The Do Not Track proposal announced last week by CDT and eight other groups — which aims to improve consumer choices about behavioral targeting in online advertising — has generated a diverse array of reactions in the press. One of these, discussed in BusinessWeek and elsewhere, is the idea that adoption of the Do Not Track List would reduce advertising revenue. The way the argument goes is that behaviorally targeted ads are more valuable than other kinds of ads, and use of the Do Not Track List would mean that fewer behaviorally targeted ads would get served to Internet users. BusinessWeek cites Tim Vanderhook, CEO of behavioral ad network Specific Media:

“The value of advertising on the Internet would drop because you couldn’t say, ‘This is a finance person. Let me show them a finance ad,’” says Tim Vanderhook, chief executive of Specific Media, one of the largest privately held behaviorally targeted ad networks. “So the only way to make as much money is a) make them pay or b) show them more ads.”

The funny thing about this line of reasoning is that consumers already have a way to opt out of some behavioral targeting — the Network Advertising Initiative (NAI) opt-out cookie. Specific Media itself is a member of the NAI and provides this tool to Internet users (see theirprivacy policy for more information). Thus, the argument that ad revenues decrease when consumers are provided with a choice about whether to be behaviorally targeted can only really mean one of two things: behavioral targeting firms have somehow overcome the loss of revenue associated with the use of the NAI opt out, or the NAI opt out doesn’t work.

We’re pretty sure it’s the latter, which is one of the reasons why we helped to develop the Do Not Track proposal in the first place. Do Not Track has the same goals as the NAI opt out: to provide consumers with a choice about whether to be tracked online for advertising purposes. The difference is that the Do Not Track list would be (1) well-understood and accessible to consumers, (2) persistent, (3) applicable to the behavioral targeting industry at large, rather than a small subset of companies, and (4) enforceable against all types of tracking technologies. By arguing that the Do Not Track List would hurt ad revenues, ad networks are essentially arguing that the system they provide for consumer choice — the NAI opt out — is broken. Do Not Track merely seeks to fix it.

This entry was posted on Thursday, November 8th, 2007 at 5:49 pm and is filed under CDT, Consumer Privacy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.