Amit Kanigsberg. CTO & Co-founder of Peerset, psychographic ad targeting technology company, discussed the advertising landscape and Peerset's positioning with AdExchanger.com recently.
AdExchanger.com: Given Peerset's reliance on social data, how does the privacy debate and regulatory moves impact your business and others in social media?
I think we're in a good position to weather any online privacy storms that arise. In the past we've seen regulation introduced by congress restricting IP based data aggregators like NebuAds and Phorm. And in recent days, we've seen more public dialogue on the subject than ever before. It stands to reason that we'll see more regulation over the next couple of years. We have consumer advocacy groups and the likes of the IAB in the mix fighting to define such regulation... no way to be sure what it will look like. But I believe Peerset can fit well into the whole spectrum of possible outcomes.
The easiest way to see this is by contrasting us to a typical BT based data company.
First, we use UGC. In contrast, most BT companiescollect user data for their look-a-like modelling that is not explicitly shared by users. In fact this behavioral data is most typically the kind of information people don't want to share. Peerset's primary thesis and methodology takes data that a user generates for the purpose of sharing with others and that explicitly expresses their interests. I believe that non-UGC is the low hanging fruit that an online privacy bill might go after most vigorously.
Secondly, we can work tracking independent. Again, most BT companies, by the very nature of their modeling, must track users across multiple sites. They cannot provide their level of segment building at a single publisher level (i.e., as an ad-in to a publisher's site that does not share data between publishers). Peerset can produce real-time segments for a single publisher with no tracking (look ma, no cookies). This is less ideal, of course, but gives us comfort none the less.
Will behavioral data and social data be handled similarly or held to different standards?
Expanding on the answer above, I'd say that this will definitely be the case whether it be at a regulatory level, self-regulatory level or in the court of public opinion. Social data is produced to share, is a direct expression of the user's interests and at least partially controlled by the user. There's no doubt in my mind that it is held to different standards. And that will only increase as users' data awareness increases. I think that increased awareness, or enlightenment, will only act to improve our market by creating new opportunities to better engage the consumer/user.
What more can be said about the role of the consumer?
The consumer is already central to the whole gambit. He/she's just not a fully engaged member of the publisher, audience, advertiser triad. Like a child watching the obfuscated machinations of his/her parents, the consumer doesn't have any real perspective or understanding of the relationships at play in delivering them free content and functionality. I feel like I barely understand them sometimes.
The consumer needs to be given the opportunity to play along as a full-fledged member and knowingly benefit from the data they are creating - BT and/or UGC. This means that they will have visibility, control and perspective - Visibility of the data they create and the value it represents to publishers and advertisers; Control over this data enabling what is shared with whom and to what end; Perspective of the rewards they will receive for sharing data (e.g., free online experience).
I can only see this shift ultimately benefiting all parties and think it will come along side a general trend towards a decentralization of the overall near ubiquitous social networking experience.
Is the tolerance for targeted advertising inside social networks different than outside social networks when Peerset is leveraging social data and how much should marketers care about where their ad shows up?
I believe that the tolerance for targeted advertising in social networks is higher as the consumer/user can more easily see the connection. Marketers will always care where their ad shows up for brand safety reasons alone. And, of course, sites perform better or worse for many reasons including nature of site interaction and ad placement. But on this question of managing a consumer/user's expectation, it seems reasonable that you don't want to piss off your audience by shocking them with too much fore-knowledge of their interests. It really comes back to points I've made earlier in this discussion - until the consumer/user can fully appreciate his/her place in the mix we have non-optimized relationship and there is room for conflict.
Consumers have accepted direct marketing techniques via the mail that clearly take into account and use PII. Can the consumer ever evolve to this point online? Or should we re-think all direct marketing techniques as it relates to privacy?
An interesting point and related questions... I have some insight into this as I sold my last company to a business with a strong DM service offering and acted as their CTO for several years.
I think the consumer can evolve to this point given the right structures as I've expressed above. One of the reasons, I suspect, that PII and non-PII use in DM has been more readily accepted than online is that the consumer has a feeling that they can manage the relationship with the advertiser. They know who to call. Also, they know why the marketer knows what they know about them. And, a DM piece is typically offering a more significant value-add than online ads. The consumer has visibility, control and perspective.
DM will likely also evolve with regards to privacy, but it has naturally gotten closer to where I think things need to go online.