Alan Chapell has had as varied a career as any one in the digital publishing and marketing business. In 1997, he founded the privacy program at Jupiter Research, after which he developed several products in DoubleClick’s research product suite which revolutionized the measurement of online advertising. He founded Chapell & Associates in October of 2003. Since then, he has worked with several top-tier organizations; helping them to comply with existing privacy legislation, auditing their privacy practices, and managing their technology product development programs. Recently, Madison Avenue Journal editor Tim McHale interviewed Chapell at length about several issues. We’ve excerpted it here: 

McHale: When I think of behavioral targeting, I still think of Tacoda and Revenue (now Audience) Science. How has the BT landscape changed over the past five years?

Chappell: Perhaps the starkest change in BT is the number of entities - at a number of different entry points within the ecosystem - that have entered the BT space. With Adobe, Quantcast, ad agencies and even offline data companies looking to participate, the funnel has flipped. We're now at the point where one might ask - who ISN'T looking to participate in the data economy.

McHale: Who owns the data in theory and in reality?

Chappell: I believe that many in the advertising chain have an argument to be made that they own - or at least have some rights to - the data. The publishers believe that they own the audience and, by extension, the data that pertains to their audience. I think publishers are terrified by the prospect of de-coupling audience from advertising - and rightly so.

McHale: I bet.

Chappell: Advertisers, ad networks, behavioral vendors, agencies, and even ISPs all have their arguments to make about data ownership. I've worked with a number of different constituencies, and I remain fairly agnostic. The larger issue for me is ensuring transparency. I think consumers have a legitimate argument that they own their data. Unfortunately, if you think about the history of the old school direct marketing world, that really hasn't been the case. Consumer data has been routinely collected and transferred around the globe with or without consumer consent. Some consumers have routinely taken steps to control that data - as witnessed by those who pay extra to be de-listed from the phone book. But for every person that delists themselves from the phone book, there seems to be ten more that put everything out there on Facebook for the whole world to see. And I think that speaks to the myriad of attitudes that consumers express when it comes to privacy.

McHale: It's an issue that cuts across the entire net.

Chappell: I believe that consumers have rights to own their information, but I don't think ANYBODY has quite figured out what that means yet. Consumer privacy rights should be thought about on a sliding scale. So that my rights to my credit card, social security or driver's license numbers is broader than my right to my telephone number, email and postal address. And I don't believe that it's practical to expect that my rights to information that doesn't identify me personally should be the same as my rights to exercise control over my credit card information.  What makes this challenging is that technology continues to blur the line between what is personally identifiable, what is quasi-personally identifiable, and what is non-personally identifiable.

McHale: Right.

Chappell: Part of what I think gets lost in the privacy debate - at least as it pertains to interactive media - is the notion that data is subsidizing free content. And I think that the industry in generally hasn't done a great job in making this tradeoff clear to consumers.

McHale: No, we haven't.

Chappell: To be clear - I don't believe that anyone thinks its fair for consumers to get free content without ads. There are real costs around creating content, and unless consumers are willing to pay for it, then I think they need to accept some ads. And nobody - not content creators, advertisers, and certainly not consumers - want too many ads. The issue is defining "how many" ads are too many. Data can be the answer here. If data can be used to help keep the number of ads to a minimum, that's certainly a positive thing. And in that respect, data can act as a subsidy for both free content and fewer ads.

McHale: I agree but I'm not sure everyone else would.

Chappell: That's an issue. I believe that we sometimes under estimate consumer understanding of these issues. It would be interesting for someone to conduct research on consumer attitudes toward the tradeoff of paying for content vs. targeting. To what extent consumers understand that some of their clicks are used by those other than the website they are currently surfing. Perhaps something that asks how many people are willing to pay for their content if the targeting subsidy is taken away.

McHale: For sure. I keep reading about the FTC - both at the Commissioner level and the staff level - really pushing the industry to change its policies and to "get serious about self-regulation." with an implied (if not overt) message of "Or else." What does the industry need to do in order to avoid the "or else", when does it need to happen, and what will happen if (in the FTC's view) the industry hasn't done enough?

Chappell: Commissioner Leibowitz and what seems like the entire Commission has made it abundantly clear that we as an industry are down to our last strike when it comes to self-regulation. For example, Mr. Vladek (the FTC's new head of Consumer Protection) has signaled a huge shift in the commission's perspective. The most significant is the notion that government should be addressing certain harms of personal dignity - and that the collection of non-personally identifiable data may, under certain circumstances, may rise to that level of harm.

McHale: You've mentioned that privacy has often been used as a "red herring." Can you explain what you mean by that?

Chappell: Over the course of the past few years, privacy has been used as way to rally support against disruptive business models. If someone comes up with a business model that puts yours at risk, it's much easier to jump up and down about privacy - as that gets the blood flowing, as they say - than it is to openly state that such a business model might put you model in serious jeopardy. I'm not here to praise nor bury ISP BT, for example.