Requires everyone in the online behavioral tracking space to develop and implement policies and programs to further adhere to these principles<br />Involves systematic or random monitoring of programs for compliance<br />
  29. 29. SEVEN PRINCIPLES<br />Effectiveness of the principles is dependent upon self-regulation<br />Motivation for compliance is to avoid legislation<br />
  30. 30. FTC REPORT OF 2010<br />“Industry efforts to address privacy through self-regulation have been too slow, and up to now have failed to provide adequate and meaningful protection”<br />Recommends additional regulation to Congress<br />
  31. 31. FTC REPORT OF 2010<br />Recommends the creation of a universal “Do Not Track” feature<br />Modeled after the “Do Not Call” registry<br />Simple, easy-to-use mechanism for consumers to opt out of the collection of information about their Internet behavior for targeted ads<br />Would most likely be built into a web browser or function as a plug-in<br />
  32. 32. Released two weeks after the FTC report<br />Calls for the creation of a “privacy bill of rights”<br />Proposes set of “fair information principles” that would become binding if industry agreed to them<br />COMMERCE REPORT OF 2010<br />
  33. 33. Bill proposed in Congress in May 2010<br />Would have required companies that collect personal information from customers to disclose how they collect and share that information<br />Congressman Cliff Stearns, R-FL<br />Congressman Rick Boucher, D-VA<br />LEGISLATION<br />
  34. 34. A WORLD WITHOUT BEHAVIORAL TRACKING?<br />“Any do-not-track mechanism would pretty much obliterate the way consumers use the Internet”<br />– Debra Williamson, principal analyst, eMarketer<br />
  35. 35. BEYOND ONLINE TRACKING<br />Many sites don’t rely on traditional tracking; they already have access to your information<br />As consumers continue to give away their information, advertisers will rely more on publishers that already have consumer data<br />
  36. 36. BEYOND ONLINE TRACKING<br />Request for permission<br />
  37. 37. BEYOND ONLINE TRACKING<br />The ever-expanding privacy policy<br />Source: The New York Times<br />
  38. 38. Disconnect between outrage over anonymous online tracking and consumers voluntarily giving up their personal information on social networking sites<br />Only 24% of U.S. social media users are concerned about possible identity theft, compared to 42% making a purchase from an e-commerce site<br />BEYOND ONLINE TRACKING<br />Source: Ponemon Institute Survey sponsored by<br />
  39. 39. BEYOND ONLINE TRACKING<br />Advertising on social networks will increase rapidly over the next two years<br />Will move from $1.99 billion in 2010 to $3.08 billion in 2011<br />Source: eMarketer, January 2011<br />
  40. 40. QUESTIONS?<br />