Sounds scary doesn’t it? Well, apparently behavioral targeting is music to advertisers ears because the technique works. Of course, this very same practice is what makes the hairs on the back of the neck of government regulators stand on end. The controversial and growing practice is going to be around though until it is asked to leave the building. Why? It converts.

cnet tells us some more

Want to get digital-policy regulator types fired up? Start talking about behavioral ad targeting, the business of serving up digital ads that are fine-tuned to a user’s Web surfing habits, and you’re sure to get all kinds of wildly varied opinions about privacy and sensitive data.

But a new study from a group called the Network Advertising Initiative, or NAI, claims that behavioral targeting is more than twice as effective as non-targeted ads, and the inventory from behavioral ads is worth double that of their non-targeted brethren. The study found that 6.8 percent of people who click on behaviorally targeted ads turn into buyers, versus 2.8 percent of those who click on non-targeted ads.

Ok, so let’s review. Companies will pay top dollar for this kind of advertising and it converts at a much higher rate to boot? Many advertisers are starting to say “Sign me up!”.

Let’s also look at the source of these numbers as we try to always do here at Marketing Pilgrim. The National Advertising Initiative’s About Us page tells us that

The NAI (Network Advertising Initiative) is a cooperative of online marketing and analytics companies committed to building consumer awareness and establishing responsible business and data management practices and standards. As increasingly sophisticated online advertising technologies evolve, consumer concerns about their impact on online privacy mount. The NAI is prepared to meet these concerns with both effective industry self-regulation and sensible protections for online consumers.

Gee, a rosy picture of an online advertising technique from a group that is made up of online marketing and analytics companies. Hmmmm. The group has also been around since 1999. That’s ten years and more questions than answers thus far.

Since 1999, the NAI has been working with the online advertising industry to provide consumers with clear explanations about data collection, data usage, and choice. Central to our standards are the privacy concepts of notice, consent, control, and dispute resolution.

Looks like industry folks must be missing some of these meetings considering the high degree of government and consumer concern about just how vague most online privacy policies are and the trouble that is created by these less than clear policies.

Once again we are faced with the interesting dilemma of an industry where everything is supposedly tracked to the nth degree. This tracking and gathering of boat-loads (hat tip to Carol Bartz!) of data creates the classic double edged sword that cuts in both directions. In addition, statistics were made to be manipulated just as much as records were made to be broken. this has resulted in many more questions than answers over the years and that is not likely to change anytime soon.

So if you are using behavioral targeting in your marketing efforts the NAI is just the organization for you. As for the future of this practice? That’s anyone’s guess because it’s effectiveness is based on knowing so much about a person that you can predict with greater accuracy their propensity to buy a particular product or service. While this may sound incredible to a marketer it may sound scary to others. It’s the others that marketers should pay very close attention to.

Any thoughts on behavioral targeting and the ‘too much information’ possibilities?