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Do not track at your own risk October 15, 2012

Posted by David Card in Uncategorized.
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The headline of this story in Advertising Age reads: “Microsoft Takes Heat From Coke, P&G For ‘Do Not Track’ Browser.” Yet, several paragraphs into the piece:

Asked if the controversy would affect his advertising relationship with Microsoft, P&G Global Brand-Building Officer Marc Pritchard replied: “Nah.”

The Coke exec doesn’t exactly take Microsoft to the toolshed, either. I wouldn’t be surprised if Microsoft were hearing some grief from advertisers, even if they and publishers are using industry organizations like the ANA to express their discontent. A default Do Not Track setting does potentially throw off the mechanisms for ad targeting, especially from third-party networks and data providers.

Microsoft’s attempt to take the privacy high ground may ultimately alienate some advertisers, but the media seems to be blowing this story up a bit. After all, no one’s decided how the Do Not Track policies actually work yet.

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Google implements Do Not Track. Now what? September 17, 2012

Posted by David Card in Uncategorized.
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Google became the last of the big browser companies to support the Do Not Track privacy initiative by adding it into its latest developer version of Chrome. While this adds momentum and a little clarity to the movement, it leaves key questions unanswered. Will Do Not Track ease user privacy qualms, fend off restrictive government regulations, and prove a major disruption for digital advertising? Perhaps. Strict Do Not Track adherence could shift the balance of power in online advertising.

A quick refresher: Do Not Track is an HTTP header-based scheme to enable users to essentially set a beacon via their browser informing web sites that they don’t want to be served ads via third-party tracking mechanisms. Do Not Track is explicitly aimed at behavioral ad targeting based on a user’s web browsing habits. The major browser providers have now all committed to supporting Do Not Track, but their implementations vary.

But that’s not surprising. Remember, the final details of exactly how Do Not Track works aren’t finished. U.S. government regulators are dancing around the issue, hoping the industry can come to a comfortable self-regulating scheme. Neutral industry bodies like the W3C and IETF are circling efforts from advertising and publisher site groups. There’s still a debate over whether Do Not Track should cover cookies and tracking, or just advertising served based on them. Microsoft’s aggressive intent to implement Do Not Track as an opt-out option was seen by some as taking the privacy high ground but by others as going too far: both the Mozilla and Apache organizations think Microsoft has overstepped the bounds on user intent.

Advertising apocalypse?

Online advertising doomsayers like to characterize the worst-case outcome of Do Not Track as an online advertising apocalypse. Proponents point out that behavioral targeting represents less than 20 percent of today’s online ad revenues, and that brand-name publishers with desirable audiences can continue to go about their business. Long-tail sites are the most at risk, they say.

Indeed, cynics have some circumstantial evidence to help make the case that privacy hype-mongers like the Wall Street Journal might be happy with the contextually-targeted status quo. And Microsoft insists that its implementation is not a sign that it’s giving up on the advertising business.

True, search and pay-per-click direct advertising could thrive even under strict Do Not Track implementations and wide adoption. But even CPC ads – where no one pays unless a user explicitly expresses interest by clicking – would waste impressions, potentially crowding out more effective ads. And re-targeting, that is, serving up relevant ads based on previous behavior like clicks, searches, or browsing, would be devastated. Facebook’s real-time bidding “exchange” depends on re-targeting to add value (and raise Facebook’s pitiful CPMs). And the still nascent mobile ad space would benefit greatly from re-targeting.

Shifts in ad data value

Should Do Not Track derail third-party targeting, it might end up putting targeting power back in the hands of sites that collect interest information gathered on their own sites. Draft legislation seems to protect Facebook’s info on its users, gathered via profile data and Likes. Facebook’s own ad inventory would gain relative value, even if Facebook couldn’t build out the ad network we all expect it to. Likewise, Do Not Track wouldn’t seem to affect info gathered by sites with big audiences that visit lots of home-grown content – Yahoo’s fingers are crossed. Data derived from users expressing interest via explicit posting within a network like Twitter’s would also gain value.

