Behavioral Targeting: RJ vs JP

Just when you thought it was safe to go back in the water...bam! In this case, the water is tracking consumer website visits for targeted marketing. It's a tactic being advocated by my friend R.J. Lewis, President and CEO e-Healthcare Solutions, Inc., in his "Eye on E-Marketing" column in the May, 2006 issue of Product Management Today. Unfortunately, the last time it was employed by pharmaceutical marketers, it blew up in their faces. I'll get to that in a moment.

First, however, what is "behavioral targeting" and why is RJ promoting it? Here's what he says:

"In the wake of the attention that Google and other contextual advertising solutions are mustering, a new type of on-line advertising is building steam as well: behavioral targeting. Behavioral targeting is not based on the content of the Web page, but on the on-line behaviors of an individual surfing the Web. It focuses on the user's recent past behavior and delivers advertising that may appear to be superficially out of context, such as an advertisement for a brokerage service appearing on a page about diabetes. It is, however, targeted toward the recent behaviors of the individual who was recently at the website of the brokerage service, or perhaps visiting other financial services sites."

Let's forget that RJ characterizes this as a "new type of on-line advertising," since I will give you a little history lesson below disputing that claim. Also, it is important to keep in mind that we are talking about selling drugs, not "brokerage services." The distinction is important.

Say, for example, that Viagra marketers wished to use behavioral targeting to deliver pop-up ads to men likely to be suffering from hypertension or high cholesterol, two medical conditions that are risk factors for what I call "LDS," which is better known as ED (erectile dysfunction).

The idea is to put cookies -- little pieces of computer code -- "on an individual's Web browser, then matching those behavioral cookies to an index of targeted advertisers when the user later visits another page or website." [Actually the cookie resides on the individual's computer -- it's what's called a "persistent cookie" because it doesn't get erased when the individual leaves the website that originally placed the cookie. The whole idea is for the cookie to collect the list of websites you visit and then use that information to target pop-up or other types of Internet ads to you wherever you surf.]

Back to the Viagra example. With behavioral targeting, the Viagra cookie would awaken the ad server -- presumably RJ's very own eHeathcare Solutions' server -- to deliver you Viagra ads after you have visited sites to learn about hypertension. It may even be smart enough to know you are a male because it waits to see if you visited ESPN or a porno side (porno + hypertension = IDEAL candidate for Viagra!). More likely than not, the algorithm would not be that sophisticated -- it may just as likely send Viagra ads to women as well as men! [This may not be a total negative. ED drug marketers actively target women to help them sell product to their sexual partners. Also, ED drugs manufacturers may have women sexual dysfunction in their sites as a new indication to extend the patent of their products.]

Anyway, that's one problem with behavioral targeting -- it can never be precise enough for some products like ED drugs. It's OK if the product is neutral with regard to gender and indication (eg, treatment of allergies). The "target" would then not be offended by the ad.

But the bigger problem -- and the reason why pharmaceutical companies should be very afraid of this technique -- is the privacy issue. RJ recognizes this:

"Ethical issues exist for technologies such as behavioral targeting. No one wants to be 'followed' around the Web with a human immunodeficiency virus (HIV) ad, simply because they have previously visited a website with HIV-related content. However, health food or gym equipment can be promoted to those who have viewed fitness content or such benign disease categories as allergies or gastroesophageal reflux disease. Behavioral targeting creates a problem with regard to acceptable practices and defining what health care categories may be appropriate for employing behavioral-targeting technologies."

It's not so much that people don't want to be "followed," they want to know WHEN they are being followed and by WHOM and WHY. Note that WHEN, WHO, WHAT, and WHY are also the questions the press asks when interviewing pharma CEOs (actually communications officers) before they write their damaging news stories. The currently accepted standard in good privacy practices also requires that consumers be notified about how they can opt-out from programs that use there data for marketing purposes. While behavioral tracking may not use "personally-identifiable data," this may be too fine a distinction for patient advocates and the press.

Pharma already got a load of bad press related to consumer tracking on the Net back in 2000 or thereabouts, when an Internet marketing company called PharmaTrak enticed pharmaceutical companies to allow them to place tracking cookies on consumers' computers without them being aware of it -- or allowing them to opt-out. The company tracked which product sites these consumers visited and reported the information back to their pharma clients. [Do a Google search on "PharmaTrak" and you can read all about it.]

Although the pharmaceutical companies did not gather any personally-identifiable information about consumers, they were raked over the coals in the press and even sued in court. The incident was the chief motivating force that finally induced companies to create the Chief Privacy Officer (CPO) function.

The first pharmaceutical CPO ever named -- as far as I am aware -- is Jean Paul Hepp, currently CPO at Pfizer, and known as "JP" to his friends. I am pretty sure he would have a stroke if ever the Viagra marketers attempted to use behavioral targeting serriptitiously (or maybe any other way as well).

RJ does not give JP a fair shake in his column. RJ says:

"He [JP] discussed [at an industry trade conference] the slow pace of change and technological adoption at a large global pharmaceutical company. However, the successful pharmaceutical companies of tomorrow will empower and intent their product managers to embrace change."

RJ implies (1) that JP and Pfizer are "glacial" when it comes to technology, and (2) Pfizer -- that "large global pharmaceutical company" -- is just not hip and won't be among the ranks of "successful pharmaceutical companies" because it is not getting on the behavioral targeting bandwagon.

What RJ failed to mention is that JP's career was put on the line by the PharmaTrak scandal (his company, Pharmacia -- since purchased by Pfizer -- was a PharmaTrak client). But JP survived and became, as I said, the first pharma CPO. He's in the catbird seat now and when JP talks, we should listen. What JP said at that conference (I was there and heard it firsthand):

"I've been in marketing for 20 years, so I know the techniques used by marketing and sales. I love them, but you [marketing] guys are really collecting too much data. You're making my life difficult. I would urge you to do it smartly. Data is becoming such a high risk within our companies. Whenever you collect data, think twice. You should collect less data and data of higher quality." [Of course, JP prefaced his remarks with a disclaimer that he was speaking on his own and not for Pfizer.]

JP also went on to say that data must also be classified according to risk. As RJ said, HIV-related data is more risky to pharma companies than health food related data.

RJ goes on to say: "Through experimentation and trial and error, they [ie, "successful pharmaceutical companies of tomorrow"] will seek competitive advantage and higher return on investment by leveraging new technologies to their fullest extent." RJ sells marketing technology services to pharmaceutical clients, so he is not a disinterested party.

RJ believes that behavioral targeting is "fully operational" (Darth Vader music please) and "ignoring [it and other] new technologies may help competitors by allowing them to gain a competitive edge through behaviorally targeting their marketing messages and trial offers to others' customers."

I find that some service providers -- aka vendors -- push their services upon the pharmaceutical industry without regard to the lessons that history teaches us. Oldsters like myself and JP (sorry JP!) need to remind these guys about that history. JP has been around long enough, however, to know all about this.

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