Useful Behavioral Advertising Terms

You don’t need a degree in advertising jargon to understand how behavioral advertising works. But knowing a few basic terms will help you decipher different companies’ advertising practices:

Advertiser – The “advertisers” are the companies whose products or services are being advertised. For example, you may see ads for Netflix; Netflix is the advertiser.

Publisher – The publishers are the companies running Web sites where ads appear. Thus, for example, CNN.com, where you may see an ad for Netflix, is a publisher.

Ad Network – Ad networks are companies that serve as intermediaries between advertisers and publishers. Most ad networks have contracts with many different advertisers and many different publishers. They have access to many different ads and deliver them into advertising spaces on Web pages of publishers. In the context of behavioral advertising, ad networks compile profiles of Internet users and decide which ad is shown to which user.

Cookie – A cookie is a small piece of text that a Web site saves on your computer and retrieves when you revisit that Web site. Cookies used for behavioral advertising usually contain text that uniquely identifies your Web browser, so that advertisers or ad networks can recognize the same Internet user across different Web sites or multiple times on the same site. Here is just a snapshot of what the list of cookies stored on a typical Internet user’s computer might look like:

First Party and Third Party - When you visit a Web site, it may seem like all of its content comes from one place. In fact, many Web sites draw content – and advertising – from multiple different sources. The site itself is known as the “first party,” while all other sites and companies that deliver content there are known as “third parties.” First-party cookies are delivered by first parties, whereas third-party cookies are delivered by third parties.

Internet Protocol (IP) address – The address of your computer on the Internet. Your IP address gets transmitted whenever you communicate online or surf the Web so that the content you’re looking at or the people you’re talking to can know how to find your computer on the network.

Personally Identifiable Information (PII) - Traditionally, PII has been considered to include information that can directly identify you, like your name, address, email address, or telephone number. This is what most companies means when you see them use the term “PII” or “personal information” in their privacy policies. Recently, however, there has been some debate about whether other kinds of information — like the IP address that identifies your computer on the Internet — should be considered PII, so this definition is somewhat in flux.

Drawn from the Center of Technology & Democracy (CDT)

What you should know about PII

First off, PII stands for Personally Identifiable Information.  What this basically translates to is the key data points needed to identify you as an individual.  Where me being a “35-year-old male working in technology marketing in Chicago” would not be PII, “Marcus Tewksbury – Alterian’s Customer Intelligence Director” would be.  The difference is that you can use the later to track me down.

For a more comprehensive definition of the term I’d refer you to the Wikipedia listing: http://en.wikipedia.org/wiki/Personally_identifiable_information

The next thing you need to know is that PII as a distinction is no longer really relevant.  In their February ’09 findings the FTC found “any data collected for online behavioral advertising that reasonably could be associated with a particular consumer or a particular computer or device” is bound by the same privacy considerations.

Here is a good legal synopsis of the FTC findings:  http://www.legalbytes.com/uploads/file/alert09055.pdf

In the short term, most marketers won’t be impacted by the PII conversation.  Where it starts to become relevant is when large players (namely Google and Facebook) start to utilize the hordes of data they capture to target advertising on an individual basis – a practice becoming known as “behavioral advertising.”

From a marketer’s perspective data enabled, targeted advertising is the future.  This type of advertising is simply more efficient and effective.  If you aren’t doing it today, you should be figuring out how you can.  The issue to keep in the back of mind is what steps you are putting in place to protect the consumer at the point of data capture, and at the point of ad delivery.