Digital Media Lesson II – Saying No to Free-riders

With 2012 elections rapidly approaching, new digital advertising regulatory threats are appearing almost daily. Considering that browser cookies today are used for most measurement and targeting technologies, any drastic changes could mean an effective collapse of today’s digital ad ecosystem as we know it.

 

In a seminal but prescient study, Norm Proselytizers Create a Privacy Entitlement in Cyberspace, Professor Steven A. Hetcher described digital media’s current predicament most presciently. In short, years of social entrepreneurs moralizing data collection have made self-regulation attempts by industry trade groups (IABOPANAIWAA) and feckless Chief Privacy Officers inadequate against an activist federal administration, power-seeking bureaucrats and high-minded lawmakers.

 

While fair-minded consumers might not like being tracked, most will acknowledge that they personally and directly benefit from the vast free digital media that is subsidized by ad targeting. The fact is that the users that block 3rd party ad server/targeting cookies or routinely delete their cookies effectively rob digital media companies. Content and services are provided to the consumer with the implicit expectation of a particular financial benefit (advertising revenue) to the digital media company.

 

Meanwhile, digital marketers and their agencies expect digital media partners to aggregate and deliver audiences as billed. Digital media’s collective ostrich response has not worked out for anyone but the usual suspects: politicians and attorneys. And when it comes to privacy, it is painfully clear to advertisers that they are left to fend for themselves. While regulation fears may have boosted trade group membership, it has not helped advertisers at all. Quite the contrary: with the impotent opt-out ad icon (think 1%), Web site publishers are ducking yet again and passing the buck to ad networks and advertisers. Yet, targeted ads are delivered to their users by their ad servers because of the tags on their sites generating them ad revenue. People visits Web sites not ad networks

 

Ironically, it is the digital media themselves that are actually in the best position to fix this for once and for all. Professor Hetcher referred to this as the “filling the privacy norm gap” – a job that apparently nobody wants except the government. To heal this self-inflicted wound, digital media must first learn to just say no to traffic at all costs and the rampant user free-riding that powers it. Such a disciplined strategy requires an analytical approach to audience measurement and ongoing inventory yield management.

 

At the same time, digital media companies know full well that most users didn’t read their respective terms of service agreements. For this reason there are some simple steps that digital media can take to fill the Hetcherian privacy norm gap. It is simply by re-establishing the intrinsic quid-pro-quo of anonymous data-sharing in exchange for free content and services. One though-starter is blocking free-riders through required registration another might be to charge for ad-free subscriptions; another is to embrace decisive data management and sharing.

 

These strategies have multiple benefits to both digital media companies and consumers. Clearly, pulling it all together will require getting multiple stakeholders aligned and executing together: legal, ad sales, engineering, marketing, technology, finance and certainly ad ops. The stakes are high and there is no guarantee of success. However, the days of traffic at all cost are coming to an end. Let’s face it: all traffic is not created equal.

 

Yet, until digital media companies muster the intestinal fortitude to just say no to free-riders, the vocal and technical activist minority will continue frame the debate…eventually prodding government into regulation and with it the end to digital advertising as we know it today.

 

Read the article along with Part I on the Tip Of The Spear Blog.

Dominic TassoneWith 2012 elections rapidly approaching, new digital advertising regulatory threats are appearing almost daily. Considering that browser cookies today are used for most measurement and targeting technologies, any drastic changes could mean an effective collapse of today’s digital ad ecosystem as we know it. In a seminal but prescient study, Norm Proselytizers Create a Privacy Entitlement in Cyberspace, Professor Steven A. Hetcher described digital media’s current predicament most presciently. In short, years of social entrepreneurs moralizing data collection have made self-regulation attempts by industry trade groups (IABOPANAIWAA) and feckless Chief Privacy Officers inadequate against an activist federal administration, power-seeking bureaucrats and high-minded lawmakers.