Tuesday, December 11, 2007

Beacon: Bridging Over Troubled Water

Since Facebook introduced its Beacon program on November 6, 2007—online advertising and privacy debates have flurried. Online tracking and behavioral targeting for the purposes of marketing are not new practices: Internet behemoths like Google, AOL, and Yahoo have done it for what (in the scope of the Internet) seems like eons. So what’s all the hoopla about? Simple—sharing should be a choice.

Until recently, behavioral targeting in an online world served up ads or recommendations on a specific site based on an individual customer’s preferences on that site. Now, the growth of online social network sites (e.g. Facebook has grown a whopping 118% from October 2006 to October 2007) has prompted building better mousetraps to secure the ad revenues that support these sites. Enter Beacon—which attempts to bridge together advertising, pseudo-endorsements, and ecommerce by broadcasting members’ online purchases to their networks and to the advertising partners of the site.

Ad spending on social networks is expected to reach $2.5 billion by 2011 and this has created a lush landscape for behavioral targeting and affiliate marketing programs. It has also sparked a recent wave of consolidations in the ad-networks market—2007 alone has seen Google’s acquisition of DoubleClick, AOL and Tacoda, Microsoft and aQuantive, Yahoo and RightMedia, and WPP and 24/7.

Clearly, there’s money to be made…but where does that leave the customer like you and me?? While targeting our preferences is one thing—monitoring and broadcasting actions out to the world at large is quite another. And this is where Facebook’s strategy in deploying Beacon is fundamentally flawed: they should have considered their customers first.

Amidst member backlash, a petition organized by MoveOn.org Civic Action, and after (ironically) CEO Mark Zuckerberg’s own privacy was compromised, Facebook has instituted some fundamental changes to Beacon including making the social advertising program opt-in and allowing the feature to be disabled completely by the user. Mark Zuckerberg has even issued an apology; but, is it because Facebook realized the error of its ways or because their partners (like Coca Cola, Overstock, Travelocity) are stepping back from them? Only time will tell.

It’s like that old cliché: those who don’t learn from history are doomed to repeat it. With Facebook’s privacy clash last year regarding the News Feed feature—which resulted in member protests and another public apology—most people would have thought Facebook would have deployed Beacon with more savvy and sensitivity. As it stands now, even with the new modifications Facebook has instituted, they’ve got more work ahead of them to get it right.

No comments:

There was an error in this gadget