Microsoft Kneecaps Advertisers ... Including Itself
By Ken Magill
Microsoft just became online advertising’s equivalent of Spain’s self flagellants, those religious zealots who walk the streets publically whipping the crap out of themselves as a form of penance.
Thing is, at least self flagellants only whip the crap out of themselves. Microsoft just whipped the crap out of everyone else, as well.
The company announced in a statement last week that Internet Explorer 10—which will be bundled into Microsoft Windows 8—will include a do-not-track feature that will be on by default.
If the decision stands, only Explorer 10 users who actively enable tracking for advertising purposes—the currency that pays for all the free content online—will be reachable by behaviorally based ads.
Thanks, Microsoft. Thanks for driving us back toward 1999 when the online ad industry was sucking wind and banner click rates were in fractional percentages.
And it’s not like no one at Microsoft understands the value of behaviorally based advertising. Consider the following from a 2009 report on the Microsoft Advertising Institute, one of the company’s own friggin’ sites:
[The following excerpt is long but worth the read if only to understand the sheer schizophrenia of Microsoft’s decision.]
“Marketers have long depended on demographic and psychographic profiles when planning advertising campaigns. After profiling their target audience by factors such as age, income, gender or attitudinal profiles, advertisers use various planning tools to find the media channels that will most effectively reach them. While this type of targeting is an essential part of any marketing strategy, it has its limitations. A new planning method called Behavior-Based Media Planning (BBMP) takes a completely different approach, basing site recommendations instead on where actual customers are on the internet.
“BBMP tools have proven themselves to generate real results. In a world where media planners are looking for every edge to produce innovative media plans that work, Behavior-Based Media Planning tools represent a new generation of marketing intelligence that will become a standard part of the planner’s strategic arsenal.”
Um, not if Microsoft has anything to say about it.
The timing of the report roughly coincided with the rise of online ad networks, the outfits that mainstreamed behavior-based media planning.
According to a BusinessWeek article from February, 2009, ad networks accounted for 30 percent of online ad spending in 2008 and were projected by some sources to grow to 50 percent in 2009.
Why? Because they delivered ads to targeted audiences on non-premium sites at much lower CPMs.
How? By tracking browser behavior.
Now thanks to Microsoft, the wildly successful ad-network industry and its demand-side platform brethren* are under serious threat, and for no good reason. There is not one shred of evidence that behaviorally based advertising has ever harmed anyone.
What’s more, Microsoft has inexplicably screwed its own online marketing efforts.
The company last year ranked 32 on Ad Age’s 100 Leading National Advertisers Report with a domestic budget alone of $1.1 billion.
Thanks to politically correct idiocy, Microsoft will hinder its agencies’ efforts to market on its behalf.
What’s more, one of Microsoft’s products is the ad-tracking solution Atlas. So the decision even hurts the ability of one of its own products to perform.
Of all the things that might kill online advertising, I never thought it would be one of our own.
*Demand-side platforms are network-agnostic ad exchanges that allow advertisers to identify a target audience and bid on available inventory across the Internet rather than buy inventory on a specific site or network.