Who Owns Behavioral Targeting Technologies?

As a mother of two, I have seen my share of my children battling it out with shouts of “That’s mine! It’s my toy!” Depending on how strongly either child wants the toy, the end result is that someone will lose and not get to play with the toy. In digital marketing, the toy we all want to get our hands on is behavioral targeting. With such combative titled headlines as “Valueclick Joins Gang-up on Tacoda” and “AT&T To Congress: Google Spies On Web Surfing, So We Will, Too,” there appears to be a lot at stake for all this fighting to be going on.

In the first post, leading behavioral targeting ad network Tacoda is being sued by ad network ValueClick for two patent infringements:

• Method and apparatus for determining behavioral profile of a computer user (1998), which involves creating psychographic profiles of Web users “by recording computer activity and viewing habits of the end user.”
• Computer program apparatus for determining behavioral profile of a computer user (1999), which “provides targeting of appropriate audience based on psychographic or behavioral profiles of end users.”

Obviously, the patents are significant in the behavioral targeting space. ValueClick also filed lawsuits against BlueLithium and Revenue Science over the same two patents. It’ll be interesting to see how this plays out, as the other two ad networks settled. Plus, it’s worth watching to see if ValueClick takes legal action against anyone else.

Based on this litigious activity, ValueClick appears to want to dominate this increasingly crowded behavioral targeting space. Since its first foray into behavioral targeting in 2005 with Precision Retargeting, the company has continued to build on capabilities. That includes its recent release of Precision BT, a behavioral targeting suite for online advertisers. In the meantime, media buyers are sitting on the sidelines, waiting for the dust to settle from all these lawsuits and for ad networks to figure themselves out.

“The business of brokering ads across clusters of Web sites has become one of the most popular — and overcrowded — niches on the Web. The result is a glut of networks competing with each other, confusing media buyers and guaranteeing that some sort of shakeout is inevitable,” according to a “Wall Street Journal” report.

Amen.

In the other report, corporate giant AT&T accuses Google of being a privacy pirate:

AT&T told Congress, “Advertising-network operators such as Google have evolved beyond merely tracking consumer web surfing activity on sites for which they have a direct ad-serving relationship. They now have the ability to observe a user’s entire web browsing experience at a granular level.”

As AT&T tries to position itself as a privacy champion, its argument is offset by its own intent to use behavioral targeting through invasive online advertisers like NebuAd. “The largely invisible practices of ad-networks raise even greater privacy concerns than do the behavioral advertising techniques that ISPs could employ, such as deep-packet-inspection,” it said. The company assures customers that if it was to deploy behavioral targeting, it would do it the right way and “seek subscribers’ affirmative opt-in consent.” AT&T is the child not getting its way, so it’s taking it to Mommy and Daddy (i.e., Congress) to try to get its way. As the article points out, an ISP will always have more information about a particular user than Google, which has network-based targeting. Will we ever know who’s the real wolf in sheep’s clothing?

It remains to be seen who will come out on top of the behavioral targeting technology battles. But as the fight rages on, we can only hope that the one who walks away with the toy will be kind enough to share later on.

Join us for ClickZ Presents: Online Marketing Summit, September 25 at the Sheraton San Diego.