To Track or Not To Track

By Dr. Sean Carton, Chief Creative Officer and Professor of the Practice at the University of Baltimore

By now you’ve probably noticed that some websites do an eerily-accurate job of showing you ads for stuff that you’re actually interested in. If you’re a golfer you may see lots of ads for clubs, balls, or vacations. If you’re into a particular football team you may notice lots of ads for schwag associated with that team. Sometimes the ads even pertain to what you’re doing: people searching for cars on the web tend to see a lot of car advertising right when they need to.

How does this happen? Even if you’re only slightly suspicious, sometimes it’s enough to make you paranoid. Who’s watching you? How do they know what you’re into? Are online advertisers somehow involved in a conspiracy designed to target you personally?

Well...sorta. But it’s not just you; people who look at sites that you look at or search for the same kind of information you do also see much of the same stuff. It’s all done through the magic of something called “behavioral targeting.”

How it works is pretty simple. As you surf the web, different sites are placing “cookies” (small strings of information) into a special storage area in your browser. Ad servers—the software that publishers use to put ads on websites—can read these cookies and use them to determine where you’ve been and what kind of information you’ve been looking at. Based on that information the ad server can then go into its database and display ads based on how well they match up to pre-determined behavioral criteria. Poof! You’ve been targeted.

If this sounds spooky (or even a little creepy) to you, you’re not alone: a 2010 Gallup Poll found that nearly 70% of Americans didn’t want websites matching ads to their particular interests. A pretty solid majority (61%) felt that even if such practices were necessary to keep content free, their perceived loss of privacy wasn’t worth the trade-off. A similar study in 2009 conducted by TRUSTefound that while many consumers (63.9%) are only interested in seeing ads from brands they know and trust, a little more than half (50.5%) said that they’re uncomfortable with advertisers using information gleaned from their online behavior to serve relevant ads.

This consumer distrust hasn’t gone unnoticed by the Federal Government. In December of 2010, the Federal Trade Commission released a report on online privacy that endorses a “Do Not Track” mechanism for online consumers. This mechanism would be browser-based, allowing consumers to pick and choose what kind of information they wanted to provide for advertisers as well as giving consumers the ability to “opt-out” of online tracking all together.

Ever since the release of the report, the FTC has been gathering feedback from consumers, publishers, advertisers, and industry experts on the risks and benefits of Do Not Track. To date (January 28, 2011) no decision has been rendered at the FTC, but legislation is pending in Congress to mandate the use of Do Not Track online.

Is Do Not Track a good idea? While some studies have shown that behavioral tracking doubles advertising effectiveness, the jury is still out because behavioral advertising’s higher cost makes it difficult to compare effectiveness from the standpoint of ROI (return on investment). After all, if behaviorally-targeted ads are twice as effective as “regular,” non-targeted ads but are also twice as expensive, couldn’t advertisers accomplish the same goal by simply buying twice as many ads?

Possibly, but I’d argue that the effect of behaviorally-targeted advertising goes beyond simply serving up the right ad to the right person. Ads are (whether we like it or not) a form of content, and the overall online experience is enhanced by seeing content that matches our interests. If someone’s not interested in sports, isn’t it better to not see sports-related advertising? Behaviorally-targeted ads also have the potential for actually reducing the number of ads a website has to serve in order to make money: ads that are twice as effective need half as much exposure. “Dumb” (non-targeted) advertising would require publishers to cram twice the number of ads than they currently do onto a page in order to return the same effectiveness to advertisers. And we all can agree (even if you’re in the ad business!) that more ads usually equals a less-pleasant experience!

Unfortunately, the longer-term repercussions of blocking tracking may be scarier for consumers than simply seeing more ads. To use a political term, the “blowback” from such an initiative could also result in the following consequences:

1.  Less free (quality) content. If advertisers can’t run effective campaigns, they won’t advertise. Less advertising means less money to publishers and less money for publishers means that they can’t pay their writers.

2.  Less relevant (and more) advertising for consumers. I touched on this a bit above, but if you’re going to have to see ads anyway, wouldn’t you rather see ads for stuff you’re interested in?

3.  Consolidation. If publishers can’t track, they may be forced to use expensive market research techniques to gather all kinds of information they need to sell their advertising inventory to advertisers. Small publishers won’t be able to compete and will be forced to shut down.

4.  More intrusive ad models. If tracking doesn’t allow advertisers to target their audiences, they may have to turn to more intrusive ad models (think pop-ups 2.0) to get heard.

5.  Eventual workarounds that are even more intrusive. Unscrupulous advertisers who can’t turn to targeting may utilize technology to “trick” users into giving up even more potentially-damaging information.

6.  Economic stratification of privacy. If publishers have to turn to subscription models to afford to publish content, consumers who can’t afford subscriptions will be shut out. On the other hand, consumers who want “free” content may be forced to give up more of their privacy than they do now.

7.  A chilling effect on innovation. Do Not Track could ultimately raise the bar for small publishers and entrepreneurs who want to support their efforts with advertising. The risk of such ventures increases when it takes more money to support what they’re doing, and many may just decide that the risk isn’t worth it.

Will tomorrow’s consumers be given the ability to opt-out of tracking? Only time and the political climate will tell. For now, educating yourself about the pros and cons of the topic is the best thing you can do before you make up your mind about to track or not to track.

-Dr. Sean Carton