By providing consumers with the ability to opt out of tracking, will Google undermine its business?
At first glance, in tacitly accepting the rumblings of the do-not-track online advertising legislation crowd, Google seems to have released an instruction manual on how to wreck Google's business.
How far can this go? Likely, Google's proactive stance will do the trick of generating compromise in the space, so it does not threaten your advertising campaigns, nor Google's revenue stream.
"Hidden Persuaders" or Better Targeting?
There is still a lingering, superstitious belief that advertising is magically subliminal and can make people bend to its will. That's mostly nonsense.
In the online world, we have moved a long way from the outmoded belief that advertising is sinister, insidious, and akin to mind control. The reason is mainly data. Data that provides better fits with willing and interested customers.
Another reason that online targeting is good is permission. It's annoying to see laxative ads on TV, so you'd rather mute them, or pay for a way to make them go away. Online, ideally there would be a way to opt out of certain kinds of ads - like those that target you based on previous behavior or personalized qualities you've exhibited while surfing the Web - that you simply dislike for some reason.
You can't easily opt out of all advertising online, for the same reason that it's free to use the Google search engine, Gmail, and to read all that free content.
Anyway - getting ahead of potential do-not-track legislation was Google's goal when it recently announced an enhanced form of opt-out management that comes in the form of Chrome browser settings, with other browsers being included in future releases.
But what exactly does do not track mean? Is it going to go farther than this? Let's see.
Is DoubleClick's Cookie Spyware?
The idea of Google's approach to do not track is that you can opt out of "behavioral" forms of display advertising. How these work (with my adjective added) is essentially based on an "aggressive cookie" that maintains a file of websites that a user has visited that also contains that network's cookie. For large networks like DoubleClick, the information about your behavior becomes that much more complete.
While there is no official definition of spyware, there is something of a groundswell of consumer distaste for these kinds of cookies. Some experts do not hesitate to call DoubleClick's cookie spyware.
For some regulators and consumers, the do-not-track concept could conceivably become much more far-reaching, based on how little they understand the issues and tradeoffs.
By providing consumers with instructions for opting out of "tracking," has Google quietly left the door open for savvy consumers to undermine its whole business?
What would undermine Google's whole business is if consumers were able to opt out of the AdWords and Google Analytics (and other) forms of highly accurate ad tracking that allow advertisers to measure goals.
If Google isn't providing advertisers with performance marketing of a certain type, then it goes from a hugely profitable company to one that incurs staggering losses every year. For some reason, though, Google doesn't seem worried, and neither do investors in its stock.
I asked Google to clarify what its current opt-out management encompasses. Essentially, this type of tracking opt-out only refers to display ad networks and other forms of behavioral advertising and retargeting.
What has made the recent announcement worthy of mention is that Google is "enhancing" the opt-out decision so it won't be lost anytime you clear cookies, change browser settings, etc. You'd use a plug-in to "hold" your opt-out preferences permanently.
This Doesn't Extend to All Google Advertising Cookies
Importantly, according to Google, this does not extend to all Google advertising cookies. Google replied: "No, for Google, it applies only to the Google DoubleClick cookie. But just to clarify, Google is not the only ad network that this affects. It also affects all members of the NAI who have opt-outs (which is to say, all of them). You'd have to check with each company if you wanted to know which of their cookies it applies to."
Behavioral advertising in the DoubleClick network makes up only a proportion of those ad revenues, and Google's overall AdWords (and other) ad revenue streams currently dwarf DoubleClick's. In these scenarios, only 5 to 10 percent of users ever bother tinkering with their browser settings, and such opt-outs don't preclude revenue-generating ads from being served anyway (they just lower the average value to publishers of some of the ads). Given all this, the "instruction manual" Google has given to tracking-shy consumers amounts to a very minor revenue impact on the company.
Death of All Cookies?
And yet the specter looms, as ever, that mass action by consumers or hard-line regulation could virtually wipe away large swaths of the digital advertising world. If 99 percent of users went cookie-free (by blocking most or all of them in their browsers), then other ad performance measurement solutions would have to be found, and those, too, could (conceivably) be banned.
Google, and the industry as a whole, has been fairly responsible about posting the type of information that would set online advertising back to the Stone Age. For the most part, the benefits of giving up some privacy has outweighed the drawbacks in consumers' minds. But the slightly scary part for companies like Google - and most heavy online advertisers - is that a large part of the indifference has come from consumers simply not making a conscious choice about their privacy settings.
How likely is that to happen? It will happen if enough people get up on enough high horses to determine whether not just behavioral advertising, but all forms of online ad tracking, are as harmful as tobacco, or whether – as with junk food – the issue is debatable. Certainly, the legislation will be more draconian in Europe than in North America.
Draconian legislation isn't the way to go. Consumer choice, transparency, and opt-out mechanisms are the best compromise.
On the heels of a fantastic event in New York City, ClickZ Live is taking the fun and learning to Toronto, June 23-25. With over 15 years' experience delivering industry-leading events, ClickZ Live offers an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!
Want to learn more? Join us at ClickZ Live San Francisco, Aug 10-12!
Educating marketers for over 15 years, ClickZ Live brings together industry thought leaders from the largest brands and agencies to deliver the most advanced, educational digital marketing agenda. Register today and save $500!
Goodman is founder and President of Toronto-based Page Zero Media, a full-service marketing agency founded in 2000. Page Zero focuses on paid search campaigns as well as a variety of custom digital marketing programs. Clients include Direct Energy, Canon, MIT, BLR, and a host of others. He is also co-founder of Traffick.com, an award-winning industry commentary site; author of Winning Results with Google AdWords (McGraw-Hill, 2nd ed., 2008); and frequently quoted in the business press. In recent years he has acted as program chair for the SES Toronto conference and all told, has spoken or moderated at countless SES events since 2002. His spare time eccentricities include rollerblading without kneepads and naming his Japanese maples. Also in his spare time, he co-founded HomeStars, a consumer review site with aspirations to become "the TripAdvisor for home improvement." He lives in Toronto with his wife Carolyn.
Gartner Magic Quadrant for Digital Commerce
This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.
Paid Search in the Mobile Era
Google reports that paid search ads are currently driving 40+ million calls per month. Cost per click is increasing, paid search budgets are growing, and mobile continues to dominate. It's time to revamp old search strategies, reimagine stale best practices, and add new layers data to your analytics.
June 10, 2015
12:00pm ET/9:00am PT