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Prepared Testimony:
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October 15, 1999 Mr. Donald S. Clark, Secretary Re: Online Profiling Project - Request to Participate and Comment Dear Mr. Clark: As Chief Privacy Officer for AllAdvantage.com, I respectfully
request to participate in Sessions Two and Three of the Online Profiling Workshop
on November 8, 1999. Enclosed, please find AllAdvantage.com's responses to
several of the questions posed in the Federal Register notice. AllAdvantage.com is the first Internet infomediary to achieve
popular success. As a true Infomediary, AllAdvantage.com works as a personal
agent on behalf of consumers to help them take control over the profiling
process. We allow our members to monetize and obtain value for the use of
their personal data profiles without compromising their privacy. Launched
in March 1999, we signed up 250,000 members in our first 10 days of operation
and currently have over 2 million active registered members. As Chief Privacy Officer for AllAdvantage, I am the member of
the management team charged with ensuring that member expectations regarding
the company's privacy protection practices are met and that the company's
overall commitment to member privacy is constantly reinforced throughout all
aspects of our business. My position and role within the organization is an
example of AllAdvantage.com's commitment to member privacy and a sign of the
importance privacy plays in our business. On behalf of AllAdvantage.com, I welcome the opportunity to
share with the Commission why our business model changes the debate over online
privacy practices, and why the rise of the Infomediary is one of the most
important indications that the marketplace is beginning to meet the challenges
posed by the current self-regulatory environment. Attached is a brief biographical
summary outlining my work in the privacy and e-commerce arena as well as written
comments addressing several of the questions raised. Thank you for your consideration. Sincerely, 1. What types of companies are engaged in online profiling
or in the development of online profiling technologies? What are the relevant
business models? There are two models for those presently engaged in online profiling.
The first and most prevalent model is that of companies operating from a marketer/advertiser-centered
perspective. They have largely modified traditional direct marketing and customer
profiling strategies, at use for years in the offline world, and applied them
to e-commerce transactions. Taking advantage of current Internet technologies
to speed data collection and processing, these firms are building extensive,
detailed profiles about consumers' preferences, interests, and purchasing
habits. This model presumes that any information collected about an individual
becomes the property of the collector. Often these profiles are sold or traded to other marketing firms
or to large aggregation services that combine these profiles with information
gathered elsewhere. These collection and aggregation processes allow a handful
of companies to create highly detailed databases about consumers, sometimes
including extremely personal, individually identifiable information. Those
profiles are largely built without consumers' explicit knowledge or consent
and are regularly traded or sold to the highest bidder. Consumers are seldom
notified that they are being tracked, given any information about these data
collection processes, or given any level of control over any aspect of the
profiles being built about them. Emerging as an alternative is a new, consumer oriented model:
the Infomediary. An Infomediary works as a personal agent on behalf of consumers
to help them take control over the "profiling" process. Infomediaries
operate on the assumption that personal information is the property of the
individual described, not the property of the one who gathers it. The Infomediary
business model recognizes the valuable nature of this personal data and the
Infomediary acts as a trusted agent, providing the opportunity and means for
clients to monetize and profit from their own profiles. The first benefit
provided by an Infomediary is the ability to control and benefit from the
use of a consumer's personal information. However, AllAdvantage.com goes further
by obtaining value for its members without compromising their privacy. AllAdvantage.com is the first Internet Infomediary to achieve
popular success in the form of a large member base and strong advertiser interest.
From the firm's launch in March 1999, AllAdvantage.com registered 250,000
members in our first 10 days of operation and currently has over 2 million
members. Through our Viewbar™ technology, we currently serve over 40
million banner-ad impressions each day while paying our members $0.50 per
hour (currently capped at 25 hours per month) for the time they spend online.
AllAdvantage.com was ranked as the 20th most visited web property for the
month of September 1999 according to PC Data, Inc. As an Infomediary, AllAdvantage.com works as a personal agent
on behalf of members to realize monetary value from the personal profiles
that our members permit us to build about them. Utilizing our Viewbar™
technology, we are able to collect data regarding individuals' online viewing
and purchasing habits. By collecting these profiles and by aggregating it
with those of other individuals, we are able to accurately target relevant
information directly to individuals and to present that information in real-time
directly to their Viewbars™. Using the information gathered from our
members, we are able to negotiate with marketers and vendors to the benefit
of our members. Our slogan, "The Rules Have Changed… Get Paid to
Surf the Web!" encapsulates the results of our business model: consumers
are placed in a position of increased power and control over the collection
and use of their personal information. Moreover, they have an agent working
on their behalf to control how their information is used and to realize a
share of the value advertisers place on that information. Privacy has also been institutionalized within the business
structure and processes of AllAdvantage.com through the appointment of the
e-commerce industry's first Chief Privacy Officer (CPO). The CPO is responsible
for promoting member privacy in all aspects of AllAdvantage.com's business
operations and planning. By establishing an executive position responsible
for overseeing the company's privacy safeguarding practices, AllAdvantage.com
is able to ensure that our commitment to member privacy is constantly reinforced
throughout all aspects of our business and that member expectations regarding
their privacy are met. 6. Are there technologies in development that will enable
the creation of consumer profiles that identify individual consumers? If so,
please describe. AllAdvantage.com delivers a new generation of highly targeted
and personalized communication services directly to its members' screens via
AllAdvantage.com's proprietary Viewbar(tm) technology. The Viewbar(tm) is
a thin, browser-enabled client software application that contains transactional
and multimedia capabilities, with direct links to the AllAdvantage.com web
site and the web sites of advertising customers. It is visible to users as
a window on their screen (60 pixels tall) while they are active on the Internet.
