When 'behavioral marketing' turns creepy

Probably all journalists face this sometimes: the ironic overlap of two totally unrelated stories.

I had that experience last week, when the impressive advances of Kinect, the new control technology for Microsoft's XBOX gaming system, came up in startlingly contrasting contexts.

In my Tech Life column last Thursday, I wrote about how Kinect's sensor system offers technology that, for about $150, can replace laser range-finders for robots that sell for $5,000 or more - a promising leap forward for robotic devices that within a decade or two may become much more commonplace.

Then I got to work on Sunday's Consumer 11.0 column, which was about the Federal Trade Commission's proposals to rein in "behavioral marketers" and data miners who use information gleaned from your visits to websites - perhaps including this one - to create online profiles of you that they can then use or sell. Once again, I ran into Kinect's large footprint.

Over the last decade, data-mining techniques once derided as the province of sketchy "spyware and adware" developers have now gone mainstream, and the FTC is fulfilling is consumer-protection role by calling attention to what's been happening outside your view.  Many people are largely unaware - blissfully ignorant? - about what data miners can now do as they track our movements from web page to web page. The FTC is proposing greater transparency and simple tools such as a "Do Not Track" button your browser, or "Just-in-Time" notification that you're about to experience something you might well consider a privacy breach.

So where does the Kinect fit in? According to at least one observer of the nexus between technology and advertising, Kinect's imaging sensors may pose possibilities far creepier than tools that simply know everything you've been reading and purchasing online, all your Facebook likes and dislikes, and a bunch of other things you might not intend to share with marketers. Here's how Chris Lange described it in Adweek last spring, back when Kinect was still in development and known by Microsoft as "Project Natal":

Via a small device that plugs in to an Xbox 360, players will be able to interact with their games by simply standing in front of their televisions and making natural body movements to control on-screen action. Two small cameras that immediately detect players' movements drive the technology. These cameras can determine, for example, if the player is kicking a ball, driving a car, or riding a skateboard. Using facial recognition technology, Project Natal can also determine who is playing the game and who is in the room watching them play.

This is where things start to get interesting for advertisers. Queue up the memories of Minority Report. Because the cameras can see who is in the room and who else is watching the screen, the data that could theoretically be captured and provided to advertisers would give them a huge advantage in the battle for consumers' dollars.

The first potential breakthrough would be in ad targeting. Imagine targeting ads to users based on Project Natal's best guess for a gamer's gender, age or race. Beyond that, the game could pick up on other physical characteristics, like if a gamer was bald, overweight, or had bad acne or yellowing teeth. I bet there are plenty of advertisers who have products they would like to show to those folks.

The targeting would not have to stop with the gamer's physical characteristics. If Microsoft could replicate the technology in the recently announced Google Goggles and integrate it with Project Natal, every item visible to the cameras could be scanned, identified and turned in to a targeting mechanism. For example, if the gamer was drinking a Mountain Dew while playing Halo, Pepsi could inform them of a new "master chief melon" flavor. If the gamer was wearing a Lacoste shirt, Ralph Lauren could serve her an ad with the location of the nearest Polo outlet. The ability to literally see into a consumer's living room opens up an amazing variety of targeting options.

The next huge advantage is in reporting and analysis. In the online world, targeting and tracking audiences is light years ahead of the offline world. However, it is oftentimes done with cookie-based methods that are ill suited for situations where multiple consumers are using a single computer (not to mention for people who delete their cookies)

Project Natal would not have this problem. It would know exactly how many people saw an ad and how many times they saw it. Beyond simple reach and frequency, Project Natal could also make reporting on display ads much more robust. Imagine knowing not just how many people saw an ad, but also how long they looked at it (eye tracking), whether the ad made them smile or frown (facial-recognition technology) and whether or not they audibly said something in response to an ad (built in microphone).

All of this is very exciting and, admittedly, a little creepy. Do consumers really want advertisers taking that detailed a look in to their living rooms? Probably not. But with the announcement of Project Natal, the idea of targeting ads this way is becoming less science fiction and more of a reality. I, for one, will be keeping a very close eye on where Microsoft decides to take this technology. Who knows? Some day it may be keeping a very close eye on me.

I tried today to reach Lange, identified by Adweek as "senior director of product management at Traffiq," a company whose website identifies it as "an end-to-end digital media planning and buying platform headquartered in New York City."  The receptionist said she was unfamiliar with the name.

I'm sure it's just another one of those coincidences.

(Cue creepy music.)