Who Would Suffer The Most (And Least) Under Do Not Track

Dartboard; one dart on bull's eye while three darts are off-target

While many major publishers, ad networks and ad agencies have been united in their opposition to the idea of a FTC’s “Do Not Track” button, not all of these players would be impacted equally if Do Not Track were to be implemented. Publishers still rely mostly on contextual ads on their sites, while Do Not Track would cause the most disruption in the world of behavioral targeted advertising. Who relies most on that behavioral data? The ad networks that sell it to the ad agencies, and, to a lesser degree, the ad agencies themselves that use it to promise their clients greater effectiveness.

Where publishers feel Do Not Track would hurt them most is in disrupting their internal ad settings, things like “frequency caps,” which allow a publisher to limit the same ad users might see as they navigate the site and are based in cookies. Also, they feel that eliminating those cookies would make their sites more annoying to users — who wants to sign in to a site everytime? — and would reduce their traffic and time spent on the site and ultimately hurt them that way. But agencies and advertisers and ad networks have the most to lose.

Contextual over behavioral: Publishers were relieved by one thing in the FTC’s new guidelines — contextual ad targeting is left alone. The behavioral targeting the regulators are focused on pertains to the flash cookies that are placed on sites that track a publisher’s readers from site to site to site. While the CPMs on those behaviorally targeted ads could provide publishers with CPMs that are at least 10- to 15 percent higher than a regular online ad, at this point, the revenues don’t amount to much.

Pam Horan, president of the Online Publishers Association, estimated that the amount of revenues her group’s members take in from behavioral targeting is in “the low double digits.” Several major publishers I spoke with insisted that in their personal experience, it’s often even less than that. “Although behavioral ads are something that publishers will offer more over time, advertisers on premium sites find more value in contextual advertising,” Horan said.

Rooting for Do Not Track: There is one way in which Do Not Track could even help publishers. Publishers get a tiny amount of revenue from selling data on their audiences to ad networks, but that relationship with ad networks sometimes creates more headaches than anything else. Some ad networks turn around and sell that data to advertisers and agencies (in some cases, these are unauthorized sales) and do not share that revenue with the publishers whose customers they’re helping to target. If Do Not Track makes life more difficult for some of these ad networks — and even puts some of them out of business — some of that power that publishers have ceded to the ad networks could flow back into the hands of the publishers. “I wouldn’t mind if half the audience of data aggregators who scrape our data without permission would go out of business,” said one publisher.

“If the FTC’s Do Not Track button does get implemented, it would devastate a lot of these companies,” says Mike Cassidy, CEO of Undertone Networks, a display and video ad network. He adds: “But they’re already being devastated by the ad agencies trading desks, which is diminishing their value faster than talk of new regulation.”

Earlier this month, Krux Digital, a company that promises to protect publishers from having their user data scraped without their authorization, attempted to quantify how much of skimming is going on and what it costs publishers of the 50 most-visited websites. The company estimated that there was $850 million in lost revenue annually for premium publishers. While that amount won’t make or break publishers, it has made them more amenable to placing some kind of controls on third-party data collectors.

Of course, Do Not Track may never happen — in which case, the question of who stands to win or lose the most under this kind of policy is moot. Says Cassidy: “I was in Washington, D.C., four years ago and heard a Congressman railing about what sort of ads were following his daughter,” he said. “So my feeling about what’s going on now? Well, talk to me again in four years and let’s see if we’re still not having the same conversation.”

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