The ad industry responds to Microsoft's Do Not Track plans

It's not a surprise that Microsoft's plan to effectively make enabling Do Not Track (DNT) an opt-out decision instead of an opt-in decision when setting up Internet Explorer 10 is not going over well with players in the digital advertising industry.

Online ads are a multi-billion dollar industry and while most would agree that changes resulting from consumer privacy concerns are inevitable, Microsoft's approach to Do Not Track goes further than it should.

Now, the Digital Advertising Alliance (DAA), a group that counts the largest media and marketing associations in the United States as members, is speaking out. In an Adweek op-ed, DAA managing director Lou Mastria calls DNT "a poor policy for the long-term health of the ad-supported Internet" and argues that Microsoft's plans do exactly the opposite of what Microsoft intends. In responding to an op-ed in Adweek by Microsoft VP Rik van der Kooi, Mastria writes:

Microsoft claims that its DNT decision is designed to further educate consumers about the value exchange that comes with online advertising. We shouldn’t debate turning DNT on or off, van der Kooi says, but instead “redouble our efforts as an industry and educate consumers about how advertising pays for the free Web experience we all now enjoy[.]” But how can that be? Advertisers want smart ads, and the Internet helps deliver that; a default DNT would seem to shut that possibility down at the start. Furthermore, the education effort should be aimed at calming fears about privacy while delivering value to brands and consumers, not fanning the flames of the debate.

He goes on:

DNT, the way Microsoft is pursuing it, also fails to advance van der Kooi’s stated goal of bringing brands and consumers closer together. Rather, this is a piece of technology acting as a wedge between brands and consumers, and no one benefits when resulting ads are wasted and off the mark. We believe, as we hope Microsoft and other tech companies believe, that technology should empower brand and consumer engagement in an increasingly customer-centric world, not disrupt it.

The solution? According to Mastria, self-regulation is working, and it's the only way to advance the relationship between advertisers and consumers. That's not a surprising position given that Mastria's DAA is behind a Self-Regulatory Program for Online Behavioral Advertising, but it's obviously one that many would take issue with.

It all boils down to the economics of ad-supported businesses

But the issue here isn't whether self-regulation is viable or not. The real issue is whether ad-supported businesses can survive and thrive if advertisers are forced to operate in an ecosystem that they believe is offering less and less.

In other words, if, as a result of DNT and other initiatives and regulations yet to be implemented, advertisers feel that they're less able able to deliver ads to consumers online in a targeted fashion, it stands to reason that online ads lose some of their luster and thus become less valuable. That, in turn, may make it more difficult for publishers to monetize their eyeballs.

Obviously, advertisers won't abandon digital; but if they pay less for ads that are less-capable, the grand bargain between publishers and consumers -- your attention for content and functionality -- may become more difficult for many publishers to maintain.


Topics: Strategy & Operations
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Reader comments (8)

  1. Matt Lovell Matt Lovell

    Head of Analytics at Thomas Cook, Airlines Group

    9:48AM on 25th September 2012

    Surely the biggest problem here is that opt in or opt out, the vast majority of consumers have absolutely no understanding of how cookies work and what they should or shouldn't set in terms of their browser settings.

    Ultimately, in the same way as the vast majority of the 38 million car drivers in the UK have absolutely no idea of the ins and outs of how their engine works, the vast majority of the 52 million internet users in the UK have no idea whatsoever as to how their browser works.

    On this, there is also the problem that most of them really don't care - in the same way as car engine parts have changed radically in the past 30 years (and yet very few people enter a showroom requesting a specific cylinder or piston) so too, has the web developed and yet unless it is hindering a users ability to search / view content and complete tasks online... the majority really don't care.

    As a reuslt, the situation is a lot more complicated than either Microsoft or the DAA are willing to give it credit for!

  2. Malcolm Duckett Malcolm Duckett

    CEO at Magiq

    10:22AM on 25th September 2012

    @Matt, you are absolutely correct - and I like the car engine analogy.

    So, given that the average user knows as much about the inside of their engine as the inside of their browser, surely the digital industry needs to act in the same responsible way as the car makers have...

    In the auto-world, collapsible steering columns and air-bags are delivered as standard - and in the digital space it makes sense for the brands and sites we use to similarly (automatically) take care of the user, their preferences and their privacy.

    So Do-Not-Track support was something we decided to implement back in 2011, alongside existing opt-in/out/anonymous functions, as we think these are the kind of features responsible brands need to use to protect their public image and act responsibly.

