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Release 0.9: Disclosure 2.0

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You can read a short version of what this is about at Mediapost or even see it, courtesy of Nicholas Givotovsky, on YouTube. Basically, it's a recap/expansion of the comments I gave at the FTC "ehavioral marketing" Town Hall and the talk I plan to give at Defrag tomorrow.

Yesterday the FTC held hearings -- or rather a Town Hall -- on "behavioral targeting," which featured the YouTube video contest I had instigated here on Huffington Post. Berkman Center ended up doing all the work, and the results were satisfying.

But now I want to elaborate on what I said on an earlier panel at the same town hall. First, though, I had to fix the FTC's disclosure about myself in its bio handout, which I repeat here at length below... because it's especially germane to this post. Ironically, the FTC staff had edited my bio to leave out all the companies I'm associated with (perhaps to avoid marketing taint), but they are relevant to anyone who might want to understand my biases.

You can draw your own conclusions. Jeff Chester of the Center for Digital Democracy thinks it shows bias; I would argue that it shows experience!

My experience is that consumers don't read privacy statements...and even when they do, they don't understand them.

So what to do? More and "better" privacy statements haven't done much good. The problems lie at either side of what merchants promise in incomprehensible legalese: On the one side, do they actually deliver on those promises? which is where auditors, whistle-blowers, TRUSTe, law enforcement and the like come in. The FTC already has enforcement and prosecution authority against fraud, and it has cleaned up companies such as Zango and put others such as Direct Revenue out of business (though its principals may rise again...)

The other question, which is my concern, is consumers' understanding of the context in which they are surfing the web. The Cookie Crumbles contest was one small step -- explaining how cookies work, though without much information about what marketers do with them. Next year, I hope Berkman and the FTC will do the contest again, with a suggestion of five minutes instead of two, and a broader scope. Meanwhile, Google has launched a new privacy channel, and it's a free country: Anyone can go ahead right now and make a five-minute or even a ten-minute video explaining the broader context, and with luck users themselves (along with Berkman, Google, bloggers and the press) will help the best of them gain visibility.

But what about the disclosure statements themselves....?

Mirror mirror on the wall

Over the years, marketers have become better and better at collecting data on individuals, recognizing them, classifying them and sending them personalized (you're a segment) and even personal messages (you are member 582930, with 56,784 miles). So why can't they use those same talents and show them personal disclosure statements? For example:

Here's what we know about you:
You have visited these sites.
You entered these search terms.

[Of course, these will be very long lists.]

[So, marketing categories are more interesting and quicker to read.]

Here's what we have concluded about you:
Income range
Propensity to purchase cosmetics online
Favored movie categories
Frequently visited cities
Middle-aged white female, urban
Et cetera

[If they can sell prospect lists to marketers, they can also tell the individuals what lists they fit onto.]

And here are the other sources we have used to learn about you (with links to THEIR disclosure statements):
Axciom
DoubleClick (we are a member of their ad network)

Here are the marketing partners to whom we sell your information:
blah blah...

What's the fairest mirror of them all?

Of course, this won't be simple. Some companies will be better at it than others. And with luck, those who are not so good will borrow ideas (not code or precise layout) from those who are good at it. Many of the terms marketers use are not easy for users to understand.
But that's a challenge, just like the challenge of explaining how aluminium zirconium tetrachlorohydrex GLY reduces your sweat output.

Of course, most users won't read this stuff any more than they read current disclosure statements, but that may change. First of all, if they do look, they will find information that is relevant to them -- the proverbial mirror, which is much more interesting than an abstract word painting full of phrases such as "trusted marketing partners" and "may, at our discretion."

Facebook as nurture

Second, consumers themselves are changing -- not in nature, but through nurture. In particular, Facebook and its ilk are letting individuals learn the habit of describing themselves and spreading their "presence" across the net. They are also learning how to block some of their friends, and how to control which of their friends get to see which parts of their profile. Right now is just the beginning. They will get much better at it -- and Facebook (which is announcing something on Tuesday) will make those tools easier.

If they can control the presentation of and selection from their profiles for their friends, they will find it natural to do so for marketers as well. The marketers need to get ready -- not because of the FTC, I hope, but because of the competition!

My disclosures (and biases)

[This is a partial list of my most relevant affiliations. I was also an informal advisor to TRUSTein its early years.]

I'm a director of and investor in WPP Group, which owns many ad agencies, including 24/7 Real Media, whose Dave Moore was a panelist on Thursday.

Director and investor in Boxbe, which lets users control their own inboxes and share revenue from marketers they let reach them through those inboxes.

Director and investor in eventful.com. Eventful shows ads around events; it also collects e-mail addresses from users and uses them primarily to promote its own services, but it also delivers mail on behalf of advertisers (without disclosing the users' identities to the marketers).

Investor in Linkstorm, not Linkstorms.com, which gives users the ability to see a pop-up menu of choices (instead of a single landing page) when they roll over an ad: Would you like more info about the car, the car company, a dealer near you, or possibly a video about the car's green credentials?

Investor in Zedo, an ad-serving company.

Investor in Dotomi (from the creators of ICQ). Dotomi started out with an innovative, opt-in system that would have delivered personal, by-name messages through ad-banner space by recognizing cookies, but it was too innovative for its time. Now the company does more normal targeted ad-serving and is exploring behavioral targeting.

Investor in AnchorFree, an ad network that works like an ad-supported version of T-mobile hotspots. AnchorFree signs up local venues to offer free WiFi; it sells geographically targeted ads and shares revenues with those local venues. [added Nov. 6]

And finally, I'm an investor in and director of 23andMe, a pre-launch company which is widely rumored to be doing something with consumers and their genomes, and necessarily pays a lot of attention to user data control. I have been helping with the development of our privacy policy and its disclosure, which is a thought-provoking exercise.

I would argue that these companies are exemplary in their use of customer data (and I raise the issue constantly), but we're not there yet in our disclosures. I welcome the challenge of making them better!