The Viewbar(tm) also displays individually tailored advertisements based upon
detailed individual member profiles and the user's current activity on the
Internet. It contains features personalized for each particular member that
is always present on their screen as the member surfs the Web. AllAdvantage.com's ability to constantly communicate with its
membership is augmented by the collection of data enabled by the presence
of the Viewbar(tm) on members' screens. This data flow allows us to offer
a highly-personalized experience to each user of the Viewbar(tm). With the
information being collected, AllAdvantage.com is able to connect advertisers
and consumers in direct, one-to-one, real-time communications available on
every site on the Web. While members are using the Viewbar(tm), they are compensated
with cash and other rewards. However, users may close the Viewbar(tm) at any
time with a simple click, thereby halting the profiling until they reactivate
the Viewbar™. By allowing members to deactivate the Viewbar™ at
will, members can exercise substantial control over the profiling process.
14. Do online profiling companies provide effective mechanisms
for a consumer to remove his or her information from their databases or otherwise
control the use of such information? 15. Do online profiling companies provide consumers an opportunity
to choose whether and how their information will be collected and used? If
so, please describe the choices that consumers are given and how consumers
can exercise these choices. 18. Do online profiling companies provide consumers the opportunity
to see what information has been collected from or about them and the ability
to correct errors? If so, please describe. AllAdvantage.com builds highly detailed activity-based profiles
of its members through a mutual agreement between the two parties. Unlike
traditional Web sites that extract data from visitors by unauthorized cookies
and other mechanisms, AllAdvantage.com legitimately obtains information from
its members in a relationship built around disclosure, consent, and member
control. In return, AllAdvantage.com shares with its members a substantial
portion of the value it is able to obtain for that information. In fact, the
entire AllAdvantage.com business model encompasses each of the issues raised
in Questions 13, 14, 15, and 18. Our relationship with our members is built
upon four pillars: explicit notice, concurrent consent, compensation, and
member privacy.
We are able to utilize member profiles without disclosing them to advertisers because the advertiser specifies the demographic profile they wish to reach and gives us the message they wish delivered to that audience. We then deliver it directly to the Viewbars™ of the appropriate members without ever revealing the identities of those members to the advertiser. Unless a member clicks on the ad and enters into a transaction with the advertiser, the advertiser gets no identifiable information about our member. Thus, protecting the privacy of our members is not merely a feature of our business model, or a by-product, it is at the core of all we do. Our business model is built on the quality of the information and maintaining the privacy of the information. Unless consumers trust that their information is going to be kept private, they will not share accurate information or may give misleading data. And without accurate, detailed member profiles to be used in targeting, we cannot attract the interest of advertisers. Moreover, with the investment in building an exclusive relationship with our members, we have a strong economic incentive to prevent any disclosure to our advertising clients. As with any agency relationship, our success depends upon maintaining the trust of our principal, working in their interest, and delivering quality services and maximum value. As the Infomediary industry grows, it is becoming increasingly clear that those engaged in online profiling using non-transparent techniques will be marginalized if they do not recognize or respect consumer privacy. Consumers are realizing that the profiles being surreptitiously gathered about them are tremendously valuable, and it is only a matter of time before consumers demand value in exchange for the use of these assets. In the new era of the Infomediary, advertisers and marketers who do not respect consumer privacy and who do not give consumers value for the use of their personal information will find that the rules have indeed changed and they will be forced to do business on consumers' terms or close their doors. For the vast majority of Internet users, profiling doesn't even appear on their radar. But when you describe it to them, show them what is happening every time they surf, the concept of online profiling begins to resemble everything they fear about technology and the Internet. Even our business model causes many people to pause and question why anyone would pay them to surf the web. It naturally raises awareness of privacy as an issue. We answer those questions in a clear and explicit way with a business proposition: let us do openly what others are doing surreptitiously. In return, we tell members that will keep the information to ourselves and give them value for this asset they are entrusting to us. To heighten awareness of profiling, we are developing the AllAdvantage.com Privacy Center as a one-stop reference for information relating to consumer information privacy. Built with cooperation from consumer activists in the privacy arena, the Privacy Center will educate, inform, and provide resources to teach consumers about online profiling, data mining practices, and raise awareness of issues that concern every consumer. The AllAdvantage.com Privacy Center is designed to educate members about privacy issues, keep them informed of news and events impacting personal privacy, provide a venue for interacting with experts on privacy issues and discuss privacy with other members. Meanwhile, it will also function as a resource center for everyone on the Web whether they are members of AllAdvantage.com or not. This site will also serve as a clearinghouse for information about the Infomediary industry and provide a variety of resources for those interested in learning more about privacy-related practices on the Internet and privacy issues that affect society at large, such as telemarketing and unsolicited commercial email. We anticipate launching the AllAdvantage.com Privacy Center before the end of 1999. In addition to educating consumers, AllAdvantage.com is working to educate businesses engaged in e-commerce about consumer-friendly privacy practices. Because AllAdvantage.com maintains among the highest consumer privacy standards in the United States and has built our system to comply with EU standards, we are in a position to show businesses that we have achieved success because of strong privacy practices, not in spite of them. We feel that the current self-regulatory framework has allowed us to establish ourselves as an alternative to current business models and has given us an opportunity to establish a thriving working model of an Infomediary. We hope that other companies will follow the path we are showing and understand that it is possible to build a successful business around strong, consumer-friendly privacy practices. By showing them an alternative, we believe that we can encourage the industry to willingly and enthusiastically embrace more vigorous privacy safeguarding practices than any legislative or regulatory framework could require by force of law. Last update: 04/29/03 |
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