Hitmetrix - User behavior analytics & recording

Will “Do Not Track” destroy online ads? Readers respond

Will “Do Not Track” destroy online ads? Readers respond to the August Gloves Off question.

John Montgomery, North America COO for GroupM Interaction, views the potential enactment of DNT as a major detriment to the online advertising industry, even if it won’t entirely end it.

The online industry is far too robust to be destroyed by DNT legislation, but should it be enacted it would be bad for the industry on a number of levels. It would be bad for consumers, because their largely unfettered access to free content is likely to be limited and they are likely to get more advertising, as well as less relevant advertising…DNT will make online ads less effective—and will reduce the level of investment in ad tech. It would also be a detriment for publishers, as this will commoditize inventory and drive prices down for premium display.

Michael Radigan, SVP of digital and technology at Javelin, believes the online advertising industry is far too hardy and adaptable for DNT to have a significant, negative effect.

No. Our industry has proven to be extremely resilient in adapting to change over the years and the DNT legislation will prove to be no different. I envision two potential scenarios occurring should the legislation pass. One, brands and agencies will implement a stronger value proposition in exchange for tracking permission. Two, significant M&A activity will move away from ad exchanges and into existing user bases.

I view the first scenario as a continued evolution of the CRM competency; brands would actually become more efficient and effective as they’re forced to define a value proposition and implement personal preferences for the customer. With the transition time of DNT legislation, I think the potential negative impact on the industry will be minimal.

I do, however, think the second scenario would be more disruptive from an M&A perspective. But with companies like Google and Facebook having other value propositions (e.g., except tracking to receive Gmail for free or Facebook “enhanced” access), there’s the potential to position those companies as an “umbrella ad exchange,” whereby other exchanges are forced to piggyback (and thus share revenue) in order to continue existing. While that second scenario would shake up the industry from an overall landscape perspective, I view it as a minimal disruption for brands looking to advertise in a digital world.

Steve Minichini, president of interactive marketing at TargetCast tcm, thinks tracking regulations will be developed from within the industry; but even should DNT pass, online advertising will still remain relevant to consumers.

The interactive industry has been working hard to establish self-regulating policies that will help protect consumer privacy, with the Digital Advertising Alliance and their About Ads effort leading the charge. I have every confidence that our industry will be allowed to self-regulate as long as our programs evolve with technology advances pertaining to how we market to consumers. Should a DNT legislation ever pass, interactive marketing would continue to be very powerful. The power of search engine marketing—reaching consumers in a true need state—is one of the most effective dollars a marketer can spend. Reaching consumers as they hunt for a specific brand or service is quite pure and very powerful. Content targeting also connects the consumer need with a perfect messaging opportunity. In its simplest form, interactive marketing connects a consumer need with relevant information. Even without tracking technology, that pure form of message relevance will exist and remain very effective.

Chris Paul, SVP of media, Digitas, doesn’t see DNT as the online ad industry’s downfall, Far from.

No, it won’t. In fact, online publishers have actually been focused on building out mechanisms that allow people to opt out of targeting since July 2009—when the Digital Advertising Alliance issued new guidelines and principles for behavioral advertising. The ongoing adoption of these DAA-supported methods will ultimately succeed in allowing behavioral advertising to coexist with comprehensive privacy control at the consumer level.

In fact, while “Do Not Track” has received substantial press coverage, it actually poses more of an issue for individual online publishers. In order for “Do Not Track” to fulfill its promise of consumer privacy, the websites themselves would need to be able to process the “Do Not Track” instruction from the browser.  As such, this would require additional site development by the publishers for each individual browser (Internet Explorer, Safari, Firefox, Chrome, etc).

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