Privacy Bill In the Works to Require Opt-In for Cookies

Members of congress are preparing legislation that could severely impact how advertisers and others gather information and present material on the Web and through other digital means. The legislation would restrict the ability to place third party cookies* on the computers of those visiting Web sites, according to industry veteran Dave Morgan, speaking at the Advertising Research Foundation's Audience Measurement 4.0 conference today.

"Congress’ position is that consumers are not appropriately aware of what is being done on their machines, and the use of cookies delivered by a third party is something consumers have not been appropriately informed of," said Morgan, who oversees privacy initiatives for the Internet Advertising Bureau and is CEO of the startup Simulmedia. He was in Washington last week talking to FTC officials and congressional staff, he said. "Congress’ default position is that that will require an opt-in," to serve a third-party cookie. Rep Rick Boucher, who is working on the bill said he could get it through the House, that it would be passed, and that he was willing to work with the industry and consider self-policing measures, Morgan said.

But, Morgan said, the industry has to move fast, and legislators are skeptical of the industry's ability to police itself. There have, he was told, been many abuses. He said he'd had a conversation with a senator from the state of Washington who had worked in the industry who understood that cookies are relatively innocuous but "her constituents don't believe that." Washington senator Maria Cantwell worked at RealNetworks for a time after losing a congressional seat in 1994 and prior to joining the Senate.

Morgan said the tactic the industry could best use at this point was to approach legislators and inform them of the jobs created by the industry, $300 billion worth, according to a Harvard study he cited. Morgan previously led advertising company 24/7 Real Media and behavioral ad targeting firm Tacoda, sold to AOL for some $250 million. The technologies of the companies relied heavily on cookies. Morgan has often been called upon to answer concerns about user privacy.

NOTE: I videotaped Morgan after the panel and will run it during the next Naked Media (noon ET, June 30). along with Morgan defending and Nielsen Online's CEO calling him to task for saying Twitter can be used a measurement tool that could compete with Nielsen. The video will later be available on demand at NakedMedia.org.

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*Cookies, pieces of code, are key to understanding Web users' behavior through everything from ad serving to the number of pages seen and paths taken through a Web site. Third-party cookies are those placed on a users' machine by someone other than the Web site the user is visiting, for example via an advertiser or partner. Currently, such cookies are served automatically and data collected that way as well, unless the user chooses settings in a Web browser that block them, or chooses to actively delete them.

End of the GRP and 'Oxymoron' of Targeted Reach

I was at the Streaming Media East show the week before last and a bunch of executives on a panel ("New Advertising Platforms and Networks") were talking about video measurement and what kinds of measurement is possible. They kept using common industry jargon until someone in the audience frustratedly blurted out, “What’s a GRP?!” After a little befuddled fumbling on stage, and a quiet gnashing of teeth in the audience (“how can this guy not KNOW?!” I could hear some people thinking) one panelist kindly explained that GRP is a gross rating point, a way of trying to figure out what proportion of the people in my target audience -- say men 18-34 -- have seen my message, my ad, how many times. Have 50 percent of men 18-34 seen my underarm deodorant ad five times each? Then that’s 50 x 5, or 250 gross ratings points. Gross is really the right word because it’s a very loose estimate and attempt to apply mathematics to something that’s not really all that mathematical or well-measured.

Mainly, though, I was reminded that:

1. We all have our jargon and in this converged and disrupted mediaverse we have to remember that a lot of people making a lot of decisions aren’t necessarily fluent in the currencies that other people they’re dealing with have and
2. we may be seeing the end of the GRP. I recently worked on a research report for JackMyers Media Business report about measurement in the advertising and media space and found that media buyers -- meaning the folks who take the money from companies and figure out how to spend it on ads -- were talking a lot about measurement and reaching their audiences and so on, but they weren’t talking a lot about GRPs or even necessarily TRPs -- a more refined version for more closely targeting an audience. I think we might be inching toward the end or at least gross diminishment of a measure that’s been a primary currency in the advertising business for decades.... and we’re going to increasingly see people looking to hit their targets in a very targeted way.

One of the people who makes me think this way is Dave Morgan, who told me that the “behavioral targeting” technology he helped bring into the world helped achieve the “oxymoron of targeted reach” -- a huge swath of people (reach, like an advertiser gets with, say, the Super Bowl), but in a targeted way (like an advertiser gets when they know exactly who you are because you’ve registered for soemthing and send you an ad based on your preferences). He’ll be a guest on Naked Media on Wednesday at noon, ET, then On Demand later. You can watch the first interview, with Jay Rosen, here.