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Microsoft Causes Uproar with “Do Not Track” Default
Tuesday, June 12 2012

The use of data to drive marketing and advertising is certainly nothing new, although its role has grown exponentially just in the past few years, especially in the online space. Today, website visitors' behaviors are tracked at a very granular level by both website owners and the advertisers that plaster display ads around much of the content we access and interact with today. From the perspective of online proprietors and the advertisers displayed on their sites, it is beneficial to use this data to better target ads and messaging to users; they claim it results in more relevant ads, which in turn increases response rates and generates more revenue for the site owner and advertiser. Consumer advocates and data privacy experts, on the other hand, argue that this detailed data is often collected unbeknownst to the user, and the level of detail collected borders on being personally identifiable.

A few years ago, the U.S. Federal Trade Commission gave a very stern and straightforward warning to the online advertising industry: start self-regulating by creating guidelines around data and provide consumers with choice on its collection, or inevitably face federal government regulation. The industry took the warning to heart, creating self-regulatory guidelines for advertisers to follow and starting an initiative to implement a "Do Not Track" standard that would easily let consumers opt-out of behavioral tracking and targeting. Enabling this type of feature is no small task: it requires major advertisers and ad networks, online publishers, online standards bodies, and web browser developers working in unison to come up with the proper mechanisms across the online ecosystem to manage and enforce preferences.

It seemed like this effort was headed in the right direction, with all parties working together toward a common framework to effectively create "Do Not Track." At the end of May, however, Microsoft's Chief Privacy Officer, Brendon Lynch, announced that in its forthcoming release of Internet Explorer 10 in Windows 8, the browser would ship with the "opt-out" setting for Do Not Track set as a default, effectively stifling behavioral monitoring out the gate. While Internet Explorer's browser market share has eroded due to entrants like Mozilla Firefox and Google Chrome, by most counts it still garners one-quarter to one-third of worldwide browser usage, which is a significant amount of volume.

Due to Microsoft's still-prominent position in the browser space, this announcement caused a bit of an uproar in the online ad industry. Interactive Advertising Bureau (IAB) head Randall Rothenberg called the move "a mystery, a disappointment, a frustration". Companies that are part of the Digital Advertising Alliance (DAA), which is helping develop the guidelines for Do Not Track, are now claiming that Microsoft might be a "bad actor" as it relates to these guidelines, threatening to not honor Internet Explorer's preferences when users visit otherwise compliant websites. Meanwhile, the move is getting praise from consumers and from Tony Bradley at PC World, supporting Microsoft's position that it is putting users and consumers first.

Is Microsoft really that concerned about users' privacy and rights? Maybe, but that is likely not the first intention with its announcement. While the company has an advertising business and an ad network (Microsoft Advertising), it is not the company's bread and butter. Contrast that with competitor Google, which also offers a browser but relies heavily on advertising as a central part of its revenue mix. Microsoft is taking a strategic gamble that its position on Do Not Track will pay off by differentiating Internet Explorer as a consumer-friendly browser, helping it regain lost share. In an updated post from Brendon Lynch last week, Microsoft is doubling down on its decision, and it will be important to see how this issue shakes out and helps define the future of online tracking and targeting.