Open Letter to Congress: Back off from our Business Model!

If someone wanted to take all of the air out Web 2.0 before the thousands of little companies developing it even achieve lift-off, it would be restrict the growth of targeted advertising based on users’ online behavior.

That’s because, as we’ve noted many times in this space, media companies — indeed virtually all online companies — need to attract advertising revenue in order to monetize their product lines. For the most part, people aren’t paying for content yet, so the subscription and newsstand sales revenue long available to print publishers are virtually nonexistent online.

The competitive advantage online media hold is the ability to match advertising through keywords and other indicators of user interest to potential consumers when the latter may be most receptive.

Case in point: If you use gmail as your email platform, and type in a message to your friend about where to buy flowers for an upcoming anniversary or birthday, odds are several sponsored ad links will populate the right side of your screen, as Google automatically matches your expressed interest with that of the advertisers competing to serve you.

Whether you pursue this opportunity is entirely up to you, the user. Yes, Google is tracking your “behavior,” in terms of scanning your words and matching them up with advertisers who have “bought” those keywords at auctions. Yes, they are selling this information to people who want to entice you to try their products or services.

But, neither Google nor the advertiser is actually invading your privacy during this experience. Think about it this way, if you walk into an automobile dealership, there’s probably a greater chance you are in the market for a car than if you don’t, and advertisers are willing to gamble on those kinds of odds any day of the week. Furthermore, the advertiser never finds out who you actually are — until and unless you choose to contact them.

In fact, identifying such “qualified leads” in the advertising business is the hardest part of the job. Before the web, all kinds of other techniques — from direct mail to newsletters to sponsored events to the most basic outreach tool of all — door to door salesman  — were employed to try and find out who you were and what you might be tempted to buy.

I, for one, would rather have my browser trying to get my attention any day than a stranger at my front door…

The reason for this rant is Rep. Ed Markey (D-Mass.) is threatening to introduce legislation under the rubric of “online privacy” that would aim to restrict the use of targeted advertising. The solution he and others like him propose is to restrict such advertising to users who choose to “opt in,” as opposed to the current industry standard, which allows users to “opt out.”

In my view, Rep. Markey may be well intentioned, but he is completely misguided. Forcing people to “opt in” is like building the Great Wall of China between content and advertising. You don’t opt in to the ads that are in your magazine or newspaper, on your TV or radio. You may not like these ads, but (except via TiVo) you can’t readily opt out of them.

What’s the cliché — the road to hell is paved with good intentions? We all value our privacy, of course, but this kind of legislation would do nothing from unscrupulous people from invading your privacy. In every web-based company I’ve worked for, we’ve taken the protection of our users privacy very seriously, using encryption technologies to prevent their identities to be stolen, or their private data stored with us breached. We have not allowed partners to contact our users without our users’ specific authorization.

With all due respect, Rep. Markey, your idea is a bad idea, and deserves to be soundly rejected.