Why “Do Not Track” Probably Won’t Kill the Online Ad Industry

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ADOTAS – You may have seen the recent New York Times article about the Federal Trade Commission’s just-released report outlining its recommendations for protecting consumer privacy. Within that report is a warning issued to technology and advertising companies regarding a “Do Not Track” mechanism that allows consumers to opt out of having their online behavior monitored and shared. The report states that if companies don’t voluntarily provide a satisfactory Do Not Track option, the FTC would support additional laws that mandate it.

In response, an executive from a prominent technology company, who asked not to be identified, said in the article, “Do not collect is basically death for online advertising.” My company, NetSeer, humbly disagrees, and here’s why.

What most consumer privacy advocates raise as a major concern in online advertising is the use of cookies that “follow” users as they navigate across the web. And cookies are used. A lot.

However, consumers have voted, loud and clear, that they don’t like to be followed. They are becoming savvier about online privacy – with 40 percent regularly deleting their cookies,according to Consumer Reports. Moreover, a recent TRUSTe study indicated that only 11 percent of consumers are comfortable with online behavioral tracking, a statistic that does not bode well for the future of cookie-based, more commonly referred to as audience, targeting. In addition, certain categories of advertisers are particularly concerned about privacy, like health care, finance and education. Retargeting, in particular, is a big “no-no” for many RX drugs.

Pending privacy legislation could also eliminate, or at least reduce, the use of cookies. It’s already happened in Europe, and CAN-SPAM and the Do Not Call List passed in the U.S. We don’t know how stringent any legislation will be, but we need to be prepared by developing alternate, yet equally powerful ways to reach consumers.

Finally, most of the browser providers have implemented “do not follow” as an installation feature, which will further erode cookie-based targeting.

But this does not signal the death knell to online advertising. It just indicates that more consumer-friendly advertising methodologies should be employed. When ads that are highly relevant to a user are served, the outcry from consumers is less intense. Serve a relevant ad that maps to the content a user is currently consuming and you get a happy user. Serve an ad about Disneyland when the user is consuming content about how to pay for a home health care aide for her mother-in-law, and you run the risk of irritating her based on the complete irrelevance of the ad.

There are technologies, however, that allow advertisers to target relevant audiences without the use of cookies. Fortunately, more and more advertisers are realizing that this can be as effective in finding relevant audiences as cookie-based targeting efforts.

NetSeer, one of many companies that offers a technology that enables contextual targeting for advertisers, saw the growing concern over online data collection and prepared for the inevitable. The company perfected a cookie-free targeting solution that offers the ability to analyze and understand web content and content at scale, to target ads based on user intent at the time the ad is being served. This leading-edge, concept-based approach to contextual targeting combines the most effective aspects of other types of ad targeting – relevancy, reach, cost efficiency, brand safety and transparency – all without the use of cookies. While NetSeer isn’t the only company doing this, we believe our technology and method of buying media supersedes many others in the industry.

It’s clear that this area of advertising targeting needs to evolve rapidly. The potential privacy legislation certainly doesn’t equate with death to the online advertising industry. But it should serve as a wake-up call for all of us to recognize that this is an issue of growing concern and to address it with appropriate solutions.

4 COMMENTS

  1. Your opinion that “Do Not Track” won’t kill online advertising is self-serving. It will obviously be a boon to contextual advertisers, which will benefit your company, but that is about it.

    The scariest part of the FTC’s comments was the issue the original article termed “Do Not Collect”. That concept, if it was to become law, would change all of advertising as we know it for both online advertising and direct marketing in general.

    The concept requires that online businesses not collect any information other than what is needed to fulfill the order or request made by the consumer and then to dispose of any information that was collected once the information is no longer needed to fulfill the order or request. You may have noticed that the consumer liked a pair of ladies’ shoes which were put in your shopping cart but not purchased. You would like to remind this consumer of this the next time they are at your storefront, but you can’t. You have to get rid of the information once the consumer leaves the site or you will be violating this silly concept.

    Maybe you want to snail-mail the consumer your catalog by sending it to the name and address the consumer had you mail his order. You are out of luck. Unless the consumer also consented to being on your mailing list, you can’t mail him a catalog. You also can’t rent that consumer’s name and address to your competitors to allow them to mail their own catalogs, unless the consumer explicitly agreed to both allow you to mail him and explicitly agreed to allow you to rent his name and address to other businesses.

    This proposed rule would knock online marketing back to 1990 and offline marketing, if the principle gets further applied to all information collected by businesses, to the 1800s. Montgomery Wards and Sears, Roebuck & Company of the late 1800s would be at a competitive advantage!

    The proposed privacy legislation may be the most anti-business of all of the Obama administration’s actions thus far, and could absolutely cripple the economy and end business as we know it not for just online businesses, but for ALL businesses in our country.

    The only saving grace is that at some point our country’s Fortune 500 including major retailers and catalog companies, as well as all other types of businesses will hopefully become aware of this insanity and make their voices heard. This unconstitutional and dangerous idea needs to be recognized as the ridiculous hogwash that it is before it is too late.

  2. Right now today I click on the Ad Icon Marker and download Opt-out cookies from various online marketers. I install a cookie from a company that I don’t want to track me; I can’t see what information is actually stored in the Cookie or what information this Cookie me too.

    Then from time-to-time when I delete my Cookies and temp browser files I am re-opted into tracking.

    1) I am unable to prevent myself from being tracked.
    2) There is no transparency into what information 3rd party companies have collected on me.

    This is currently a completely unworkable system – it is a joke, there is no real opt-out, there is no real transparency.

    Do-not-track-Headers where I can choose to opt-out before submitting data is a much better system for me the user. I can easily delete Cookies w/o opting back into data collection.

    A preference Manager from every tracking company where I can easily review all the data collected on me (and choose to opt out) is the second essential piece to provide privacy, choice, and transparency.

    How many people opt-out today? 0.06% or less why would this change with DNT headers? It wouldn’t but those who did not want to be tracked could opt-out w/o playing the Cookie game.

  3. cookies are just a mean.
    cookieless targeting won’t change a thing.
    only will you gain 2 some time.. if the first law passes.
    This article is just a propaganda for NetSeer

    Please, see the big picture here.
    suggestion is better control the current practice (the use of cookies) rather prohibiting it and track the user in some other way (IP; flash cookie; http header or other..).
    Self-regulation has proven to be working in other industries, for a couple of decades (centuries even) Self-regulation is now widespreading through inter-professionnal organism like IAB and is working fine.

    Also, I think authorities are fighting against the wrong opponents and forgeting too much about google and facebook that are collecting huge amount of personnal datas, with very few people concerned about this.
    Wich is for me far more frightening than collecting behavioral shopping preference.

    Regards,
    A.

    PS: could you post the Consumer Reports article link please

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