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FTC “Do Not Track?” Bring it on …

Published by Eric T. Peterson on December 2, 2010 All posts from Eric T. Peterson

As the hubub around consumer privacy continues I was gently prodded by a friend to pipe up in the conversation.  While my feelings about how we have ended up in this position are pretty clear, and while my partner John and I have proposed what we believe is a step in the right direction regarding online privacy and the digital measurement community, it seems that some type of ban or limitation on online tracking is becoming inevitable.

Without getting political or debating the reality of what we can and cannot know about online visitors I have a single word response to the FTC:

Whatever.

Before you accuse me of changing my stripes or going completely nuts consider this: If the FTC is able to somehow pull off the creation of a universal opt-out mechanism, and if the browser developers support this mechanism despite clear and compelling reasons not to, and if consumers actually widely adopt the mechanism — all pretty big “ifs” in my humble opinion — then I believe the digital measurement industry will do what I have already described as inevitable:

We will hold a revolution!

Since my tenure at JupiterResearch back in 2005 I have been telling anyone who would listen to stop worrying about counting every visitor, visit, and page view and instead start thinking about statistically relevant samples, confidence intervals, and the algorithmic use of data to conduct analysis.  Yes, you need to work to ensure data quality — of course you do — but you don’t have to do it at the expense of your sanity, your reputation, or your job …

See, it turns out in our community it doesn’t really matter whether we are able to measure 100% of the population, 90% of the population, or even 80% of the population — what matters is that we are able to analyze our visitor populations and that are able to draw reasonable conclusions from that analysis.  Oh, we have to be empowered to conduct analysis as well, but that’s a whole other problem …

Statistical analysis of the data … trust me, it’s going to be all the rage in a few years. I’m not saying this simply because I have a white paper describing the third generation of digital measurement tools that will empower this type of analysis … although I would encourage you to download and read “The Coming Revolution in Web Analytics” (freely available thanks to the generous folks at SAS!)

I’m saying this because every day I see the writing on the wall.  Data volumes are increasing, data sources are increasing, and demands for insights are increasing, all while professional journalists, politicians, and political appointees are supposedly protecting our “God-given right to surf the Internet in peace” without any regard to the businesses, employees, and investors who depend to a greater or lesser degree on web-collected data to provide a service, pay their bills, and make a profit …

Okay, sorry, that was editorializing.  My bad.

Still, rather than wring our hands and gripe about how much the credit card companies know (which is a silly argument given that credit card companies provide tangible value in exchange for the data they collect … it’s called “money”) I believe it is time to do three things:

  1. Suck it up.
  2. Hold yourself to a higher standard.
  3. Buy “Statistics in Plain English” and start reading.

The good news is that we have access to lots and lots of great statistical analysis of sampled data today — we just might not realize it.  Consider:

Have I mentioned Excel, Tableau, and R?  Hopefully by now you get the gist … statistics is already all around us all the time, perhaps just not exactly where we expect it or, in the context of lower rates of data collection, where we will ultimately need it to be.

Perhaps the most encouraging evidence that we will be able to make this shift is the increasing attention the digital world is getting from traditional business intelligence market leaders like Teradata, FICO, IBM, and SAS.  I, for one, am more or less convinced that the gap between “web analytics” and “Analytics” is about to be closed even further … and here’s one guy that seems to agree with me.

We don’t need to thumb our noses at the privacy people — quite the opposite, and to this end John and I will be sitting down with a representative from the Center for Democracy and Privacy and Adobe’s Chief Privacy Officer MeMe Rasmussen at the next Emetrics in San Francisco! We also don’t need to stick our head’s back in the sand and hope this issue will simply go away — it won’t, trust me.

We need to prepare.

Prepare by committing yourself to not being that scary data miner that consumers are supposedly so afraid of; prepare by improving your data quality to the extent that you are able; and prepare by starting to communicate to leadership that it really doesn’t matter if you can count every visitor, every visit, and every page view — what matters is your ability to analyze data using the tools at your disposal to deliver value back to the business.

