The coming 'tracking' storm

Greg Sterling has an excellent analysis of the coming storm over online tracking by advertisers - prompted by a first legal move in the New York State Assembly:

Here’s where we are today:

• Traditional media are less and less effective because of audience fragmentation
• Agencies are still largely clinging to traditional media because of “inertia” and familiarity
• The Internet is where huge audiences are today but they’re harder to effectively reach
• Arguably search is the most effective online ad medium
• Brands generally don’t want to spend money on search
• Taking the lessons of search to heart, display advertising — where most of the brand advertising is seeking to go online — is tapping behavioral targeting (BT) and other, similar strategies to make display more “relevant”

After reading about how Internet companies like Google, Microsoft and Yahoo collect information about people online and use it for targeted advertising, one New York assemblyman said there ought to be a law — Assemblyman Richard L. Brodsky, the sponsor of a New York bill to limit how companies collect data on computer users.

And because it would be extraordinarily difficult for the companies that collect such data to adhere to stricter rules for people in New York alone, these companies would probably have to adjust their rules everywhere, effectively turning the New York legislation into national law.

From a legal standpoint this law wouldn’t survive a court challenge because, assuming it passed, it would violate the Commerce Clause of the US Constitution, which doesn’t allow individual states to regulate “interstate commerce.” Of course there are exceptions one can find but this wouldn’t be one of them.

What’s significant here is that it represents a first step in what is sure to be an ongoing legislative and regulatory discussion of consumer privacy. This is analogous to what happened with Click Fraud only more extreme: the search engines failed to “get out in front” of the issue from a PR perspective until they’d been repeatedly hammered in the press.

He's right. Web companies aren't good with PR. I can see the Panorama 'expose' now ... maybe written by the 'ubiquitous' Nicholas Carr, who goes all paranoid again in this post about a new Google ad-serving patent.

• paulcanning: Nicholas Carr goes ballistic