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Online Marketing's Biggest Threat Isn't What You Think

11/27/12

By Ken Magill

We all know the most immediate threats to online marketing: Swirly eyed privacy zealots allowed to make crazy claims without being challenged by a compliant, intellectually lazy consumer press, and a Federal Trade Commission chairman who thinks behavioral ad targeting may result in someone getting their health insurance rates increased as a result of having bought a deep fryer online.

They’re the most immediate threats, but not the biggest.

The biggest threat to online marketing and advertising is the success of the FTC’s do-not-call registry.

It surpassed 200 million phone numbers in 2010, which is pretty impressive given that the U.S. Census Bureau estimated there were 114,235,996 households in America that same year.

The dinnertime phone calls stopped—except for, of course, the political ones—life got more peaceful and the U.S. economy didn’t come to a crashing halt.

Not surprisingly, the telemarketing industry took a pretty good hit.

In 2003, before the do-not-call list went into force, the Bureau of Labor Statistics reported that about 405,000 people worked as telemarketers. As of May, 2011, just over 258,000 worked as telemarketers, according to the BLS.

Yes, a bunch of people apparently had to find less-annoying ways to make a living.

I’m not shedding any tears over the telemarketing industry. My telephone number is one of those on the do-not-call list.

But here is the problem with that list: The people pushing for a do-not-track mechanism for online advertising are forever comparing it with the do not call registry, implying one would be just as good for consumers as the other.

“Saying that online companies have failed to protect the privacy of Internet users, the Federal Trade Commission recommended a broad framework for commercial use of Web consumer data, including a simple and universal ‘do not track’ mechanism that would essentially give consumers the type of control they gained over marketers with the national ‘do not call’ registry,” said an article in the New York Times in 2010.

Thing is, telemarketers weren’t paying anyone’s phone bills but their own. To most of us, they were an intrusive annoyance.

Online advertising, on the other hand, pays for the content so many of us consume.

The Internet Advertising Bureau has a sub-membership called the Long-Tail Alliance of more than 500 publishers with fewer than 10 employees and revenue of less than $1 million a year. According to the IAB, they get most of their revenue from ad networks.

Here is a list of them.

If a do-not-track mechanism ever takes hold, these small publishers will take a similar hit to that which the telemarketing industry took after the do-not-call registry went live.

They aren’t calling us at dinner. They aren’t intruding into our lives.

They’re simply trying to offer content people want but won’t pay for while helping merchants reach people unobtrusively with deals on stuff they’re likely to buy.

The only similarities between do not call and do not track are the first two words.

Somehow, we need to help consumers understand the difference so privacy zealots can’t use the success of do not call to wrong-headedly push for the implementation of do not track.

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Terms: Feel free to be as big a jerk as you want, but don't attack anyone other than me personally. And don't criticize people or companies other than me anonymously. Got something crappy to say? Say it under your real name. Anonymous potshots and personal attacks aimed at me, however, are fine.

Posted by: Ken Magill
Date: 2012-11-29 12:05:03
Subject: Relevance

Hey Phil: Thanks for the comment. If the ads are less relevant, media buyers will spend their money elsewhere. (My wife is a media buyer). As a result, there will be less revenue for small publishers who rely on the success of behaviorally targeted ads. If do-not-track takes hold, a lot of small publishers are in trouble.
Posted by: Phil
Date: 2012-11-29 10:34:42
Subject:

DNT is not going to have the same effect as DNC. DNC actually stopped some of the calls. As I understand it DNT isn't going to stop the ads, it's just going to make them less relevant which means the ads will be even more annoying.

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