Behavioral AdvertisingPrivacy, Consumer Attitudes and Best Practices

Carolyn Hodge, VP of Communications, TRUSTeDavid W. Stark CIPP, VP & North America Privacy Officer, TNS

The Privacy Symposium • August 20, 2008

Personalization Is Expected

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So What’s the Fuss?

• Privacy Groups Ask for Online 'Do Not Track' List– The interactive online advertising "a virtually invisible, stealth

system."Jeffrey Chester, CDD's executive director. • Blockbuster sued over Facebook ad feature

– April 16th Class Action lawsuit filed against Blockbuster in Dallas• A Push to Limit the Tracking of Web Surfers’ Clicks

– State bills emerging ( New York and Connecticut) to require consent for Web companies to use personal information about consumers for advertising.

• Concerns aired about online ad targeting – Federal Trade Commission reviewing comments on proposed

Guidelines for Behavioral Advertising• Watch Your Back for ISP-Targeted Ads

– UK ‘s Phorm

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SURVEY RESULTS

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Methodology

– Conducted by TNS, the world’s largest custom market research company and a leading provider of social and political polling.

– Nationally representative random sample drawn from TNS’s U.S. Internet access panel

– Conducted February 2008

– 1,105 completed interviews

5

Key Findings

• Consumers express discomfort with tracking and targeting even when anonymous

• They desire the ability to limit and control these activities

• Internet users who describe themselves as “very competent” or “expert” in their online technical expertise are more aware of tracking and targeting than their less experienced counterparts

• Tech-savvy online consumers are more likely to take steps to control or limit targeting (e.g. deleting cookies), but their attitudes towards behavioral targeting are quite similar to self- described “beginners”.

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Relevance of Online Ads

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What percentage of ads that you see while browsing online are relevant to your wants and needs?

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Percentage of ads

% o

f con

sum

ers

I find online advertising intrusive and annoying when the products and services being advertised are not relevant to my wants and needs.

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48%

25%

18%

5%

4%

1%

0% 10% 20% 30% 40% 50% 60%

Don't Know

Strongly Disagree

Disagree Somewhat

Neither Agree nor Disagree

Agree Somewhat

Strongly Agree

72%

9%

I like seeing ads for coupons or promotions from online stores and brands that I have purchased from before.

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14%

32%

26%

11%

14%

2%

0% 5% 10% 15% 20% 25% 30% 35%

Don't Know

Strongly Disagree

Disagree Somewhat

Neither Agree nor Disagree

Agree Somewhat

Strongly Agree 46%

26%

The Disconnect: More Relevance, Less Tracking?

• Consumers say that only a few of the online ads that they see are relevant and most consider irrelevant ads annoying

• A benefit of behavioral targeting is supposedly more relevant ads being served to online consumers

• But only one-quarter are comfortable with tracking, provided that it is conducted anonymously

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Awareness of Behavioral Targeting

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When I am online, I am aware that my browsing information may be collected by a third party for advertising purposes.

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Are you familiar with the term Behavioral Targeting?

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Attitudes Towards Behavioral Targeting

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I am comfortable with advertisers using my browsing history to serve me relevant ads, as long as that information cannot be tied to my name or any other personal information.

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6%

18%

15%

18%

39%

4%

0% 10% 20% 30% 40% 50%

Don't Know

Strongly Disagree

Disagree Somewhat

Neither Agree nor Disagree

Agree Somewhat

Strongly Agree 24%

57%

If given the option, I would choose to see online ads from online stores and brands that I know and trust.

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31%

33%

23%

5%

6%

2%

0% 5% 10% 15% 20% 25% 30% 35%

Don't Know

Strongly Disagree

Disagree Somewhat

Neither Agree nor Disagree

Agree Somewhat

Strongly Agree

64%

11%

42% would sign up for an online registry

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21%

21%

26%

15%

14%

4%

0% 5% 10% 15% 20% 25% 30%

Don't Know

Strongly Disagree

Disagree Somewhat

Neither Agree nor Disagree

Agree Somewhat

Strongly Agree42%

29%

I would sign up for an online registry to ensure that advertisers are not able to track my browsing behaviors, even if it meant that I would receive more ads that are less relevant to my interests.

If I saw a button or icon on a display ad on a site that said “Click here to reduce unwanted ads” I would click it.

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23%

21%

20%

10%

22%

4%

0% 5% 10% 15% 20% 25%

Don't Know

Strongly Disagree

Disagree Somewhat

Neither Agree nor Disagree

Agree Somewhat

Strongly Agree

44%

32%

Personal actions taken by consumers

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How often do you delete cookies stored on your computer?

