Don Marti

Tue 23 Oct 2012 06:10:52 AM PDT

Can privacy tech save advertising?

Peter Klein of MediaWhiz, writing in Ad Age: Why Do Not Track Will Make Online Advertising Better (Seriously). Anti-tracking legislation will make online advertising more focused and relevant to consumers. It will set into motion a more innovative and prosperous era of digital marketing, dominated by a healthy respect for consumers' wishes about how their data are collected and used, and innovative advertising that meets their needs.

Good point. Placing ads on relevant content can help everyone, but tracking individual users is just creepy. Making the creepy side harder is just what advertising needs. Klein writes, Do Not Track will force marketers to be more creative in their campaigns, tapping into legally available data—users' expressed interests. This will foster deeper and more relevant connections between brands and consumers and benefit online advertisers in the long run.

It all goes back to the signaling problem. User tracking isn't just a problem because it sets off people's creep radar. It's a problem because, as soon as ads start being targeted to the user, they stop pulling their weight. (part 1, part 2.) The more targeted that advertising gets, the less well it carries out its essential role of sending a signal about the advertiser's intentions and resources. In media where user tracking is impractical, the users give advertising more attention.

In the long run, there are a couple of other points to keep in mind.

First, better privacy tech isn't just good for advertising, it's good for the content creators. When advertisers have to target by interest, they have to look for relevant content, instead of falling down the adtech rat hole and chasing the desired user onto the cheapest possible page. All but the bottom-feeder content sites are likely to do better under an improved privacy regime.

Ricardo Bilton for VentureBeat, in How Do Not Track could destroy the Internet as you know it, quotes Marc Groman, the director of the Networking Advertising Initiative, who says, Behavior-based advertising is absolutely critical to the long tail....And if that goes away, I don’t know how most websites are going to monetize their content. Fair point, but I won't miss Are any sites really both funding original content and dependent on behavioral ads?

Second, DNT is a nice start for privacy tech, but it's only the cornflakes in the complete breakfast. Browsers have some design features, left over from the dot-com 1990s, that might have seemed like a good idea at the time but that feed the privacy problems of today. Two of these misfeatures are information leakage in the User-Agent header and the policy for how the browser handles cookies and scripts from third party sites. There's an interesting proposal to fix the second one, but much work remains to be done.

And now that we all know that privacy tech is good for advertising, maybe we'll have more interest from forward-thinking ad agencies in making that happen. Ad agency-sponsored Internet privacy lab, anyone?