BEHAVIOURAL

WEB ANALYTICS ASSOCIATION CHAIRMAN - JIM STERNE

Jim Sterne, owner of a reasonable domain name for a targeting professional (www.targeting.com), author, and self certified “professional explainer” – it’s good to finally meet someone who can explain to us what is going on out there. Can you start by providing us with some plain and simple definitions for “opt in” and “opt out” mean, with specific relation to the privacy debate currently embroiling the online industry.

Jim Sterne : Opt in means you want to subscribe to my newsletter, feed, Twitter stream, etc. You ask to be registered and - in the case of double-opt-in, you confirm that it really was you who asked to be registered. Opt out means I assume you are interested, subscribe you and count on you to manage the burden of unsubscribing should you wish.

This latter method is assumptive, evil, and is guaranteed to bring down the British Empire and the U.S. economy. Oh, wait… too late. OK - how about: is sure to anger your would-be customers to the point of being chased from the village with pitch forks and torches?

Goallover: Evil? That’s a harsh term, and noting your sparring jabs at the old world, we’d like you to know that we British no longer paint our faces green and dance around camp fires – except at summer festivals that is. But let’s get serious. What is the current modus operandi of the web analytics sector, opt-in or opt-out?

Jim Sterne : When it comes to privacy in terms of web analytics, we live in an opt-out world. Websites assume that you don’t mind being tracked - or indeed are unaware that you are being tracked. Should you find this offensive, Yahoo for example, offers the ability to opt-out (see here )

This means that you raise your hand and declare, “I do not like your cookies. I do not want to be tracked. I do not want you to serve special content especially selected based on my behaviour.” The irony of course, is that you would have to agree to accept a persistent “do not track” cookie so we can track those who do not want to be tracked. This approach makes very real sense and has been successfully used telephonically in the U.S. in the Do Not Call Registry for to curtail telephone solicitations.

Goallover: Interesting conundrum to which we should return in a moment! Meantime, do you think that, at the most simplistic level, businesses need to decide whether they fall into one or other camp, the “pro opt-in” or the “pro opt-out” or do you think it is more complicated than that, and why?

Jim Sterne : I think businesses need to decide that they fall into the pro opt-in side when it comes to email and the pro opt-out side when it comes to website behavioural tracking. As the technologies become more intrusive and the data become more semantic and subservient, we may well see the public becoming more reticent to allow their behaviour to be used without their knowledge and therefore against their will.

Really smart marketers will invite their prospects, clients and website users to join. “In return for allowing us to track your movements on our website or network, we will serve you better content, provide a better user experience, offer a badge you can host on your Facebook page and send you this really nifty tea cosy with our logo on it.”

Goallover: As regards this conundrum, you suggested that analytics companies would require the industry to use cookies to advise you not to use cookies. Do you have any ideas for what might prove to be a workable model for either which did not rely on some kind of “cookie” solution (as currently used by the NAI for example), to manage and register the consumer’s?

Jim Sterne : This is not a political issue nor a social issue, but a technical issue. Cookies are the only means we have at the moment to recognize you from click to click. And even then, all we know is that you were the same person (actually the same computer) who clicked before. You have to log in and given us some personally identifiable information (email, etc.) for us to claim to know who you are. Once you’ve logged in, we still need a cookie to determine that you are still you from click to click.

There are cookie alternatives (Flash shared objects and the like) but they are the same technical principle - a small file on your hard drive that the browser can query on every click to see who you are. I would not be surprised to learn that there are students at Cambridge at this very moment who are looking into using brainwave patterns to recognize users but I’m not counting on anything like that to hit the marketplace soon.

Goallover: Our own view is that there are alternatives to cookies which can be readily produced, at a utility or browser or ISP level, but that the value of such an innovation has yet to become viable. And it appears that the political sentiment is a driving factor. As Chairman of the WAA, you recently issued a statement which suggested the WAA was 100% committed to the “opt-in” approach. Is this a pre-requisite to membership of the WAA, (or is it something that the WAA believes should become a pre-requisite)? Here is the link to the statement:

Jim Sterne : This is one to refer to the Standards Committee, the Marketing & Membership Committee and possibly be put up for a vote of the members themselves. In the short term, such a pre-requisite would not be practicable. Major corporations can’t properly tag all of their pages much less make sweeping marketing policy changes at the drop of a WAA demand.

The WAA encourages its members to move in this direction. We advise them that this would be considered a best practice. When they come back and ask how to implement this technically and politically, we have to take a step back and ask our members, “How have you done it and would you recommend that way to others?”

