DEA

If you’re a fan of professional print journalism, you may be a little worried as of late.  Denver’s Rocky Mountain News just closed its doors after nearly 150 years in the news game.  Meanwhile the San Francisco Chronicle and the Seattle Post-Intelligencer are both on life support.  Even the New York Times, the largest newspaper in America, has cut its dividend and mortgaged its headquarters for $225 million.

It seems clear that the age of broadsheet newspapers is coming to an end, yet the web hasn’t come to its rescue.  Partially this is because ad rates from the old world of print were inflated to reflect the size of the total audience of the paper.  Online ads, by contrast, are micro-targeted at just those folks who advertisers believe are most likely to buy their products or services.  This makes sense, but the numbers involved are still staggering.

Consider that the New York Times online as of 2007 had about 13 million unique users.  Compare that to its weekday circulation of 1.1 million and its weekend circulation of about 1.6 million.  The Grey Lady’s web presence had tenfold the reach of the paper, yet online revenue made up only about 10% of the Times total revenue.  That means that a product with ten times the reach is getting only 1/10th of its old-school equivalent.

Long story short: the industry needs all the help it can get.

This is where Google comes in.  Along with being a giant in the search industry, Google is empowering a network of publishers to the tune of $4.2 billion in revenue passed to them in 2007—according to members of Google’s DC office, the 2008 numbers are even larger.  In fact, Google knows it is better to give than to receive—it gives more money out to its publisher network than it keeps for itself in profits.

Now this giant of monetization is introducing an even better advertising mechanism, Google’s “Interest Based Advertising” program.  IBA works by collecting information whenever a user visits a site that features a Google AdSense network ad.  This information is turned into a sort of a profile that helps to focus ads on a per-user basis, rather than just basing that ad on the content of the web page alone.

This means that advertisers will have a more effective means of getting their message out online—news that should be music to the faltering print news industry’s ears, not to mention their loyal readers.

Understandably, this news sounds ominous to many.  Tracking your browsing?  And we were worried about the Bush administration tapping our phones!

However, unlike when dealing with government looky lous, you have the choice to tell Google to mind their own business.  Also, Google is telling consumers about the program.  Folks concerned with privacy issues call these elements “notice” and “choice.”

The notice comes in the form of clear labels on all Google-based ads, something the company already does with the exception of some of their print ads.  Currently, all ads served by Google feature their name, but some don’t feature the name of company paying for the ad spot.  Now that will change.  Users will know that Google is serving the ad and who’s paying them to do so.

Additionally, Google is allowing users to choose—this is the control part—how they’re classified by the new program.  Their Ads Preferences Manager will let users view, delete, or add interest categories associated with their browser so that the advertising they see will at least be relevant to them.

Finally, Google is also giving consumers the ultimate control over the program in the form of a set of tools to permanently opt-out.  They have even designed plug-ins for browsers that will maintain your opt-out choice.

It remains to be seen how this program—and others started much earlier by Yahoo! and other Google competitors—will increase revenues for publishers.  However, since all of these systems are designed to serve more relevant ads to consumers, it would seem that all parties involved stand to benefit.

Yet, there is sometimes no satisfying the privacy alarmists. The AP relayed this comment from EPIC’s Marc Rotenberg:

“This is a very serious development,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center. “I don’t think the world’s largest search engine should be in the business of profiling people.”

Yet, with all Google is doing to allow users to opt-out of this system, one wonders if Mr. Rosenberg and those who share his opinion believe there should be any innovation whatsoever in online advertising, or if the industry should simply come to a stand-still.

Criticism of Google’s plan seems especially dubious given the alternatives offered.  Mr. Rotenberg believes that the FTC should reexamine Google’s merger with DoubleClick.  Translation: consumers are too dumb to manage their privacy, so the FTC should do it for them by tearing apart business deals that are deemed unsavory.

The appropriate level of privacy in our lives can’t be set by the government. It can only be set by free people able to explore the full range of choices offered in the marketplace.  When you consider not only Google’s consumer-friendly ad program, but other products like pre-paid cell phones, nameless debit accounts, proxy servers, anonymous email accounts, and the like, privacy seems to be out there for those who want it.

The best advice for those who want privacy: don’t go online.  The Internet is the modern public square, no more a private retreat than is a public park.  Technologies can help to mask your identity, but ultimately much can be found out about who you are online.  The only thing stopping that now is the free market’s respect for contracts and the choices of consumers.  Attacking that very freedom to choose is no way to secure great privacy in the future.