I’ve always been suspicious of behavioral targeting (BT), but not for the reasons that the government is concerned (re: privacy). I have always doubted that publishers would randomly trust a third party with gathering and analyzing all of that data on their audience. This is why Tacoda sold to AOL; it makes sense for AOL to own that technology for its own sites and the additional reach on Advertising.com, but when I ran sales, I wasn’t rushing to embrace BT technologies.
I think while some VCs might make the argument that: “the government could make monetization even harder for online ad networks and publishers through limiting their ability to do behavioral targeting”, it is an overly-simplistic perspective. Trust me, what makes advertisers hesitate to spend money online isn’t a lack of data, it’s a lack of good content.
You can take all of the BT magic and introduce it on MySpace (NASDAQ:NWS), at the end of the day, few marketers really embrace social media and the risk that comes with it. This is why MySpace has MySpace TV, to funnel users away from the racy personal profile pages and onto more professional content. Disclaimer: WatchMojo.com supplies videos to MySpace TV, as we did on Coca Cola’s (NYSE:KO) microsite.
Ultimately, this debate is going to be subjective: as a content producer, I will argue that we need more and better premium and super premium content online to boost online advertising; VCs who have invested in all of these BT bells and whistles need to argue that anything that will hinder the ability of BT firms to do as they please is a recipe for doom.
In the end, the truth is somewhere in between, but there is such a thing as great technology no one wants to use or misused technology (hmm: how about adding Skype to eBay (NASDAQ:EBAY) - great in theory, useless in practice) and BT is probably one of those examples.