Don Marti

Fri 24 Feb 2012 07:47:58 AM PST

Google gets DNT

Good news from the big G: Google commits to respecting "Do Not Track" in their advertisements.

SFX: the exploding head of Jeff Jarvis, head cheerleader for creepy database marketing everywhere. DNT is the "wholesale devaluing of advertising in a medium." People don't realize how much great online stuff owes its existence to hard-to-understand tracking practices.

Really?

There has to be something more going on here. If tracking is worth so much, why would the undisputed champion of online advertising just throw away so much potential revenue? Have the Googlers made themselves stupid?

I don't think so. Let's dig up the latest version of a classic chart. Compare the time people spend on different media to the percentage of advertising budgets spent there.

Internet and mobile advertising, which have the best potential for tracking, consistently pull in less ad revenue than their time share would justify.

If tracked ads are so much more valuable, then extra money should be chasing those highly-tracked Internet users. Thirty seconds of exposure to Jane Doe, expectant mom in ZIP code 90210, should be worth way more than 30 seconds in front of Joe Random Super Bowl Fan.

But they aren't. Manifest Density blog: "Is it really a coincidence that the advertising medium with the best instrumentation also appears to be the least effective?"

It's not a coincidence. It's basic economics. Advertising's main role is signaling. Most of why you spend money on advertising is to say "I spent money on advertising."

Tracking reduces the effectiveness of the signal. The recipient can't tell if you're really supporting a product with advertising, or just targeting him. In a DNT world, Google can get the best of both worlds: match ads to relevant content, but get the extra value of signaling to non-targeted users.

Background and links here: Ad targeting: better is worse?