The leading trade associations in the online advertising industry have just released their new self-regulatory principles—the first comprehensive self-regulatory principles industry has produced, which track closely with the suggested guidelines released by the FTC in February.
I commend the industry for setting a new standard in transparency, consumer control and data security. These Principles do much to empower Americans to make their own decisions about privacy, but I fear that many critics of so-called “targeted advertising” will
never be satisfied, no matter how high industry raises the bar.
These critics have insisted that ordinary users can’t be trusted to make the “right decisions” about privacy and have insisted on imposing restrictive default “opt-in” rules for the online data collection that makes online advertising valuable to websites that rely on ad revenue. Such pre-emptive privacy regulation would stunt the growth of revenue for the “Free” online content and services we’ve all come to take for granted. During a time of economic recession, and as traditional media like newspapers struggle to make the transition from print to the Internet, it’s more important than ever that policymakers allow self-regulation to evolve. Only by doing so can we expect continued innovation and creativity online. We must all remember: There is no free lunch!
I’ll lead a panel discussion on July 10 on Capitol Hill about “Regulating Online Advertising: What Will it Mean for Consumers, Culture & Journalism?” Please RSVP here.
Fred Vogelstein’s essay in Wired, “Great Wall of Facebook: The Social Network’s Plan to Dominate the Internet — and Keep Google Out” describes the intensifying clash between Google and Facebook—a clash that focuses on the ability to target advertising:
Like typical trash-talking youngsters, Facebook sources argue that their competition is old and out of touch. “Google is not representative of the future of technology in any way,” one Facebook veteran says. “Facebook is an advanced communications network enabling myriad communication forms. It almost doesn’t make sense to compare them.”
Apart from noting that Facebook directs users to Microsoft’s Bing as its default search engine for the Internet at large, the most interesting part of the article is Facebook’s “4-Step Plan for Online Domination”:
1. Build critical mass. In the eight months ending in April, Facebook has doubled in size to 200 million members, who contribute 4 billion pieces of info, 850 million photos, and 8 million videos every month. The result: a second Internet, one that includes users’ most personal data and resides entirely on Facebook’s servers.
2.
Redefine search. Facebook thinks its members will turn to their friends—rather than Google’s algorithms—to navigate the Web. It already drives an eyebrow-raising amount of traffic to outside sites, and that will only increase once Facebook Search allows users to easily explore one another’s feeds.
3.
Colonize the Web. Thanks to a pair of new initiatives—dubbed Facebook Connect and Open Stream—users don’t have to log in to Facebook to communicate with their friends. Now they can access their network from any of 10,000 partner sites or apps, contributing even more valuable data to Facebook’s servers every time they do it.
4.
Sell targeted ads, everywhere. Facebook hopes to one day sell advertising across all of its partner sites and apps, not just on its own site. The company will be able to draw on the immense volume of personal data it owns to create extremely targeted messages. The challenge: not freaking out its users in the process.
Facebook can’t keep losing money forever. Indeed, investors are willing to keep sinking money into Facebook during Phases 1-3 because they think it will pay off in Phase 4—when Facebook really threatens to be a fGoogle-killer. But rather the fact that investors are willing to subsidize the creation of a wonderful platform now used by 200 million people (one fifth of all Internet users worldwide), or that Facebook might finally provide a counter-weight to the fearsome Google, the People for the Ethical Treatment of Data (PETD) are appalled. One commenter on the Wired story put it best: Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.