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.
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.
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.
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.