Goallover: Let me rephrase the question. Is a “commitment” to championing the adoption of an “opt-in” methodology something that you personally believe should be a stated objective of the WAA?

Jim Sterne : Personally? Absolutely. But that is my personal belief. As the Chairman of the WAA, I have to defer to members and find out what they think.

Goallover: In your statement, you applaud the recent actions of Yahoo! (click here for more) for their decision to enable internet users to “opt out” of their targeting and analytics tools. Do you think Yahoo! have led the industry far enough to deflect more stringent FTC guidelines and/or government regulation?

Jim Sterne : One can only hope. Government legislation of technology is almost always under informed and expensive to implement.

Goallover: Has the WAA been invited by the Government to advise or explain or educate?

Jim Sterne : The WAA works with the IAB  and the NAI  to try and keep government informed, the baby from being thrown out with the bath water, the fox from guarding the hen house, the dish running away with the spoon and Michael Jackson from … oops, too late.

Goallover: With reference to the above, do you think there is now a need for the industry to set itself high standards for transparency, and have you any suggestions for what an acceptable level of “clear and prominent” notice might resemble?

Jim Sterne : Prominent is easy - clear and understandable is another matter. The WAA is hard at work writing and publishing standards definitions so that we in the industry can have a comprehendible conversation about these issues. Expecting my next door neighbour to understand what we’re talking about is another kettle of fish.

Goallover: With reference to the concept of “informed consent”, in which users are unquestionably informed of the monitoring and tracking technology, and their failure to “opt out” is then interpreted as “consent” to being tracked, why do you think governing bodies are loathe to applaud such measures, for surely these represent exceptionally clear and prominent notifications?

Jim Sterne : Anything labelled “fine print” comes with a caveat that the reader must have an advanced degree in Internet Protocols and a juris doctorate from an institution of irreproachable reputation. Prominence is easy; clarity is in the eye of the beholder.

Goallover: Are you saying that the need for clear “fine print” means that satisfying the FTC call for clarity is the key challenge - the industry must come up with a plain English solution for clarity?

Jim Sterne : There are two sides of this coin. First, satisfying government agencies is necessary whether we’re talking about the FTC or the European Union Data Protection Directive. That’s necessary to being allowed to operate. But more important is operating better than one’s competitors and that means being clear in the eyes of the public. If your customers cannot understand your policies as stated on your website, you are doing them a disservice and not being as customer centric as you might.

Goallover: Jim, in a recent email exchange between us, you wrote – “we happily bring this on ourselves or we unhappily watch as Government legislates something truly noxious upon us”. Do you think the industry is moving far enough or fast enough to avoid government intervention?

Jim Sterne : Yes I do - the government (pick one - it doesn’t matter) has many battles to fight and this issue is not top-of-mind for the masses. Political careers will not rise or fall based on beliefs about cookies. That said, we must hope for the best while planning for the worst. We must offer up guidelines about behaviours so that the government does not make rulings about the technologies.

In 1995, at the height of the first Cookie Scare, the U.S. Government created policies about building government websites that included a non-cookie policy. This was based on a lack of understanding of cookies and has hampered the U.S. government’s ability to make their websites as effective as possible without getting a formal waver. See Eric Peterson’s “Open Letter to (then) President-Elect Obama”

So while I do not expect this issue to become a cause celeb, some of us are suffering from government regulations today.

Goallover: Jim, a number of UK industry chiefs also believe measures are required in order to avoid Government intervention. But do you think an industry that implements self-regulatory measures solely to stave Government intervention is likely to succeed?

Jim Sterne : It’s worked wonders for the U.S. financial industry hasn’t it? Oh, did we do all that? So sorry!

Clearly, “just to avoid legislation” is a no-win proposition. Playing to the letter of the law rather than the spirit of the law is always a mistake.

Marketers should embrace customer centricity as a founding principal of all business dealings. If your customers are unhappy about the way you collect data about them and how you use it then you will find yourself with fewer customers. While we can count on the government to create overly restrictive regulations and we can count on the captains of industry to choose ways and means that are beneficial only to stockholders, we marketers must be customer champions and support their cause - or risk losing them.

Goallover: Really? Are you saying that you think the steps being taken are truly enough to satisfy the public’s elected politicians and soothe the privacy lobby?

