The topic of privacy in behavioral targeting seems to come in waves. One minute, it’s all anybody talks about, and you’d think the entire infrastructure of the Internet would come crashing down if somebody didn’t solve this problem right quick. The next minute, it seems we’ve got a ‘Don’t ask, don’t tell’ policy, and the issue gets shunted to the back burner.

Just recently, we’ve been squarely in that first phase, starting with

Anecdote 1: Elyse Tager’s piece Privacy and Behavioral Targeting Heat Up at ClickZ.

Elyse talks about the challenges faced by cookie-based behavioral targeters who use historical information to infer future behavior:

NebuAd launched with all best intentions, attempting to address the issue of scale with its now huge network — a major disadvantage for behavioral targeting in most cases. Plus, NebuAd has a robust privacy policy addressing consumer concerns directly.

But last week, two of those ISP partners backed out of the relationship. Charter Communications announced it was withdrawing due to subscriber concerns. CenturyTel is pulling out after the warnings from Reps. Edward Markey, a Massachusetts Democrat, and Joe Barton, a Texas Republican, who said the technology “raises several red flags.”

The red flags in question have to do with the amount and detail of data being collected about individuals. It’s a problem endemic to targeting solutions that rely on knowing as much detail as possible in the hopes that the behaviors will be repeated.

Tager points out two solutions being proffered: data portability and predictive modeling.

Another solution, which I covered in earlier columns, is predictive modeling to better target behavior. Companies such as aCerno and Epic Advertising use advanced algorithms and technologies that don’t rely on cookies to establish inferred behavior, which is less intrusive and far more predictive of future behavior, according to these suppliers.

As you’ll know if you read this blog with any regularity, VortexDNA relies on a predictive modeling approach.

Personally, I believe data portability is only a solution for the technological elite. It is simply not feasible to ask my mom to manage her data.

The FTC is pushing for self-regulation. If the issue were between the Market forces, on the other hand, will make a difference. NebuAd’s ISP partners backing out will make a difference. Will it be enough, though? Congress might not think so, which leads us to

Anecdote 2: Heather Green’s piece Congress to Push Web Privacy at BusinessWeek.

On the second page of the article, Green mentions The Center for Democracy and Technology’s desire for a Do Not Target list (along the lines of the Do Not Call list). What she doesn’t mention is the obvious problem with such a list: in order to not target you, they have to know who you are. So you have to register in some way, giving them the very information you’re hoping to keep from them.

She closes with an apt comment on the benefits of federal privacy legislation:

Some in the industry think that legislation might be the way to set a common standard and avoid inconsistent, piecemeal legislation on the state level. Microsoft came out in 2005 in favor of federal privacy legislation and thinks others are beginning to agree. “Companies are coming around to the notion that it’s not only compatible with their business practices but [that it] can help them by enhancing consumer trust and making compliance more streamlined,” Microsoft’s Hintze says. Microsoft advocates privacy baselines that cover not just the online collection of data, but offline collection as well.

David Hallerman, analyst at researcher eMarketer, says legislation would go a long way toward assuaging fears of advertisers who fret consumers don’t want their privacy compromised. He says that if an online privacy law were passed, “the benefit would be there for advertisers, publishers, and the public.”

Given public concerns about privacy, I tend to agree with Hallerman. Allow companies whose practices are aboveboard the opportunity to be recognized as such. I like that Microsoft is getting behind it. Google seems to be going in a different direction, as evidenced by

Anecdote 3:Wendy Davis’ piece Polish On Google’s New Chrome Tarnished By Privacy Questions at the Daily Online Examiner.

So Google is finally trying to take the battle to the Microsoft-controlled browser terrain, instead of just hanging out comfortably on the high ground of search and letting Microsoft lose battalion after battalion in a series of poorly-planned attacks. According to Davis, though, the new browser is a long way from offering any privacy benefits:

…the browser raises significant privacy questions. Google states in the Chrome privacy policy that it will log the IP addresses of people who download the browser. It also says that all URLs or other queries typed into Chrome’s address bar will be sent to Google, which will use that information to make suggestions to users.

The browser’s privacy policy says it will “process” information received from Chrome users but — in a crucial omission — doesn’t say whether it will retain the data or for how long: “Information that Google receives when you use Google Chrome is processed in order to operate and improve Google Chrome and other Google services,” the policy states.

I don’t think consumers are going to go for it. It’s too intimate to gather these different services together. It’s like your bank buying your DVD store, and the guy who approves your loans also gets to know about your perverted taste in movies.

The bottom line is that the privacy landscape is shifting. So how should you handle your own privacy policies?

Do the right thing.

Some years ago, a friend of mine urged me to become an SEO, touting tactics that were legal and fine at the time but that would be considered black hat today. “It’s so easy! All you have to do is use this automated program that will create hundreds of sites at once, all linking back to your client’s site.” Thankfully, I didn’t go for it; I might have made money in the short term, but it would have been bad news in the long run.

The same holds true for privacy. Forget about what you can technically get away with, or what you can assume your customers won’t notice. Just do the right thing. Be fair. Consider the customer. Consider the cost to them as well as the benefit. And behave in a way that lets you hold your head high.

In a mixed up, muddled up, shook up world, your integrity is a real asset.

Your thoughts on this topic are welcome.

Hello dear readers!

As you well know by now from reading this blog, the VortexDNA algorithm creates numeric profiles for websites or objects by aggregating the profiles of everyone who has visited that site or object. So if a site is visited by someone with number 100 and someone with number 200, the site’s profile becomes 150. That’s dramatically simplified, obviously, but the essence of it is accurate.

