TRUST FACTOR
While consumers wrestle with the trade-offs between privacy and personalization, between tin-foil hat paranoia and data nudism, companies are faced with the challenge of maintaining consumer trust while amassing valuable but potentially damning data. This is not merely a matter of managing behavioral advertising data but of data governance in general.

"If you're going to do personalization, if you're going to use real data about people, and maybe private or sensitive information, you have an obligation to do basic blocking and tackling in privacy or more than that," says Larry Ponemon, chairman and founder of the Ponemon Institute, a research group that focuses on privacy and management practices. "It could be a big reputation problem if you're in the behavioral marketing industry and you don't take stock of privacy and information security concerns."

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"We're entering a place where user-driven content and individuals have tremendous economic power to participate online, to create an economy and to walk away from services that they think are violating their human rights or economic rights," says Michelle Finneran Dennedy, Sun Microsystems' chief privacy officer. "That's where this is all coming to a head."

Dennedy professes faith in technical solutions. She hopes that the growing debate over privacy and data leads to a coherent vision of what consumers and companies can agree on, and that companies like Sun can design products to meet those needs.

A Do Not Track list is one way to give consumers control over their data. But it could be overkill. Certainly, an all-or-nothing approach like the Do Not Call list would put a damper on online advertising spending, which totaled $16.4 billion in the United States last year and is expected to reach $36.5 billion by 2011, according to eMarketer. The list being proposed would be administered by the FTC and would affect only targeted ads. It would require companies that set persistent identifiers--such as cookies--to register their servers with the FTC.

There are already ways to opt out of online ads. The Network Advertising Initiative, a marketing trade group, offers a list to opt out of targeted ads from some of the major ad networks. AdBlock Plus and Customize Google, two Firefox extensions, provide users with a "do not show me ads" option. Internet Explorer's IE7Pro includes an ad blocking feature. And people really into not being tracked can set their browsers not to accept cookies or to delete them, and they can use a proxy to surf the Net. Not using cookies, however, limits functionality on many sites, and many consumers aren't aware of these options or proactive enough to use them.