Charter Communications has had second thoughts about its audacious plan to collect subscriber data which would be used to serve targeted advertising to customers. The company placed those plans on hold yesterday, in the wake of public outcry and pressure from a few congressmen.
Charter isn't the first company to attempt to break into the targeted advertising market. Google CEO Eric Schmidt has said that the more targeted the ad, the more revenue you can generate from it. Everyone wants in on the targeted ad space -- Charter isn't alone here. Of course, one difference between Charter and other businesses is that Charter would have had unlimited access to volumes of data that other web players wouldn't have. Also, everybody hates cable companies.
"That may have been part of the public reaction, but the government was also looking into Charter's plan, so there was some substance [to their concerns]," says David Hallerman*, a senior analyst with eMarketer.
One small part of the problem, as most regulators and privacy groups saw it, was that Charter would have sold highly-sensitive subscriber data to third-party advertisers, while the option for subscribers to opt out was inadequate. Plus, consumers wouldn't have gotten anything out of the deal.
"What they intended to do was to take all this information, sell it, and give subscribers nothing in return," says David Hallerman, a senior analyst at eMarketer.
The bigger question is whether the fact that Charter overstepped privacy boundaries spells trouble for online marketers. If there was customer backlash against Charter, why wouldn't there be the same sort of backlash against targeted advertising networks? Google is rumored to be planning outdoor advertising (such as digital billboards) that will serve specific ads based on individuals' user profiles, which is gleaned from their wireless web activities. Is that considered invasive?
"ISP derived data is so much more invasive of privacy that it almost makes cookie-derived data look benign," says Hallerman.
Still, Charter insists it's going to roll out some sort of advertising plan that will appease all its critics. We can't imagine it would work unless there's a discounted service for users who opt-in to the ads, but we'll just have to see.
*Yowza! We misspelled Hallerman's name earlier.
See Also:
- Charter Freezes Web Eavesdropping Plan - Update
- Report: NebuAd Forges Packets, Violates Net Standards
- NebuAd Defends Murky System to 'Opt-Out' From Charter Snooping
- Can Charter Broadband Customers Really Opt-Out of Spying? Maybe Not
- Congressmen Ask Charter to Freeze Web Profiling Plan
- Leaked Report: ISP Secretly Added Spy Code To Web Sessions ...
- Charter to Snoop on Broadband Customers' Web Histories for Ad Networks