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Every day14%

2 to 3 times a month

13%

Once a month or less30%

Never15%

At least oncea week

14%

2 to 3 timesa week

14%

How often do you delete Internet files stored on your computer?

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1 5 % 1 4 %1 4 %1 3 %

3 1 %

1 5 %1 4 %1 4 %

3 3 %

1 1 %

0 %

5 %

1 0 %

1 5 %

2 0 %

2 5 %

3 0 %

3 5 %

N e v e r O n c e am o n th o r

le s s

2 to 3tim e s am o n th

A t le a s to n c e aw e e k

2 to 3t im e s a

w e e k

E v e ryd a y

C o o k ie sIn te rn e t F ile s

When you are giving personal information to a website, how often do you check to make sure the website has a privacy statement?

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15%

18%

17%

20%

30%

0% 5% 10% 15% 20% 25% 30% 35%

Most of the time(>75%)

Often (51% to 75%)

Sometimes (25% to50%)

Rarely (<25%)

Never / AlmostNever 33%

50%

When you are giving personal information to a website, how often do you read the privacy statement (if provided)?

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30%

20%

17%

18%

15%

13%

19%

24%

24%

20%

0% 5% 10% 15% 20% 25% 30% 35%

Most of the time(>75%)

Often (51% to75%)

Sometimes(25% to 50%)

Rarely (<25%)

Never / AlmostNever

Read Privacy Statement

Check Site for Privacy Statement

f

f

Self-assessment about protecting PII online

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32%

28%

40%

20%

37%

43%

0% 10% 20% 30% 40% 50%

1

2

3

I know how to protect my personal information online and consistently take the necessary steps to do so.

I know how to protect my personal information online but don’t consistently do so.

I don’t really know how to protect my personal information online.

f fFeb. 2008 Oct. 2004

How would you describe your online technical expertise?

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6%

31%

42%

18%

3%

0% 10% 20% 30% 40% 50%

Expert

Very competent, but not quite anexpert

Competent

More than a beginner, but stillhave much to learn

Beginner

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Cookie Deletion by Level of Online Technical Expertise

15%

5%

31%

15%13%

18% 18%

31%

14%14%14%13%

31%

9%12%

14%

7%

29%

0%

5%

10%

15%

20%

25%

30%

35%

Never Once a monthor less

2 to 3 times amonth

At least once aweek

2 to 3 times aweek

Every day

All Respondents Expert / Very Competent Beginners / Much to Learn

When I am online, I am aware that my browsing information may be collected by a third party for advertising purposes.

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71%

13%

77%

10%

66%

15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Agree Disagree

All Respondents Expert / Very Competent Beginner / Much to Learn

Are you familiar with the term Behavioral Targeting?

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55%

29%

40%

62% Expert / Very Competent

Beginner / Much to Learn

What percentage of ads that you see while browsing online are relevant to your wants and needs?

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Percentage of ads

% o

f con

sum

ers

64% Expert / Very Competent

62% Beginner / Much to Learn

51% Competent

BEST PRACTICES

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TRUSTe Program Requirements that Currently Address Targeting and Tracking

• TRUSTe requires sealholders to disclose the use of first party and third party tracking technologies on the site

• Opt-in is required if sensitive PII is transferred to 3rd parties using Web beacons

• If information collected via tracking technologies is linked to collected PII - then the that information is considered PII and all our requirements around PII apply

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Forward Perspective on Behavioral Advertising

• Consumer Education– all commercial beneficiaries should be accountable in providing

education, notice and choice to consumers, where appropriate• Sliding Scale Proactive Notice

– sliding scale for notice and choice should be employed based on practices and privacy implications

• Accountability – Websites where tracking and targeting is initiated, collected or

used, as well as ad networks serving behavioral advertising, should all participate in providing privacy information and options to consumers

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Consumer Education

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AOL Penguin Campaign

Sliding Scale for Notice and Choice

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Source: Microsoft Corporation

Proactive Notice and Choice in Advertising

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Opt-In for 3rd Party Sharing: Disclosures for Beacon Advertisers

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Don’t give visitors and customers any reason to worry about data collection and use practices.

• Go beyond the privacy statement– Matter-of-factly incorporate some disclosure of tracking and

targeting as part of your product or service value proposition. • Provide a “what is this” button to explain how your customization

works. – Primary purpose on websites is not to read notices but to transact

and build experiences– Opt-out rates are low but address the vocal minority

• Make sure your service providers, agencies, and others are following industry standards for privacy notice and disclosure. – Many of the serious complaints or issues TRUSTe encounters are

privacy breaches by marketing vendors.

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