If you’re not sure how to do that, call us.

Viva la revolution!

DISCLOSURE: I mentioned and linked to lots of vendors in this post which I normally do not do. Some are clients of Web Analytics Demystified, others are not. If you have concerns about why we linked to one company and not another please don’t hesitate to email me directly.

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Categorized under Cookies, General Web Analytics, Web Analytics Association

  • http://www.socialsecurity.gov Tim Evans

    Thanks, Eric, for the (as-usual) on-target post.

    From a public-sector point of view, it’s, umm, interesting that while the left hand (the White House) has opened up on Federal use of persistent cookies, the right hand (FTC) seems to be making it harder for us to use analytics to figure out how to make Government web sites better.

  • http://bobbleheadguru.com Farris Khan

    I like your frame of mind with respect to this topic. At the very least, there will probably MORE demand for web analytics as organizations find ways to fit within the framework of regulators. That may be good news for everyone who embraces staying in compliance while still producing actionable results.

  • http://www.mvconsultoria.com Sergio Maldonado

    All good points, Eric. The truth is opt-out is not a bad outlook when you consider that we are all going the opt-in way on this side of the pond (EU level, with a newly amended article 5.3 of the ePrivacy Directive due to be implemented by all EU members before June 2011).

    It will sound like a joke to many, but it is happening and many are expecting a website to come up with all sorts of fancy pop-ups requesting a user’s permission. Luckily, it will only affect cookies that are not considered essential to the functioning of the service the user is requesting from a website. Arguably, even WA first party cookies are part of the basic maintenance expected for such services (considering that the law is actually aimed at regulating 3rd party cookie-driven ad networks).

    Finally, if you do find the time, just check out the Opinion 2/2010 on online behavioural advertising at http://ec.europa.eu/justice/policies/privacy/workinggroup/wpdocs/2010_en.htm.

    Hence, I could not agree more: Do Not Track? Bring it On! :)

  • http://michaeldhealy.com Michael D. Healy

    Eric:

    Great to see R finally getting some love in the mainstream community, Excel is actually a pretty good tool for what it does but R is the real deal.

    Statistical Significance:
    I have pitched precisely the type of analysis to more than one potential client and they didn’t go for it. My guess is that the marriage between personnel from different backgrounds in web analytics still has some rocky moments coming, with quantitative backgrounds gaining relevance.
    At the recent SF Bay Area ACM Data Mining Camp ( http://www.sfbayacm.org/?p=1341 ), the vast majority of discussions revolved around various online data, how to measure and influence.
    The tools used? R, R, more R, as well as the tools on the sponsor list.
    I can say from limited personal experience, clients/employers don’t always like it when you professionally let them know that just ‘because’ you can slice the segment one thousand times doesn’t mean that you ‘should’ do it.
    Or, as my friend Kevin Potcner put it:
    “Many web analytics studies are challenged to produce useful results because there’s often substantially more natural variation in the human behavior being studied and in the resulting data than the size of the effects that the studies are trying to detect.”
    http://michaeldhealy.com/2010/11/suggesting-statistical-significance/

    Government:
    I will disagree slightly with your editorializing, two different internet standard state that browsers should block third party cookies by default. The standards from February 1997 and October 2000 are available at http://tools.ietf.org/html/rfc2109 and http://tools.ietf.org/html/rfc2965, respectively.

    Furthermore, the Constitution of the State of California, everyone else is on their own, explicitly states the following:
    SECTION 1. All people are by nature free and independent and have
    inalienable rights. Among these are enjoying and defending life and
    liberty, acquiring, possessing, and protecting property, and pursuing
    and obtaining safety, happiness, and privacy.
    http://www.leginfo.ca.gov/.const/.article_1

    We also have the Online Privacy Protection Act of 2003 http://leginfo.ca.gov/cgi-bin/displaycode?section=bpc&group=22001-23000&file=22575-22579 , and the Shine the Light Law http://www.leginfo.ca.gov/cgi-bin/displaycode?section=civ&group=01001-02000&file=1798.80-1798.84 both of which provide some privacy protection.