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  4. Avatar-blank-50x50 Richard Beaumont

    11:03AM on 25th September 2012

    It seems to me that Microsoft's decision, assuming that DNT requests will be honoured, will force the ad-industry into educating people about their benefits - in an attempt to encourage users to choose to allow tracking.

    With the current model - there is no incentive for them to do so. The DAA's argument is therefore fundamentally flawed.

    What they are worried about really is that they won't be able to make that case to people, the reason being that consumers feel they have been taken advantage of and are lacking trust.

    Malcolm is right - this is about brands being seen to be reponsible. They may in fact be the ones who could effect the greatest change - by wielding their budgets in a way that ensures the largely anonymous ad and data tracking companies act in a way that the brands would want to be seen to support.

  5. Matt Lovell Matt Lovell

    Head of Analytics at Thomas Cook, Airlines Group

    11:45AM on 25th September 2012

    @ Malcolm - I'm going to have to agree and disagree with you here.

    In the same way as the car industry has introduced safety aspects to cars as standard, I completely agree that there is a need for those involved in the digital space to same an active effort to protect customers. I also feel that in a lot of scenarios this has happened - Email providers actively remove junk email while both Search Engines and Email solutions run virus checks on pages and downloads before allowing you to extract potentially harmful content.

    The complication for me however comes down to the DNT support. Ultimately, this technology isn't designed to improve the user's experience but simply prohibit one part of the web (and something that is actually in a lot of ways beneficial to them). Given that even with the best efforts of the industry, people are inherently lazy, I'm not sure a blanket introduction of DNT will solve anything.

    @ Richard - Your assumption is that education will result in users deactivating DNT. I would argue that is incredibly naive as reports from microsoft, mozilla and safari have shown in the past that the process of editing your settings is too complicated and time consuming for most users to actually change anything.

    As such, the enforcement of DNT by a browser isn't actually achieving what it claims to set out to do. I guess the one encouraging thing is that IE's domination of web broswers has now diminished to such an extent, even if IE10 does introduce this, it will have limited effect!

  6. Avatar-blank-50x50 Richard Beaumont

    12:43PM on 25th September 2012

    Good to see a nice debate developing.

    @Matt - I am fully aware that most people do not play around with their browser settings. That is why the ad industry feels so threatened by Microsoft's move.

    My point is that the current status quo provides no incentive to educate people to change - because no change benefits the industry. Ergo education in the issue is usually poor, and results in little behavioural change.

    DNT=1 as the first installation express setting changes this dynamic radically. By adopting a 'Privacy First' approach Microsoft is creating a scenario where suddenly there is a significant incentive in the industry to persuade users of the benefits of switching DNT off. I would not be surprised to see considerable education and incentive programs designed to do this. Which is absolutely fine - as it makes the choice for the consumer much clearer - and this has to be a good thing.

    On your assertion that DNT is not achieving what it sets out to do - that is nothing to do with Microsoft's decision - but it is about the decision of the industry whether or not to honour the DNT request.

    The industry has been working towards this for some time - and the DAA said prior to the Microsoft announcement that they would do so, albeit within a very narrow definition of what that request means.

    They made that promise in an environment where they felt it would cost them little. Now Microsoft - which is also a big player in online advertising of course - has changed the game - and suddenly honouring DNT is going to have a potentially bigger impact on the industry.

    The DAA is desparate to find a way to blame Microsoft for changing the game, perhaps because they now need a way to go back on the previous agreement which is looking more costly than it did a few months ago.

    However they can't just do that openly because it would look churlish and expose them to much greater criticism.

  7. Avatar-blank-50x50 Janne Korpi

    6:02AM on 26th September 2012

    Both Matt and Richard make great points, and there are ones I agree and disagree with on both sides. Any data that can be tied to a real person in any way should not be collected without that person's explicit consent. However, it is hard to see how anonymous, aggregate data violates this principle - and if we go down that road, we should be looking at CCTV cameras before anonymous user tracking...

    My main practical concern is that if DNT becomes popular, significance of data will diminish - namely, it will not be as representative of the whole user population of an ad network, or a website, as it is today. The problem I see is similar to doing online surveys - we only know the anonymous behavior and opinions of those who decide to opt in. The practical problems this can create are several: it forces the online businesses to develop their service only for those whose behavior they can track, therefore possibly forcing them to ignore a large amount of their customers, it diminishes the accuracy of ROI calculations, and it makes it more difficult for both websites and advertisers to plan for how to best use their money to attract just the right people (and bother everybody else as little as possible).

    I believe that in an ideal world, every digital message should be personally relevant and interesting for those that view it. If DNT becomes wide-spread, I fear it will make this so much harder to achieve.

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