I met tech journalist and investor (the term “Internet guru” jumps to mind before the gag reflex goes off) Esther Dyson at a privacy debate hosted by Morris & King in April that focused on potential “Do Not Track” legislation. Although she was just in the audience, she might as well have been on the panel; the attendees were hanging on her every word as she described a consumer opt-in system for online data sharing.

Your consumer data is extremely valuable to advertisers, and it’s your credit card to pay for a buffet of scrumptious Internet content. On a very basic level, Dyson was advocating for a marketplace where consumers could trade their data to publishers for content. The publishers sell the data to various third parties and the information ends up being used to target ads to those consumers. The circle of (Internet) life.

So shouldn’t the consumer be in the driver’s seat? Shouldn’t he or she manage who gets what? Shouldn’t he or she even have the ability to profit from the data like through Personal?

As Dyson opines in a Slate article that expands on her points from the debate, ”Most pundits on both sides—privacy advocates and marketers—don’t realize that rather than protecting consumers or hiding from them, companies should be bringing them into the game.”

To an extent consumers are in control in the data game — they can easily manage cookies and employ increasingly prevalent opt-out services. But Dyson dissects the behavioral advertising status quo, the one the pro-self regulation groups are defending. In the industry, we understand it’s a vocal minority that’s screaming about online privacy; unfortunately complaints are often sensationalized by media outlets trying to lure in readers (cough, Wall Street Journal).

Which reminds me of an exposé on retargeting from The New York Times a while back. As is the cliché format for writing such a piece for an old-school publication, the article begins with an anecdote of an everyday American running into the issue du jour: Julie notices display ads from a site she recently visited are “following” her as she surfs the web.

The ad industry people call it retargeting! Run, don’t walk, to the bomb shelter!

Julie doesn’t panic — she pretty much says, “Once I figured out what was going on, I was OK.” Kinda anti-climatic. It didn’t help that the story treated retargeting like it’s new technology when it has been around for a decade.

Retargeting is a good gateway into the behavioral advertising realm as a consumer doesn’t have to be a genius to understand how it works. Long before I started writing about the digital ad space, I noticed banners appearing for retail sites I had recently perused. I assumed a cookie had been dropped and they were trying to lure me back.

I didn’t think it was creepy; I thought it was clever. And annoying, especially if I had purchased the product or services that the company was retargeting. But to make it stop, I knew I could just dump my cookies.

If I click on the Forward-I icon appearing on an increasing number of behaviorally targeted ads, I can manage who gets my data. Major publishers like Google and Yahoo have very straightforward and easy-to-find control centers for opting-out. The control is there, I just have to find it.

This is the heart of the unspoken agreement between consumers, publishers, advertisers and the tech companies that facilitate this silent arrangement — default privacy settings=share everything (anonymously). Only thing is, forces are colliding to bring the arrangement into the light – especially a federal government that needs an easy win since it’s facing a mountain-side of lose-lose situations.

One problem with opt-out systems and a potential federal do-not-track list is that people that opt out are essentially getting a free ride when everyone else agrees to the toll. Opt-out advocates argue that this will be such a small segment that it won’t matter, but it’s hard not to feel like some spoiled people are cheating the system — Internet content is not free.

And then there’s the issue of regulation, because the Internet is chock full of schemers and scammers — can you really trust the industry to police its own? What exactly happens to offenders — slap on the wrist? Name sent to the government, which then… does what?

In other words, the opt-out OBA solution is flawed, but the NAA will tell it’s the best one we got. People like Dyson disagree and suggest turning the model on its head by making consumers the gatekeepers. “I believe that successful companies will turn personal data into an asset by giving it back to their customers in an enhanced form,” she writes on Slate.

In addition, an opt-in system would make it clearer when companies are up to no good, i.e., using consumer data without permission. What to do with offenders is another can of worms.

But Dyson also highlights the chief problem — no one knows what kind of mechanism can power the consumer opt-in model.

Well, what about device fingerprinting?

The leader in this field seems to BlueCava, a company I’ve written about and whose executives I’ve interviewed numerous times. BlueCava’s technology uses a plethora of signals to recognize your device, even if you ditch the cookies. It pretty much gives your device a an ID; so far BlueCava has tagged tens of millions of devices (PCs, smartphones, tablets) and it’s extremely easy to opt out your data.

In one of its “What They Know” articles, WSJ went off on the privacy ramifications of device fingerprinting but they didn’t investigate the consumer empowerment angle. Identification opens doors, and with a device ID consumers could manage how their data is used.

Combine device fingerprinting with an opt-in model, and the data transaction doesn’t have to be unspoken or buried. It’s right upfront — you visit a website; website gives you a taste, but says if you want full access, you’re going to have to share this and that.

Eureka — transparency now. No tracking cookies needed (for advertising purposes, and one could argue internal analytics as well). The opt-in mechanism is there, the behavioral advertising status quo could upended. The status quo is not necessarily the the best, feasible option.

Because there’s gotta be downsides to opt-in besides implementation — and that’s what a comments section is for.

After years of ping-ponging around various industry publications, Gavin Dunaway finagled his way into the senior editor slot at Adotas, a depot for interactive advertising news and commentary. When not penning snarky articles about social media and behavioral targeting, the Washington, D.C. native and George Mason University graduate enjoys playing electric guitar so loud that the walls shake.

This piece originally appeared at Adotas June 27, 2011. It has been reprinted with permission.

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