Opting out of data collection could drive down value of online ads, panel said

Tom Lenard, president of the Technology Policy Institute, said:

"I think one of the issues with this privacy debate is obviously people are concerned about people’s personal information getting into the wrong hands or getting available. But I also think that part of issue, particularly among privacy advocates, though they don’t quite say this explicitly, is that they don’t consider advertising to be particularly useful. They think that it has, at best, limited value and at worst, is manipulative, but I think most economists who study it would say that advertising’s a very useful source of information for consumers. This type of advertising that we’re talking about, which gets things to consumers that has a higher probability, has a higher frequency of getting messages to consumers that they’re actually interested in, is particularly useful. That has spillover aspects in general, because that helps all advertisers get their messages read and reduces costs to consumers, reduces monetary costs to consumers because the cost of producers conveying the information goes down, so the cost of consumers getting useful information also goes down."

Mark Adams, a senior visiting fellow at PFF, said:

"Whether we have opt-in, whether we have opt-out, we have got to pay for the content somehow. Even if we make it possible that you can just click, you can very easily just click no tracking, you’re then getting the service that other people are essentially paying for by agreeing to be tracked for a lower price. Does that mean that you then have to block the content? Do you say OK you don’t want to be tracked? Here’s your opt-out.

The debate is far from over as lawmakers including Rep. Rick Boucher (D-Va.) are putting together draft leglislation as we speak. Allowing consumers to opt-out of data collection is a key component of that legislation, we have previously reported.