That mechanism leads to an obvious chicken-and-egg variable: in order to be able to indicate relevance, the objects or sites have to have enough data to generate an accurate profile. If only the person with the number 100 visits the site, the site’s profile will not be complete. You cannot access the wisdom of a system by looking at only one of its component parts.

Right now, we’re working at further developing the wisdom of the VortexDNA system; to do this, I’d like to ask your help. We’ve created the VortexDNA intention game. If you spend a few minutes playing around with it, you can help us generate more accurate data that isn’t specific to any one individual.

It only takes a few moments, so go on, take a break from work or the Democratic National Convention and have a play.

Thanks in advance!

In complex systems, the boundaries are what define the size of the system. In the research that generated the VortexDNA algorithm, companies—which are themselves complex systems—were shown to have five boundaries:

• staff
• shareholders
• customers
• community
• society

Each person’s complex system has five corresponding boundaries:

• happiness
• earning respect
• relationships
• community
• society

We’ve explored before the concept that the boundaries are not independent of each other. Those companies, for example, that have an inclusive focus on all five boundaries are the ones that significantly outperform the rest of the market. This makes a lot of sense if you think about it: imagine a company that took really good care of its shareholders, its customers, its community and its society, but that neglected its employees. This fictional company would not have a sustainable model, because ultimately the people who drive the corporate activity would not continue to perform.

In previous posts, I’ve shown the integrated nature of these boundaries by drawing a circle encompassing the five individual boundary circles.

But I’ve recently been visualizing it in a different way, and I wanted to share it with you and get your feedback.

Boundaries in Complex Systems

The reason these things are interconnected isn’t because there’s a circle around them, it’s because each one interacts with the others, and any friction in that interaction affects the effectiveness of the system.

So the boundaries are really more like gears with ratchet teeth, which work really well if they’re all traveling in the same direction. If one focus area starts to go the other way, though, the system faces real problems. So the boundaries might be better visualized this way:

The innermost circle is Happiness, followed by Respect, Relationships, Community and Society. You can easily see how one boundary might be bigger than the next but they all have to work together for the system to function.

In my next post, I’ll discuss Big Tobacco and complex systems. For now, I invite your feedback on this revised model. Does it make sense to you?

As promised, I’ve created a simple video of my presentation at WORLDCOMP’08, the International Conference on Semantic Web and Web Services. The whole thing is around 20 minutes long; I’ve broken it up into three short segments.

You are also welcome to download the PowerPoint slide show here. (Note: It’s just over 5MBs.)

I hope you enjoy the presentation, and I look forward to your feedback in the comments!

Part I: What is a complex system?

Part II: Complex systems at work

Part III: Predicting human behavior

I thought it would be unfair to spend last week blogging about all the other presenters at WORLDCOMP’08 and OMMA Behavioral without sharing my own presentation with you! So I’ve recorded it, and I’m putting it together with the slide show so you can share in the love. Expect the video sometime tomorrow.

In the meantime, I’d like you to enjoy a delightful piece from Nicholas Carr at The Atlantic called, Is Google Making Us Stupid? Nicholas has written a long article about our growing inability to consume long articles.

Here is one of the many passages that should rekindle your ability to ponder:

For me, as for others, the Net is becoming a universal medium, the conduit for most of the information that flows through my eyes and ears and into my mind. The advantages of having immediate access to such an incredibly rich store of information are many, and they’ve been widely described and duly applauded. “The perfect recall of silicon memory,” Wired’s Clive Thompson has written, “can be an enormous boon to thinking.” But that boon comes at a price. As the media theorist Marshall McLuhan pointed out in the 1960s, media are not just passive channels of information. They supply the stuff of thought, but they also shape the process of thought. And what the Net seems to be doing is chipping away my capacity for concentration and contemplation. My mind now expects to take in information the way the Net distributes it: in a swiftly moving stream of particles. Once I was a scuba diver in the sea of words. Now I zip along the surface like a guy on a Jet Ski.

I too read less. These days, when I am inclined to pick up a “book” (a strange device with physical pages and black ink), I lean more towards Grisham than Goethe. I find that I have to force myself to read the sort of non-fiction that keeps my mind sharp and my thinking fresh.

So in the interest of keeping this post at a length commensurate with our newly shortened attention spans, I’ll stop here and turn it over to you. Have you found your thought processes changing with the use of the Interweb? Are you more in the market for ‘War and Peace’ or ‘Dilbert’? In short, has the Internet made you stupid?

Starting Monday, I’ll be blogging from WORLDCOMP’08, a collection of twenty-five joint conferences in Las Vegas.

Here are some of the keynotes you should tune into this blog for:

The Parallel Computing Landscape: A Berkeley View 2.0
Prof. David A. Patterson, Pardee Prof. of CS; Director, RAD Lab & Par Lab; Past President, ACM; Member, National Academy of Engineering; Member, National Academy of Sciences; Fellow of IEEE, ACM, & AAAS; University of California at Berkeley.

Searching in the “Real World”
Prof. Ophir Frieder, The Royden B. Davis, SJ, Chair in Interdisciplinary Studies at Georgetown University; IITRI Chair Professor of CS at Illinois Institute of Technology; Director, Information Retrieval lab; Fellow of IEEE, ACM, and AAAS

Achieving your Dreams
Anousheh Ansari, CEO, Chairman and Co-founder of Prodea Systems, Inc., USA; Space Ambassador
(Ansari, as in, “Ansari X-Prize…”)

Dimensions in Reconfigurable Computing: A New Wave in Electronic System Designs
Chris Phillips, Vice President of Engineering at ElementCXI, USA

I’m resting my fingers in preparation for the excitement. See you Monday!