The IAB, DAA, DMA and NAI have done an admirable job in closing ranks in maintaining and supporting the technological status quo of the online ad industry. Promoting policies and standards that serve to institutionalize self-regulation and consumer choice over any kind of external regulation is viewed by these memberships to benefit the online ad industry as it is currently constituted. Attempting to institutionalize best practices is what industry groups do, and until now they have done a good job.
The challenge we all have with this “back and forth” is that cookie-based targeting is starting to look like an example of the old adage “when all you have is a hammer, every problem looks like a nail.” Behavioral targeting has been an industry standard since the late 1990’s when Netscape Navigator 1.0 was introduced. To this day, the infrastructure of ad networks, DSP’s, DMP’s and Exchanges are still largely dependent on cookies – and thus the industry has worked very hard to protect the “cookie-standard” in order to guard against any industry disruption.
Industry groups have worked so hard in fact, that it gave birth to an entire cottage industry of compliance testing, certifications, logos and (especially) dues. Still, the drumbeat coming from Washington gets less nuanced and consistently louder. Each quarter, legislators parse the rhetoric a little more carefully and at this point they seem close to exposing the real issues of people tracking and data collection. The ad industry vendors watching this process unfold have been more than willing to seek cover and acquire a little insurance by sporting the proper logos on their websites – but ultimately what we are seeing is that self-regulation on an issue like privacy is not a defensible position.
Whatever your opinion on Microsoft breaking ranks with IE 10 and “Do Not Track” - it also has to strike you as competitively enlightened. On three fronts, this move makes sense for Microsoft. In my opinion, it will soon make sense for the online advertising industry as well.
- Metaphorically, the browser could be looked at as the equivalent of your local mall. You go to the mall for variety and a comfortable shopping experience. You don’t go to that mall if you think it isn’t safe. A week before the IE 10 announcement analysts announced that Chrome has moved into first place over IE and Safari as being most popular and most used browser. Safety, unless you are threatened personally, is nothing more than perception. As the Washington drumbeat gets louder, the perception of concern around Do Not Track gets stronger. A positioning of IE as the safest browser could be a very smart move in the near term.
- Maybe Microsoft determined it was a good time to do something different with online advertising. Running behind Google, Facebook, Yahoo and maybe AOL and still chasing cookies like everyone else, doesn’t seem to make for a great business model – especially when technology is your calling card.
- Maybe (and this is really a guess) Microsoft figured out that not only were Ed Markey and the FTC closing in on “Do Not Track,” that there was actually a realization that behavioral targeting, as a technical standard, may have outlived its usefulness. Simple math reveals that the future of behavioral targeting was bound to be limited – with more people blocking cookies and cookies expiring at an increasingly rapid rate, coverage of unique users for national campaigns is only averaging around 33%, with local campaigns averaging less than 10% in most categories. Reaching one-third of the available audience and generating click through rates of one-tenth of one percent is a tough way to make ROI goals. Every Ad Network, DSP, and Advertiser complains about lack of reach – maybe Microsoft recognized this and decided it was time to take a different path.
Obviously my thoughts regarding motives are pure conjecture, but the Microsoft move does serve to illustrate the benefits of an entirely different approach to audience targeting. Whether Microsoft has that new technical approach in mind or not, the horse is out of the barn with “Do Not Track,” and the industry needs to step up with an alternative that addresses the key issues of reach, data integrity and privacy.
We believe one approach to these problems lies with technology that defines audiences by their location and the hundreds of demographic and socio-economic attributes. Applying genetic algorithms and predictive modeling across hundreds of variables allows the scoring and clustering of like audiences into target-ready, online segments. IP Zones identifies concentrations of people with statistically similar profiles by modeling customers who have voted with their wallets for particular products and services. The audience segments that are formed represent multiple dimensions of demographic, socio-economic and purchasing values coming together, improving the data integrity of each audience segment for targeting, while still protecting user privacy.
IP Zones is patent pending technology that can be deployed for commercial and public interest campaigns at national, state and the local levels because the reach to every audience is both qualified with nearly 100% coverage. There are no cookies or pixel placement so no visitor can ever be tracked or identified. With better data integrity and at least a three to one advantage in coverage, results in campaigns for IP Zones in over 100 campaigns across ten top advertising categories is averaging 130% lift over the behavioral targeted alternative.
It will be interesting to see how IE 10 rolls out in the coming months. In spite of all the industry PR gymnastics to protect behavioral targeting and maintain industry stability, there may well be a case to be made that behavioral targeting is not worth protecting.
I think Microsoft is on to something because I believe they know a little something about competitive positioning and maybe even how Washington works. I believe that the regulatory outcome for “Do Not Track” is “baked” and that as an industry we need to adapt and move forward. We need to innovate with new, safer, targeting technologies like IP Zones that get us beyond the legacy of the Netscape Browser to a place where we can safely advance the art of online ad targeting into the next generation.