Microsoft Do Not Track Update
by John Montgomery, Mindshare
In June, Microsoft stunned the industry by announcing that its new Internet Explorer 10 will have a Do Not Track (DNT) signal automatically enabled. In other words, consumers will unknowingly be “opted-out” of some online behavioral advertising (OBA), which is a growing part of the online advertising business. Microsoft’s decision is in direct contradiction to the current industry initiative (Your Online Choices). That program provides consumers the option (not a default setting) to “opt-out” of OBA. IE 10 has now shipped as part of the Windows 8 launch on October 26th. Details
OBA is advertising that tracks a user’s online behavior, builds an anonymous profile of that individual via a “cookie” (or file) on their computer, and then uses that data to enable brands to target them with relevant advertising. For a consumer it means the advertising they receive will be more relevant to their needs. For publishers it makes advertising more compelling for marketers given the higher ROI associated with improved targeting; it also means greater subsidization of free content, particularly for publishers on third party ad networks, benefiting everyone involved.
Privacy concerns have increased dramatically over the last few years as consumers leave more personal data on the Internet, either directly or via their behavior. Despite the fact that this data, when legitimately collected, can’t be used to personally identify someone unless a consumer has consented, people still have concerns and therefore have been given a rightful option to “opt-out” of their online behavior being used. Various opt-out methods have been explored, and the various browser brands are now competing to offer consumers superior DNT functionality. Microsoft’s decision to include DNT with a new “opt-out” default setting as part of their easy “Express Install” is potentially one way they are trying to recapture browser market share from Google and others.
It’s important to note that DNT is not likely to affect large publishers who have direct relationships with consumers (e.g., Facebook, Google, Apple, Microsoft, Amazon) as consumers are obliged to sign agreements with these publishers when signing up for services. Implications
The IAB predicts that by 2013, over 50% of Web users will be using Do Not Track. This will significantly reduce the ability of the industry to engage in new improved online advertising methods such as audience buying or retargeting. Furthermore, all businesses that collect third party data like Ad Networks, Ad Agencies, Audience Trading Desks and Third Party data suppliers, as well as publishers who depend on this advertising revenue will be impacted. As a result, we may have to depend more heavily on contextual targeting, which has historically proven less effective. In addition, advertisers will also have fewer advanced targeting options beyond the big media platforms, thus potentially increasing costs and stifling innovation. For consumers who have unknowingly been opted-out via the new DNT system, it will simply mean a less relevant online experience. In short, consumers may now get bombarded with irrelevant ads for products in which they have no interest. Furthermore, it may mean less free content, as online advertising budgets are shifted to the big media platforms (e.g., Google, Facebook) thus undermining those publications primarily supported by ad networks. Summary
The industry needs to proactively coalesce around and evolve the agreed Your Online Choices self-regulation that rightfully gives consumer full transparency about what data is being collected and a choice to opt-out of OBA if desired. Defaulting to an automatic “opt-out” doesn’t help the industry or consumers continue to grow a free, effective, ethical, and innovative Internet experience.