    While not sharing a corner with the Luddites, if companies don’t like the current legal situation they have the ability to lobby and get laws changes.

    Until then, the law is the law.

    Michael D. Healy

  • http://web.analytics.yahoo.com Matt Lilliig

    Yahoo! Web Analytics is another platform that uses sampled data for its Interest Group reports. Essentially, it allows the analytics user to better understand what their web site audience is interested in (based on Yahoo’s massive amount of anonymous user data).

    Publishers and advertisers love this report because they can use it to invest in advertising campaigns targeted towards the most rewarding Yahoo! Interest Categories and also tailor their content towards the most attractive segments.

    But what people need to remember is that there is value being provided to ALL parties in exchange for the anonymous data collection. The publisher and advertisers get better insights about their web site audience which allows them to provide better targeting and web content leading to a better web site and online ad experience for the consumer/visitor (those being tracked).

    With out data collection, one is left with guessing and hypothesis.

  • http://www.the-omni-man.com Adam Greco

    Here is an article on this from CNN Money. It raises some good points: http://money.cnn.com/2010/12/02/technology/ftc_do_not_track/index.htm

  • http://michael.westendintie.net Michael Dlugosch

    The idea that data sampling equals data falsification seems to be as ineradicable as the focus on feelgood metrics (“Yeah! But how many PEOPLE were visiting our web site last month?).

    This seems to be the case particularly for smaller markets, where marketers’ prevalent strategy simply is to throw more and more people into their conversion funnels. At the same time these marketers seem to be more and more incapable of improving their funnel dropout rates, as: “We don’t have resources available in our IT department!”

    I seriously welcome initiatives like “Do not track” / the according EU directives. It finally will help us cutting through all the grease and grime of “Have we really tracked every single page view?”, and it would allow us to re-focus on what really matters: building services which are perceived as relevant by those who are using it.

  • http://blogs.gartner.com/ Bill Gassman

    Well put Eric, as usual, pointing out the importance of some tracking, and showing how the Web analytics industry is starting to use real analytics. However, discrete user tracking and scoring will not die. While statistical analysis is an important arrow in the quiver, increasing number of firms are using segmented extracts to drive downstream marketing tools. Discovering which segments to target, through data mining of high-quality information is important. The yield from context rich email, advertising and web content is too high to allow the data-mining genie to be put back in the bottle. When it comes to tracking, there are two degrees of scope to the issue, that being local to the site and cross-site tracking. Getting an email from the vendor of the shopping cart you just abandoned is one thing, but seeing an ad for the product on another site is attracting the wrong kind of attention. The government saber rattling may help move the technology and processes forward – but opt-in is hardly going to be the answer that keeps an economy growing. Perhaps it is a generational thing – that will become less offensive as our culture absorbs the new way of doing business.

  • http://www.webanalyticsdemystified.com eric

    Thanks everyone for your replies and let’s keep the conversation moving!

    Tim: Umm, yeah, like I said I didn’t want to dive into the politics … but since you asked, what the heck is going on in Washington? White House and FTC is one thing, but the FTC and some legislators appear to be ready to throw the baby out with the bathwater without considering what this change would mean to the growth engine we call THE INTERNET.

    I am just hopeful that at some point Eric Schmidt, Steve Jobs, John Chambers, Larry Ellison, Steve Balmer, Jeff Bezos, Mark Zuckerberg, etc. will fly to Washington and clarify what a “Do Not Track” list will cost each of their companies. It’s not as if we track for fun … this is a business.

    Oh well.

    Farris: Thanks! At the risk of sounding like a “smug analytics punter” in a way I relish the change were it to happen. It would be a stark reminder that our data is no better than the offline sampled data direct marketers have been using for decades — it’s still crappy, only we have a lot more of it.

