Google implements Do Not Track. Now what?

Google became the last of the big browser companies to support the Do Not Track privacy initiative by adding it into its latest developer version of Chrome. While this adds momentum and a little clarity to the movement, it leaves key questions unanswered. Will Do Not Track ease user privacy qualms, fend off restrictive government regulations, and prove a major disruption for digital advertising? Perhaps. Strict Do Not Track adherence could shift the balance of power in online advertising.

A quick refresher: Do Not Track is an HTTP header-based scheme to enable users to essentially set a beacon via their browser informing web sites that they don’t want to be served ads via third-party tracking mechanisms. Do Not Track is explicitly aimed at behavioral ad targeting based on a user’s web browsing habits. The major browser providers have now all committed to supporting Do Not Track, but their implementations vary.

But that’s not surprising. Remember, the final details of exactly how Do Not Track works aren’t finished. U.S. government regulators are dancing around the issue, hoping the industry can come to a comfortable self-regulating scheme. Neutral industry bodies like the W3C and IETF are circling efforts from advertising and publisher site groups. There’s still a debate over whether Do Not Track should cover cookies and tracking, or just advertising served based on them. Microsoft’s aggressive intent to implement Do Not Track as an opt-out option was seen by some as taking the privacy high ground but by others as going too far: both the Mozilla and Apache organizations think Microsoft has overstepped the bounds on user intent.

Advertising apocalypse?

Online advertising doomsayers like to characterize the worst-case outcome of Do Not Track as an online advertising apocalypse. Proponents point out that behavioral targeting represents less than 20 percent of today’s online ad revenues, and that brand-name publishers with desirable audiences can continue to go about their business. Long-tail sites are the most at risk, they say.

Indeed, cynics have some circumstantial evidence to help make the case that privacy hype-mongers like the Wall Street Journal might be happy with the contextually-targeted status quo. And Microsoft insists that its implementation is not a sign that it’s giving up on the advertising business.

True, search and pay-per-click direct advertising could thrive even under strict Do Not Track implementations and wide adoption. But even CPC ads – where no one pays unless a user explicitly expresses interest by clicking – would waste impressions, potentially crowding out more effective ads. And re-targeting, that is, serving up relevant ads based on previous behavior like clicks, searches, or browsing, would be devastated. Facebook’s real-time bidding “exchange” depends on re-targeting to add value (and raise Facebook’s pitiful CPMs). And the still nascent mobile ad space would benefit greatly from re-targeting.

Shifts in ad data value

Should Do Not Track derail third-party targeting, it might end up putting targeting power back in the hands of sites that collect interest information gathered on their own sites. Draft legislation seems to protect Facebook’s info on its users, gathered via profile data and Likes. Facebook’s own ad inventory would gain relative value, even if Facebook couldn’t build out the ad network we all expect it to. Likewise, Do Not Track wouldn’t seem to affect info gathered by sites with big audiences that visit lots of home-grown content – Yahoo’s fingers are crossed. Data derived from users expressing interest via explicit posting within a network like Twitter’s would also gain value.

It’s never clear whether users say they’re more concerned about privacy than their actual behavior supports. Meanwhile, it’s an election year and the ad industry hasn’t even played the jobs card. Mainstream legislators hope the industry can come up with its own solution for privacy concerns. Browsers are now moving more or less in the same direction. The next milestone to watch for is whether and how third-party ad networks fall in line.

Question of the week

How can online advertising thrive without wrecking user privacy?