Microsoft has recently launched its Internet Explorer 10 with a full-on media blitz. Implementing a multi-channel approach that includes not only digital advertising, but print and television as well (somewhat uncommon for a new browser), Microsoft has invested the upfront capital in an attempt to grow market share for its IE browser, which has seen its usage numbers drop to competitors like Google Chrome and Firefox over the past year. The release of IE10 marks an interesting landmark in the history of web browsing; for the first time ever, a major browser has been released with the “Do Not Track” setting turned on by default. By making it the default setting, advertisers will no longer be able to track consumers’ online behavior unless users intentionally opt in to the tracking feature.
The concept of behavioral targeted advertising originated in 1999, but didn’t gain popularity until 2003. The release of IE 10, and its automatic restriction of consumer behavior tracking, has spurred fear into advertisers as this default setting will inherently lead to less effective advertising and, thus, will damage the online experience of the consumer.
Although the majority of consumers (68%) report that they dislike having their behavior tracked and analyzed, the effectiveness and click-through statistics tell a different tale. Several case studies have shown an exponential increase in click-through rates when advertisements are based upon previously registered behavior. For example, Microsoft itself conducted some research on the subject in 2009, and found a staggering 670% increase in click-through rates. Conversion rates were also higher compared to randomly assigned advertisements. In 2009, the average conversion rate was 6.8% for behavioral targeting and only 2.8% for run of network advertising. As behaviorally targeted advertisements more directly align with the needs of the consumer, they’re perceived as less irritating and more suggestive, making the online experience more user-friendly and efficient. Here’s why:
1. Consumers are busy as ever
Nowadays, consumers are accessing the web on more than one device. 13.3% of total Internet pages are viewed on a mobile device or tablet and because browsing the web no longer requires sitting behind a desk, people no longer dedicate their entire attention to what they are surfing on the web. Instead, they are surfing while watching TV, listening to music or walking down the street! This combination of connectivity makes it easy for consumers to forget their previous searches. Throughout the day, consumers are confronted with a plethora of advertisements, some of which prompt a “let’s Google it” action. But chances are they may not remember these searches by the time they get home. Yet, through behavior tracking, advertisers can remind the consumer about these forgotten thoughts, potentially mitigating the risk of the consumer missing out on something they wanted.
2. Discovering the unknown
In the same way that Google has an algorithm to offer the best pages that match a search query by taking into account factors such as PageRank and proximity, advertisers can use behavior tracking to offer the consumer related products that they might not have known, or even thought about, yet. Consumers usually have a good grasp of their needs, but these are often the most basic or urgent ones. While online shoppers may not be in the market for a new sweater at this very moment, that knowledge is power. By allowing browsers to customize advertisements based on previous search history and activity, the user is presented with an advertisement that may in fact interest them. At the end of the day, the ad space remains the same, the banner ad will be filled with something, why not have it be something that aligns with the previous search history and profile?
3. Data has been gathered for years. What changed?
One of the main concerns of behavior targeted advertising is the privacy of the browser. 59% of online adults say they notice being targeted by advertisements that are related to things they recently searched. And as stated earlier, 68% don’t like it. This privacy concern has only recently garnered more attention. In 2011 Senator Kerry and Senator McCain introduced the Commercial Privacy Bill of Rights Act of 2011, which gives Americans the right to decide how their information is collected, used, and distributed. Tracking was never an issue when it involved loyalty cards and credit card purchasing habits, but as more data is being tracked, people have become more cognizant of this tactic that companies have employed for decades. The fact of the matter is that companies will always collect consumer data. It’s just that they are now making that data back available to consumers, thus providing a more tailored, bespoke and efficient shopping experience.
Consumers have choices, and if they do not feel comfortable providing companies and browsers with their data, there have been technologies in place for years that allow for this data accumulation to be turned off. With that said, making “Do Not Track” a default setting is no solution. Instead, we must educate consumers on what traffic is being tracked and empower them to decide. Otherwise, an online shopper unaware of this new default setting will have a less pleasant and personalized Internet browsing experience.