Previously published in Direct Marketing News
Digital marketers are torn on the potential effect of "Do Not Track" legislation.
YES
Stuart Ingis, partner at Venable LLP, serves as counsel to the Digital Advertising Alliance. He has practiced Internet law for 15 years.
Although legislators and regulators are acting with good intentions, the "Do Not Track" slogan fuels baseless fears about online privacy and implies that consumers should be able to stop all data collection. Online data collection is not a "problem" to be fixed, but an integral part of the Internet. The Internet's architecture requires websites to collect non-personal information for basic functions, from serving a page to preventing a browser from receiving the same ad repeatedly. The DNT slogan suggests to consumers that stopping all such data collection is possible and desirable. In fact, such legislation could harm consumers' online experience and is unnecessary because robust industry self-regulation is already giving consumers transparency and choice over online data collection.
Online advertising, in particular, is indispensable to the Internet as we know it. Online advertising subsidizes the wealth of content and services that consumers value. Without advertising support, consumers would likely find that their online experience is transformed by new paywalls, fewer offerings, or both. The Internet economy also drives economic growth and job creation. While proponents of legislation may argue that a law can be carefully drafted, the fact is that the system is so complex and evolving so rapidly that government intervention would likely be a "cure" that hurts the patient.
There is a better way. The business community recognizes that some consumers prefer to limit online data collection, particularly for interest-based advertising. Through the Digital Advertising Alliance (DAA), industry has invested millions of dollars in building a self-regulatory system that balances consumers' interests in privacy and innovation. The DAA's Self-Regulatory Program gives consumers transparency and choice over their browsing data, while ensuring that necessary business and technical functions can continue.
The cornerstone of the DAA's Self-Regulatory Program is our distinctive Advertising Option Icon. When data is collected for interest-based advertising purposes, this icon appears in an advertisement right where the consumer will notice it. Consumers can click this icon for information on interest-based advertising and to stop participating companies from collecting their browsing data.
The icon is being served in over one trillion ad impressions per month, and the DAA estimates that the icon is reaching virtually all U.S. consumers. This program is actively enforced by the Direct Marketing Association (DMA) and the Council of Better Business Bureaus (CBBB). The Federal Trade Commission (FTC), Commerce Department, and the White House have all praised the DAA's achievements.
Unlike legislation, self-regulation is flexible enough to adapt to changing technologies and consumer expectations. This flexibility allows self-regulatory standards to be more detailed and far-reaching. And all of the DAA's advances have come at no cost to taxpayers, because industry recognizes that consumer trust is essential for the Internet to thrive. Rather than enacting legislation to fix a nonexistent problem, Congress should allow this unprecedented self-regulatory effort to flourish without government interference.
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NO
Ed Kats, president of MediaWhiz, has 20 years of marketing experience.
Proposed "Do Not Track" (DNT) legislation will create numerous barriers for advertisers, brands, and agencies. The ability to track consumers' online purchasing habits and deliver targeted ads based on data collected is a cornerstone of e-commerce.
DNT legislation will make online ads less relevant, forcing potentially unforeseeable changes—not to mention increased costs—into the digital ecosystem. This will adversely affect consumers' online experiences in a manner few proponents are willing to admit.
Despite these issues, the enactment of DNT legislation will not destroy online advertising.
While we do not wish to see this legislation passed, we believe it would force marketers to be more creative in their campaigns. It may foster the development of closer connections and opt-ins between brands and consumers. This, in turn, will deliver more detailed customer data and more successful purchase paths.
Numerous products and services exist that help agencies and advertisers target consumers and collect publicly available data. If advertisers are compelled to collect that information offline (as would be the case if DNT legislation is passed), those capabilities will still remain.
The two behemoths of online advertising—Google and Facebook—offer examples of how DNT legislation could imperil future growth and innovation of online advertising but won't dampen the industry's prospects.
Google's bread-and-butter of search and its emerging display network are being augmented by new forms of digital media integration. Google's goal of combining publicly available consumer data from its Google+ social network with users' search terms to deliver more targeted and relevant searches is delivering richer search results that benefit consumers.
Likewise, Facebook allows marketers to segment their ads based on the content users place on the social network via its Sponsored Stories ads.
These companies have built their businesses and are planning for growth around the ability to track consumers' online behaviors. It is unlikely they will sit idle while legislators try to rewire online advertising.
If DNT legislation is passed, the focus of online marketing will shift to consumers' direct and personal interactions with brands. It will require a reassessment by brands of their online marketing efforts, but it won't kill online advertising. New technology will emerge, enabling marketers to better target consumers with or without online tracking capabilities.
An industry that generates $31 billion in annual revenue is well positioned to adapt should anti-tracking legislation be passed. Digital marketers should respect, not fear, calls for DNT.
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