Jim Sterne : The danger is that an elected official will be more inclined to vote for an abundance of restrictions if the public is whipped up into an illogical frenzy. The “privacy lobby” is made up of groups found along a spectrum from altruistic to conspiracy theorists with the vast majority actually concerned about the well being of the populace. Those on either end of the bell curve tend to be more vociferous and more adamant and get more attention than the majority who have invested the time to understand the issues and have important thinking to share.

Are the steps being taken enough? One can only hope.

Goallover: Is the WAA quietly relieved that the FTC has apparently granted greater analytical freedom to publishers and retailers, and chosen to focus on behavioural advertising technology?

Jim Sterne : There’s no sense of relief. Behavioural advertising is a core element of web analytics. The WAA is interested in everything related to digital marketing measurement. If serving up targeted advertising is deemed despicable, it is a short step to denouncing the cookie.

Goallover: But the FTC focus seems very much on the ability of an invisible intermediary technologist to collate data, rather than the “cookie” per se. Do you think web analytics tools have avoided the limelight because none of the analytics companies have yet tried to collate their client data into wider metrics, effectively compiling “networks”?

Jim Sterne :  Analytics companies - now known as marketing optimisation and business optimisation companies - are not in the business of collating their client data because (and this is very important) it is their clients’ data. This data is being collated with all other data each client has internally but is not part of a wider aggregation.

Goallover: Jim, please clarify this. You are saying that analytics companies are working with clients’ data. Would you say that it is when analytic technologies or intermediary agents seek to make this client data their own that the industry gets into trouble?

Jim Sterne : Analytics companies are not working with clients’ data. They are collecting their clients’ data on behalf of their clients so that their clients can work with it.

Audience measurement companies like comScore, Hitwise, Neilsen and the like are in the business of selling Internet user data that can be collected outside of the walled garden of the corporate website. They empanel users who are willing to share their personal surfing data, aggregate it with all the other users and publish statistical assumptions about what’s happening on those corporate sites.

Google has started offering a Benchmarking service which allows you to, “Find out whether your site usage metrics underperform or outperform those of your industry vertical.” In this case, the Google Analytics user opts-in, “to compare your key metrics against aggregate performance metrics while preserving the confidentiality of your data.” Opt-in in this case, refers to the company using Google Analytics being willing to share their account data in an anonymous, aggregated format.

Goallover: That seems to be possible without the need to capture any kind of personally identifiable information – but when, in the opinion of the Chairman of the WAA, do technologists cross the line of acceptability, incur the wrath of the privacy lobby, and increase the risk of government regulation?

Jim Sterne : When they use information about their customers instead of for their customers. OK, that’s a little too granola even for me, but it boils down to, “When you upset your customers.”

Some privacy advocates are concerned that if www.whitehouse.gov uses cookies because they might monitor what individuals are looking at and use that against them in their FBI files or at tax time. I’d say this was nonsense as the U.S. government has better things to do with its time. Then along came the Bush Administration with their shock and appal policy of recording every phone conversation and every email. Makes one nervous.

On the other hand you would not get nervous if Sainsbury’s drops a cookie while you admired Mr Bunbury Millionaires Shortbreads on their website. Should they then send an email that offered a discount on a tin of Slimfast Banana Delux and Zotrim Weight Management Herbal Preparation, it would make you think twice about going back to their website.

Goallover: And finally, for our international readers Jim, you travel extensively. Do you come across any obvious market differences between (for example) the USA and Europe, which you believe will impact on this industry debate?

Jim Sterne : Europe has a much lower tolerance for data misuse than the U.S. When my niece came home from the hospital with her new son she was not surprised to find her mail box stuffed with offers and come-ons from every company that could find a creative way to tie their offerings to a newborn. We accept that as a way of life over here and are glad that postal rates are high enough to dissuade even more of the same.

Beyond that, there are marketers all over the world desperate to know if their online investment is working and desperate to give website visitors a better experience. There are privacy advocates who want to stop this perceived invasion of privacy from growing. There are government officials who are keeping an eye on the general population to determine whether an up or down vote will be met with delight or derision. Meanwhile, my next door neighbour doesn’t really seem to care much at all.

And now I have a question for you - how does one pronounce Goallover??

Goallover: Now Jim, you’re the “professional explainer” not me and anyway - I’ll be the one asking questions around here young man! Seriously, you’re not the first to ask, and I hope not the last. The answer is – it is up to you, it’s “a moment of freedom” in which you get to decide. Meantime, thank you very much for agreeing to this interview for Goallover, and we wish you and the Web Analytics Association the very best for the future.

© 2009 GOALLOVER.