Internet advertising has come a long way
since the early days of the simple banner.
Today, ads can be targeted with pinpoint
accuracy using display, search ads, social
ads and more. Advertisers can choose to
show their message only to those in certain
geographic areas, age ranges or even based
on past behavior. If you have searched for a
particular product online, chances are good
that related products have appeared in
advertisements as you continue to browse
the Web. This is targeted advertising.
But increasingly, this style of advertising is again coming under fire,
and from all angles. So-called “Do Not Track” legislation is being
discussed and introduced by the Federal Trade Commission (FTC),
Department of Commerce and the Federal Congress. Leading tech
companies are adding to the fray, too. In early March, Internet Explorer
9 (IE9) was released with one very significant feature — a
do-not-track tool. Mozilla has announced they will soon implement
the same function in an upcoming update of their Firefox browser.
Although do-not-track legislation was introduced just a few months
ago, compliance from Microsoft and Mozilla shows a clear signal of
the pressure being placed on these companies.
Simply put, do-not-track legislation aims to stop the collection of
information for the purpose of serving targeted ads. Web professionals
are concerned, and with good reason.
“Studies have shown that targeted advertisements are 60 percent
more effective than non-targeted advertisements,” says Carl Szabo,
policy counsel, NetChoice (http://netchoice.org). “Targeted advertisements
will generate per website a value of $4.12 per 1,000
views as opposed to non-targeted advertisements
which only generate a value of $1.98
per 1,000 views.
“Some proposals for do-not-track ... involve
a complete prohibition on the collection of
any information. So that would mean it would
be very difficult, if not impossible for these
websites to use targeted advertisements. Websites
would lose half of their revenue and
would need to replace that revenue from
somewhere else — whether it’s more advertisements
on the website or actually beginning
to charge users for the free services that they
So why would the government want to stifle
revenues and block advertising innovation.
It comes down to security, mostly. Acting on
behalf of consumers, legislators want to champion
the privacy cause. But it’s questionable
as to whether consumers are calling for this
legislation or if legislators are the ones making
all the noise.
“As consumers realize the cost of not having their information
tracked, they might be less likely to be so abrasive to such collection,”
says Szabo. “And that’s a study that really needs to be done. Two of
the Federal Trade Commission’s own commissioners have requested
that there be more study on this before we do anything too drastic.”
WHAT’S THE SOLUTION?
It seems that do-not-track is going to be a hot-button issue for the
foreseeable future. Solutions are needed.
To start, businesses can educate consumers about information
collection, including the fact that this information is often innocuous
— such as approximate geographic location or past browsing
behavior, which can provide an excellent level of targeting. Every
website can provide clearly labeled privacy policies and terms of
use that can explain exactly what information is being collected
from each user to help put them at ease and avoid the website being
But the biggest problem is that proposed solutions are incredibly
varied; and those at the forefront of the issues are having problems
finding common ground.
In the case of the IE9 tool, it is up to the websites receiving notification
that the user does not wish to be tracked to enact the
measure. In other words, you can tell the website not to track you
but there are currently no guarantees. There are also tools put forth
by the Interactive Advertising Bureau (IAB) and National Advertising
Initiative (NIA) that rely on the consumer to control what information
is collected about them and whether or not that
information is accurate. The FTC has proposed a “light switch” of
sorts to be installed in Internet browsers, where the user could click
a button disabling tracking of any kind. That, of course, eliminates
targeted advertising of any kind.
What Szabo and others support is a system of consumer choice
and business self-regulation with penalties enforced by the FTC and
the Department of Commerce.
“The bad websites, they will do whatever they want — whether
[in the presence of] old laws, present laws or future laws. What
we need to do is encourage enforcement.” Szabo continues, “If
companies self-regulate then you can encourage companies to
participate in a system that protects not only consumers but protects