What If They Like Big Brother?

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Google announced late last week that it will offer an exchange to help brands place online display ads. Earlier this month, it was revealed that Congressman Rick Boucher is drafting legislation to require businesses to disclose to consumers the information they capture about their Internet behavior, and allow them to control its uses.

The two news items are related, whether they’re ever covered in the same story or post.

Brand advertising has always faced a conundrum: it can win creative awards and passing recognition by busy and distracted consumers, but it’s hard to make an unequivocal case that it does anything for the business beyond that. Awareness is good, of course, and well-known brands are well-known in part because of all the money spent on that advertising.

There are broad equations that measure the correlation between exposure and sales, but they are only statistically relevant, not content-specific. Putting stuff in front of people you hope will care is still a crapshoot, and banking on them remember the messages long enough to put them to practical use is less business strategy than an article of branding faith.

The online corollary of brand advertising are display ads, and they face the same shortcomings, with one exception: they’re a lot cheaper, so companies have swapped them for expensive TV spots, and thus realized some efficiencies in lieu of efficacies. There’s still a lot of thinking that the ads don’t do much of anything, though, and I’ve often thought marketers have avoided the deeper questions about its purpose.

So why would Google spend $3.1 billion to buy DoubleClick and chase this spending?

Enter behavioral targeting.

What if brands could tee-up display ads with far more certainty that they’re putting them in front of the most likely buyers at the times they’re most likely to do something because of the exposure (most notably click through)? Suddenly, you can start pricing based on impressions and CTR (click-through rate), and you have the basis for a variable-pricing scheme based on date, time, location, etc. It’s an exchange, which is exactly what Google is going to do: companies will bid on these spots based on their own models of what the exposures might be worth to them.

The deal doesn’t work if Boucher’s transparency bill becomes law, does it?

You’re an educated reader, but most Internet trollers would be aghast at the notion that that their clicks are being watched, collected, and analyzed (on an aggregate level, at a minimum, and often with more detail and household and/or individual specificity). In fact, this behavior is the ultimate source of value for the very ad spaces that Google plans to sell; it’s one thing for it to sell access to those eyeballs, but there’s no model if those eyeballs decide not to show up. Or if they want to get paid for doing so.

It kind of flips around the entire shebang. Could you imagine consumers becoming participants in an exchange, selling their attention to the highest bidders? Worse, just think how many high-value customers would simply opt-out of being so exploited, er, served?

Boucher promises to reveal Big Brother, but I wonder if anybody will care (not to mention whether Internet commerce lobbyists will let the bill even see the light of day). Maybe consumers like being manipulated? Being shown only content that you’re most likely to be interested in might be a prison of the mind as well as the wallet, but it sure sounds like it would be convenient.

Original Post: http://dimbulb.typepad.com/my_weblog/2009/09/what-if-they-like-big-brother.html