It’s never clear whether users say they’re more concerned about privacy than their actual behavior supports. Meanwhile, it’s an election year and the ad industry hasn’t even played the jobs card. Mainstream legislators hope the industry can come up with its own solution for privacy concerns. Browsers are now moving more or less in the same direction. The next milestone to watch for is whether and how third-party ad networks fall in line.

Question of the week

How can online advertising thrive without wrecking user privacy?

Privacy Legislation’s Potential Impact on Online Media April 18, 2011

Posted by David Card in Uncategorized.
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Last week, the bipartisan Kerry-McCain bill proposed legislation on a Commercial Privacy Bill of Rights that would put the Federal Trade Commission in charge of policing the online collection, sharing and use of personal information. Because the legislation is watered down relative to prior proposals, the Kerry-McCain bill will face the least industry resistance and is more likely to be passed this year. Passage would shift some power in online media, and force changes in the way online ad networks and other targeters work with content sites.

The proposed bill is relatively business-friendly, so much so that it’s drawing criticism from privacy rights activists. The bill:

  • Focuses explicitly on the use of personal information for behavioral ad targeting — and particularly on data sharing between companies — rather than information collection in general.
  • Mandates opt-out policies for personal information use, but only requires tighter opt-in permission for sharing “sensitive” personally identifiable information related to religion, health and finances.
  • Enables what some are calling a Facebook loophole that imposes lighter restrictions on web-wide information collection and use by companies where the user has an account. This would favor Facebook Connect over ad networks.
  • Is strict about data-sharing for behavioral targeting via third parties (data collectors and ad networks), but much looser on ad targeting done by a publisher that collects the data on its own site.
  • Does not address “Do Not Track,” the concept of a universal opt-out mechanism that users broadcast to sites popularized by the FTC last December. In February, Congresswoman Jackie Speier, D-Calif., proposed that the FTC create and manage a Do Not Track framework.

Although advertising industry groups are predictably resistant to any kind of regulation, their initial reactions to Kerry-McCain seem more muted than concerns they had prior to the bill’s introduction. Big tech companies like Facebook, Microsoft, eBay, Hewlett-Packard and Intel expressed support for the bill. The trade groups are probably relieved about the absence of Do Not Track, which they fear encourages users to block all cookies and customization indiscriminately, and requires potentially costly support from ad servers, ad networks and sites. Apple is the latest browser maker to experiment with Do Not Track support, after Mozilla and Microsoft; Google favors an alternative approach that maintains user opt-outs.

Privacy Legislation Impact Scenarios

The promise of online advertising has been the potential combination of television-like reach with precision targeting. Passage of the Kerry-McCain bill or something similar will have the following effects on the online media landscape:

  • Online content sites: Don’t call me a conspiracy theorist, but some traditional publishers like the Wall Street Journal might be perfectly happy without web-wide behavioral targeting. They could tout the value of their online/offline audience and promote contextual targeting and sponsorships. As noted, publishers would able to follow and target a user within their own site, which would benefit portals like Yahoo and AOL, which have huge audiences and broad variety of content.
  • Online advertising ecosystem: The bill’s restrictive approach to behavioral targeting favors search advertising over display ad formats. It also weakens industry efforts to deliver attribution, i.e., understanding and valuing the longer-term effects of seeing brand advertising. The data sharing guidelines could force data miners (Experian, Audience Science, BlueKai) and ad networks (DoubleClick, ValueClick, 24/7 Real Media) to secure more formal contractual relationships with content sites that have registered users. And the legislation seems to leave room for third parties to take user info and create anonymized groups of targetable customer “types” based on demographics and behavior.
  • Social targeting: Today, most third-party social targeters (Lotame, 33Across, Media6Degrees, Rapleaf) base their analysis on tracking user behavior with their own cookies, rather than getting access to API data from Facebook or Twitter. Legislation may make them pay for access, and even then, Facebook to-date has been stingy about data sharing. Likely it’s saving that targeting opportunity for itself.

Question of the week

How could potential privacy legislation affect online advertising?