TEXT OF INTERVIEW
Kai Ryssdal: So you're out there randomly cruising the Internet. Most of the sites you visit are plastered with ads, of course. Those ads don't make it there by accident, you know. Companies have a lot of information that they've gathered about you, and they use that info to tailor ads specifically for you. "Targeting" it's called. There's a lot about that process that regulators find objectionable, so advertisers are trying to head 'em off at the pass. They're introducing a way to opt out of those targeted ads.
Michael Learmonth writes about something that's being called "Power I" -- a little icon on some of those ads -- in Ad Age today. Michael, it's good to have you with us.
Michael Learmonth: Thanks for having me.
Ryssdal: This Power I thing sounds a little ominous. What is it and what does it do?
Michael Learmonth: It's an attempt to sort of put some transparency on online display advertising. So ads you see on the web will allow you to see why you got those ads.
Ryssdal: In other words, what they know about you that made you an attractive target.
Michael Learmonth: That's right.
Ryssdal: So how does it actually work? I mean, what's going to happen when you click on that Power I thing?
Michael Learmonth: You'll get a list of sources of data that was used to target that ad. So you'll probably see two or three companies that collect data, and they'll give you some idea of what that data is. You know, have you researched travel lately? You'll see that kind of information.
Ryssdal: And then I will have a choice to opt out, right?
Michael Learmonth: Yes. You can say no. You can't say, "I don't want that kind of targeting. I don't want these kinds of ads to know this information about me."
Ryssdal: But that's not opting out of advertising entirely, right? I'm just going to see a different kind of ad.
Michael Learmonth: No, you can't opt out of advertising in general on the Web, as much as you'd like to. You can opt out of all the targeting within one ad; that doesn't opt out of the ad. Instead of an ad for, say, an iPhone, which might be targeted at a high-income individual, you'd get a more generic AT&T ad. Many, many big marketers are trying it out, including Microsoft, American Express, Adidas. You're going to see these ads across the Web very soon.
Ryssdal: What is it that they try to get about us and then use and turn around?
Michael Learmonth: Behind online advertising is data, and this is the most sought after resource in advertising today. And a growing percentage of online display ads have a lot of data on you, and use that data to more effectively reach the people they want to reach.
Ryssdal: When you say they have data on you, do you mean like me, me, Kai Ryssdal? Or do you mean me, this 40-something white guy who makes XXX amount of dollars a year?
Michael Learmonth: The latter, 40-something white guy. The personal identifiable information is where they draw the line, and that's something they all pledge not to collect or use.
Ryssdal: Now, it seems to me that they have this information, it's valuable to them -- they're going through a lot of trouble to disclose what they know. Why are they doing that?
Michael Learmonth: Well, they kind of have to. There's a bill that will be introduced in Congress later this year, that would regulate online advertising. The FTC has told the online ad business that they really have one chance to kind of get it right, that they need to figure out a way to disclose what information is being used to target advertising to consumers. And if they don't do that, then regulation is gonna be the next step.
Ryssdal: Is it going to cost these companies any money, though? Any potential lost revenue, because they don't be able to advertise as effectively?
Michael Learmonth: Well, what they hope is this system works, and that it satisfies regulators. And if it does, then it really doesn't cost them anything. They can kind of go about doing what they're doing. This system will cost a small amount of money, maybe a penny per thousand impressions. Marginal costs. But if there is regulation, it's hard to know what that would cost the industry. Obviously, it would affect everyone equally, but it would definitely make online display advertising kind of less appealing to marketers. They might move money into search, which is totally unregulated. So, marketers seeking that kind of targeting would probably go to other types of media.
Ryssdal: Michael Learmonth, he's a digital editor at Ad Age magazine. Michael, thanks a lot.
Michael Learmonth: Thank you.
Ryssdal: It's Power I by the way, as in the letter I, not the eye you see with.