    Sergio: Great to hear from you again my friend, how is life in Spain!? I haven’t yet read the document you referenced but I am very interested in the phrase “essential to the functioning of a service” since I very much consider web analytics cookies to be “essential” … although I may be biased since they are also essential to my ability to feed my children. LOL!

    Seriously, we are looking to Europe to do the right thing in this regard and consider that the Internet is very much subsidized by data collection, either in the form of data mining for insights, behavioral targeting, and plain old justification of expenses.

    Michael: Good points, except I’m not sure any of the third-party cookie “standards” you cite are followed in any practical way. Clearly third-party cookies are in use … otherwise we wouldn’t be having this conversation. We can, as analysts, of course rely exclusively on first party cookies — and we probably should (hmmm, why do I feel like I have been saying that for nearly six years!)

    Going back my post on “We are our own worst enemies” … we have done a piss-poor job collectively of representing our best interests in both the consumer arena and also in the vast pit of politics. The reasons are obvious, glaringly so thanks to the WSJ series and the recent FTC news, but we need to A) accept responsibility and B) do something about it.

    Matt: Sort of, but again you don’t have information on everyone coming to my site as measured by YWA; you have information about a (hopefully) representative sample. I’m good with that, although you may recall that I have been asking for years for better insight into the size and statistical validity of your sample … still waiting for that ;-)

    If I were a betting man, which I’m not really, I would venture that in a few years most of what we do in “web analytics” looks more like your demographic sampling and less like the “count every hit” insanity we engage in today.

    What do you think?

    Adam: Thanks for piping up my friend! I especially like this comment in the CNN piece:

    “But those in the industry warn that such an overarching policy would put billions of e-commerce and advertising dollars at risk. It could also unleash all kinds of unintended and undesirable effects on the very consumers the FTC is trying to protect.”

    Uh, yeah, you think? Facebook is a far less interesting advertising engine without cookies, and I suspect a lot of what Google gives away for free (in exchange for data, ahem, Google Analytics) will be a whole lot less free if that data isn’t coming back to them.

    Michael: Yes! The problem is that using statistics and samples I can tell you how many people visited your site in the past month. What’s more, I can tell you what my confidence is in that number and I can also account for known challenges like A) cookie deletion, B) multiple browsers, C) multiple devices, etc.

    How cool is that? Josh Chasin and Jody at comScore know. You and I know. My readers know. But we are still in the minority.

    I want one of the vendors to build me a “sample only” web analytics solution that lets me model my counts based on reasonable assumptions and provides a summary of the quality of each measure presented in an easily understood way. Who of the vendors reading this comment are up to the task?

    Bill: Great to hear from you again, Bill, and thanks for the comment! I completely agree with your assessment but you see the trap we are in, right? We don’t have the same problem the IAB has … we don’t need to see every single hit to generate our reports and conduct our analysis. But legislation against the behavioral advertising and targeting community directly impacts what we do since we are in woefully unprepared to deal with government-mandated cookie destruction.

    Does that make sense?

    Great point as well about this being generational. It is also interesting to think about all this in the context of the recent elections, the emergence of the “Tea Party”, and stuff like that. I don’t want to editorialize any more, at least not in the blog, but I personally think all of this stuff is a huge step in the wrong direction …

    Good think I kept my boxed copy of Webtrends Professional 3.0. Who knows when I might need that. ;-)

  • http://www.twitter.com/bigbryc Bryan Cristina

    Great points.

    We have a (small) group of people here who cry out everytime they count some of their real back-end data with my web reports because there’s a 3-4% difference in the numbers.

    I simply point out that it’s a marketing tool, and if we have data that has a sample size that represents 96% of all visitors, I think we’re in pretty good shape. Knock it down some, well, it’s still incredibly valuable.

  • Pingback: Ethically Dynamic Analysts | MichaelDHealy.com

 


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