June 12, 2012
On May 31, Microsoft announced that they will ship the next version of Internet Explorer with the Do Not Track (DNT) option turned on by default. DNT is a browser feature that signals websites not to collect visitor data. DNT is part of a broader industry initiative by the Digital Advertising Alliance (DAA), a group created by major advertising industry associations and vendors, to self regulate on privacy matters in order to avoid government intervention.
One of the DAA’s major principles is Consumer Control, which asks providers of desktop software and others “to obtain the consent of users before engaging in online behavioral advertising”. By shipping IE with DNT enabled, Microsoft is rejecting this principle by choosing on behalf of consumers. This decision disappointed and frustrated the industry, especially since Microsoft was at the White House and praised the legislation when it was adopted.
Reaction to Microsoft’s announcement was fast and fierce. The Interactive Advertising Bureau said that Microsoft is undermining the industry’s attempt to self regulate, and harming consumer choice. ClickZ pointed out that Microsoft’s own ad network does not acknowledge DNT, meaning it still tracks users who have, by choice, enabled DNT in their browsers. Bob Liodice, CEO of the Association of National Advertisers (ANA), asked AdExchanger “Why would you just thumb your nose at the balance of the industry after working collaboratively for so long? This is inconsistent with everything they’ve said and done, and with the commitment they’ve demonstrated as a partner to the industry.”
The biggest problem with Microsoft’s decision is that it effectively kills behavioral ad targeting, which harms advertisers, consumers and publishers. The decision hurts advertisers by making it more difficult to target the right message to the right consumer at the right time. Meeting customer needs is critical in any business, and learning about customers anonymously though their on-line actions allows advertisers to better serve their customers. The result will be untargeted, irrelevant online advertising, which increases advertiser costs and reduces ad effectiveness.
Microsoft’s decision also harms small ad supported publishers, reduces consumer access to important product information and cuts everyone’s access to ad-supported content. Without behavioral targeting, contextual ads will dominate, which prevents publishers from effectively cultivating and monetizing a unique brand and audience. Consumers will still see plenty of ads, but for products and services that are irrelevant to their needs.