Will Google Weigh In?

By Zeugma Systems’ Kevin Walsh
08/27/2008

This post might be somewhat controversial, so let’s start with something no one (outside of Venezuela and Zimbabwe) disagrees with. Advertising pays for a lot of what we do every day. Television, radio, newspapers, e-mail, Web searching, video downloads and many other aspects of everyday life are subsidized by advertisers because consumers aren’t willing to pay the full cost.

However, most of us don’t like advertising because it is often noisy and poorly focused. This lack of focus is a direct result of advertisers’ limited ability to finely target consumers. That, in turn, results in things like the preponderance of Levitra and Viagra commercials during golf tournaments (is there something about golf that the AMA should be looking into?).

Given greater information about viewers, advertisers could more finely target ads and make them less noisy. They’d also be willing to pay more for each ad, which would result in fewer of them and lower consumer costs. And they’d become more relevant to the consumer and begin performing a useful service — helping us find things that we need.

So why has one of the most technically sophisticated ad-targeting technologies recently developed raised such hackles on Capitol Hill? Many broadband service providers (BSPs) have started experimenting with technology capable of inserting HTML banner ads based on consumer Web surfing habits. Over time this should result in fewer, more meaningful ads and possibly reduced broadband costs. But hearings on Capitol Hill characterize this as a gross abuse of consumer privacy. Really?

If this were such an egregious violation of consumer privacy, why is it that the company that virtually invented the practice has remained above the fray? BSPs are being roughed up on Capitol Hill, but where is Google?

I suspect that intense lobbying by its senior statesmen has, thus far, allowed Google to skate clear of this imbroglio. Their contention is that consumers voluntarily visit their site and therefore implicitly “opt in” to the targeted ad value proposition, whereas Web surfers often don’t know that their movements are being tracked. Well, yes, but to most consumers it’s the same thing —watching what they do and inserting relevant ads. In any event, Congress recently discovered that Google was actually (gasp!) leaving cookies on consumer PCs, so they are likely to be dragged into the debate whether they like it or not.

And that may be a good thing. Google, having tried unsuccessfully to stay out of this debate, may introduce a voice of clarity to an otherwise cacophonous political witch hunt. The reality is that advertising is a social good because it shifts costs to deeper pockets. Highly targeted ads are even better because they can shift still more costs and become more relevant to consumers. In most cases this really is not a privacy issue, at least not the way most non-technical consumers view privacy — social security numbers, user IDs, and passwords as opposed to sites they’ve visited.

The end result may well be highly targeted ad insertion by BSPs in a better policed [but hopefully not regulated (please, let’s keep Washington out of this)] environment, in which consumers can better understand the deal they’re being offered and permanently opt out or even be required to opt in.

Kevin Walsh is vice president of marketing at Zeugma Systems, which sells gear to allow broadband service providers to identify, monitor, manage, and customize traffic flows on a per service, per subscriber level.

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