Preston Gralla: Is Microsoft out to kill online advertising? Let's get real

If you believe some people, Windows 8 will sound the death knell of online advertising, helping destroy the fast-growing industry. Their worry is that in Windows 8, Internet Explorer 10 automatically turns on a feature called "Do Not Track," which sends a signal to websites saying that the browser doesn't want its activities tracked. So, the argument goes, advertisers wouldn't be able to serve targeted ads to users. And without targeted advertising, advertisers would be much less interested in spending big money online.

In truth, though, Windows 8 won't kill online advertising. Microsoft, as much as anyone else, has its eyes on that multibillion-dollar prize, and turning on DNT (as insiders call the Do Not Track feature) won't hurt the industry at all. In fact, it will help it.

The idea behind DNT is simple: Give people a way to take control over their privacy when they browse the Web. Ad networks, marketing firms and big sites like Google can gather an enormous amount of information about people if they are able to track their online activities across websites, creating profiles of their likes, dislikes, buying habits and more. DNT would give people some control over that tracking and profiling.

But the online ad industry doesn't like this idea, and it particularly doesn't like Microsoft's decision to make "DNT on" the default setting in IE10. The Digital Advertising Alliance (DAA), a coalition of marketing, advertising and media groups, complained to The Wall Street Journal that Microsoft's decision was "unilateral," saying the industry instead supports "consumer choice, not a choice made by one browser or technology vendor." (Ahem. Attention, DAA: Consumers retain the choice to turn DNT off.) On the other side of the issue, the EU has applauded Microsoft's action.

Ironically, DNT is nearly worthless as things stand today, because there's no agreement on how it should work. The Worldwide Web Consortium has set up a working group composed of online advertisers, privacy advocates, academics, government agencies and others to figure that out. So far, they've agreed that browsers should let people turn DNT on and off, but there's still no consensus on what turning DNT on would actually mean or whether the default setting should be on or off. But without an agreement on what a DNT signal should mean, advertisers can simply ignore DNT signals. Microsoft Chief Privacy Officer Brendon Lynch said as much in a blog back in May.

So how is Microsoft helping the advertising industry? By turning on DNT by default, it is forcing advertisers to decide what the signal should do. Microsoft, unlike the ad industry, seems to recognize that a business model based on keeping consumers in the dark about privacy won't work.

Rik van der Kooi, head of the advertising business group at Microsoft, recently wrote in Adweek that if people are given control over their personal information and are educated about how their Web experience can be enriched by sharing some of it, the ad industry will be better off. He wrote: "By building trust and demonstrating real value -- serving ads when they are accretive to the consumer experience and not serving them when they aren't -- consumers will be willing to share more information with marketers and online services."

I think he's right. You have to believe that consumers respond more readily to things they're interested in than they do to things they don't care to see.

Preston Gralla is a contributing editor and the author of more than 35 books, including How the Internet Works (Que, 2006).

Copyright © 2012 IDG Communications, Inc.

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