Cracker of an Issue

Untangling the Web of Online Advertising and Privacy

Monday, August 01, 2005

Out of the Fire and into the Frying Pan

A day after it was reported that a possible deal to be acquired by Microsoft had fallen through because of Claria’s past and its advertising software being decried as being deceptive and intrusive; Claria announced its new plans to step into personalized search. Early this year, Claria launched 'BehaviorLink', their new full-scale behavioral targeting ad network and the company had previously used ‘RelevancyRank’, its patent pending behavioral search technology solely to benchmark and evaluate other search engine results. However, this alpha release of Claria's Vista Marketing Services search platform marks the first time this technology has been incorporated into a search engine platform.

Personalized search?

Personalized search is relatively new and has tremendous benefits both from a business as well as consumer perspective. The concept is quite simple, if search engines know more about your search history and your surfing patterns on the Internet, they can obtain a better understanding of your interests as an individual and can provide you with more accurate search results. The ultimate goal of personalized search is to return results that are not only based on terms you search for, but actually what you meant by the terms. The obvious benefit for consumers is that we will be able to find things we’re looking for a lot quicker, and the benefit for the search engines is that they can charge more for targeted advertising. Of course, the only way in which this can become truly effective is if search engines can collect more information about consumer interests and habits so that they can then translate that data into targeted results that benefit everyone. Therefore, personalized search raises the obvious issue of online privacy and whether the trade-off is something that consumers will readily accept.

Getting too personal

Personalized search can truly emerge as the next major innovation in the multibillion-dollar online marketing business if companies that offer these services work hard from the onset at earning consumer trust, by ensuring (and communicating to consumers) that information collected from them will be used exclusively to improve their search experience and will not be used to "spy" on them and will not be shared with third parties.

According to Claria’s CEO Jeff McFadden, "Over time and with more users, these types of personalization technologies will allow consumers a richer, more customized online experience". This statement is definitely true, but no amount of time and money spent publicizing how personalization will improve the online experience of consumers helps address the basic issue that collecting search behavior is going to make many people nervous. In Claria’s case, consumers have sufficient reasons to be very nervous because the search results will not only be based on every search done by a particular consumer and every search result ever clicked on but also historical interests based on Web-wide surfing habits, number of visits to a destination site, time viewing a site and conversion behavior etc. Further, Claria’s search behavior is gathered from Claria’s adware, which is installed in over 40 million desktops of consumers (who probably unknowingly obtained the adware in the first place) and is therefore going to make the consumer privacy concerns significantly greater than personalized search being offered by the likes of Google or Amazon.

Communicate your privacy message

Privacy and spyware concerns linked to Claria's pop-up advertising network that shows ads based on users' Web behavior have plagued Claria since the beginning. Although Claria has recently been making attempts to clean up their image and improve their installation practices, many of Claria's products continue to be deemed intrusive and unwanted. Further, if stepping into behavioral targeting and personalization services is Claria's attempt to move away from pop-up ads and its troubled past, then Claria should be making an extra effort to address privacy concerns regarding their new services from the onset. If Claria hopes to successfully shed its past image and start courting mainstream publishers, a commitment to consumer privacy should not only be reflected in mechanisms built into the products and services offered, but should also be communicated loud and clear to consumers. Claria has taken some steps in the right direction and are working closely with a number of industry groups focused on privacy initiatives and programs. However, enough is not being done to educate consumers about the value-proposition offered by these new technologies and services that are all linked to information collected via Claria's adware installations.

Personalized search is a great idea – consumers want it and advertisers need it, but privacy concerns can stifle its growth. Companies like Claria that are constantly innovating must recognize the benefits of communicating their privacy message not only to potential clients, but also to consumers in general and must learn from their past mistakes and the mistakes of others, because no matter how much progress we’ve made, Internet users are still supposedly ignorant about privacy issues and after all these years, even ‘traditional’ Internet advertising technologies such as cookies are still not being spared.