FTC set to scrutinize behavioral targeting

Behavioral targeting technologies study people’s online habits and try to serve them ads or offers tailored to their tastes.  An industry newsletter, Behavioral Insider, warns its readers in the industry that the Federal Trade Commission has scheduled hearings in November that will look at everything “from nuts and bolts about the technology behind behavioral targeting to anticipated changes in data-gathering techniques as the technologies evolve in coming years.”

The FTC announcement offers a cogent description of behavioral targeting and poses some of the questions it wants answered at what it calls a town hall meeting, including:

  • What standards do, or should, govern practices related to online behavioral advertising? Are companies following the (FTC-backed) Network Advertising Initiative Principles, originally issued in 2000 for online network advertising companies? Are these principles still relevant, in light of changes in the marketplace? What other legal or self-regulatory standards are applicable to these practices? Are certain practices generally regarded as appropriate or inappropriate in this area?

  • What changes are anticipated in the online behavioral advertising market over the next five years? Will information be collected through technological means other than cookies? Is behavioral advertising moving beyond the Internet into other technologies? (italics and link added)

In searching “behavioral targeting” on the FTC website I noticed that the agency held a conference in April on “Behavioral Science and Consumer Policy.” A note said the conference would discuss:

“the rapidly growing field of Behavioral Economics, which uses insights from psychological research to identify ways in which consumers may systematically fail to act in their own best interests due to behavioral traits such as self-control problems, failure to process information objectively, and inaccurately predicting the costs and benefits of prospective choices.”

Sounds like the FTC is worried that marketers may be using sophisticated ways, on and off-line, to take advantage of “the-devil-made-me-do-it” motivations — and wondering what if anything to do about such industrial-scale importunism.

Meanwhile, the Center for Digital Democracy, one of the activist groups that has been pressuring the FTC to do something about what it considers the high-tech version of the hard-sell, issued a statement calling the November meeting “an industry talkfest that will result in a delay protecting consumers.”