Pigs Fly! Also, FTC Leaning Toward New Regulation!

More repercussions from the FTC's Privacy Townhall, as the evidence and testimonies -- and their potential implications -- continue to reverberate throughout the advertising industry (and amongst policy makers!). From today's Online Media Daily digest, an article by Thomas Claburn at Information Week on the (dare we say growing?) likelihood that the FTC might actually introduce some new online ad regulation. The industry is all abuzz today about a shift in the US governmental body's hitherto corporate-friendly attitude toward new media goings-on. The tipping point was apparently Facebook's and MySpace's increasingly invasive ad strategies, and their respective announcements over the past couple of weeks that they plan to significantly enhance their invasion(s) of users' privacy -- and, of course, advertise to them even more. As the Online Media Daily post describes,

Consumer privacy groups have been complaining to the Federal Trade Commission about the enhanced targeting practices of marketers. They want stricter regulation of online data tracking-referred to more broadly as "behavioral targeting" these days. And the FTC is starting to listen, as the prospect of enhanced data targeting increases.

Mergers like Google-DoubleClick and Microsoft-aQuantive have consumer groups particularly worried. One of their chief complaints is that ad networks can no longer contend that they don't collect personally identifiable information, as the increase in data collection leads to more distinct user profiles. Moreover, the ways that networks collect user information are expanding: content tracking, browser toolbars, promotions, sweepstakes, discounts, online purchases, search and declared user information. Advertisers aim to take the latter to the next level via social networking. So, how much is too much? Unfortunately, it looks like the FTC no longer trusts the industry to decide.

Claburn's own coverage is certainly a little industry-biased, but he nonetheless makes a number of good connections and tackles the nuances of "personally -identifiable information" in a way that has been lacking in the other articles I've read so far. He writes (albeit with a hint of sarcasm):

The Center for Digital Democracy and the U.S. Public Interest Research Group laid these and other social ills such as racial profiling at the feet of online marketers at a Federal Trade Commission meeting two weeks ago and urged the FTC to investigate and regulate online marketing. The advocacy groups singled out Pepsi, General Mills, and MasterFoods USA, part of Mars, for targeting the youth market with online ads in a complaint filed with the FTC. They also documented the extent to which some of the lenders caught up in the mortgage meltdown were among the biggest online advertisers.

And...

One person's relevant ad apparently is another's manipulative marketing technique that makes use of personal data in ways that compromise privacy. "The right hand of online marketing continues to hide behind the myth of anonymity, even while the left hand of Web analytics constructs remarkably detailed mosaics out of innumerable shards of purportedly 'non-personally identifiable' information," the groups said in their complaint.

The first three pages of the article are a pretty good read, before Claburn's analysis dissolves into a series of pats-on-the-back for industry self-regulation. You might also want to read Claburn's earlier article on how social networking sites makes money.