C&B Notes

Is Microsoft Attacking Google’s Advertising Moat?

As Microsoft rolls out Windows 8 later this month, the user adoption of the new Internet Explorer 10 could have a significant impact on Google’s advertising moat:

The “do not track” setting shouldn’t be on by default in the update of the browser, the board of the Association of National Advertisers said in a letter to Microsoft Chief Executive Officer Steve Ballmer.  It was signed by top marketing and sales executives at more than three dozen companies, including Coca-Cola Co., Ford Motor Co., Wal-Mart Stores Inc. and American Express Co… “If Microsoft moves forward with this default setting, it will undercut the effectiveness of our members’ advertising and, as a result, drastically damage the online experience by reducing the Internet content and offerings that such advertising supports,” the trade group said in the letter, which was posted on its website.  “This result will harm consumers, hurt competition, and undermine American innovation and leadership in the Internet economy.”

As reflected in this article from Microsoft’s Rik van der Cool, Microsoft’s decision is driven by the desire for increased consumer awareness of and choice around the data they are sharing:

Regardless of the fact that people can easily turn off the DNT setting, and that our industry is still evolving its definition and implementation plans for the DNT signal, Microsoft’s decision to turn on DNT in IE 10 created angst among advertisers and industry associations when it was announced… the fact remains that consumer concerns around privacy and data are not diminishing.  It is our contention that consumers want more visibility into how their data is used and they’re starting to see value in that data — just like marketers have seen for a long time.  This is certainly not an “either-or” situation where either consumers have ultimate control over data or marketers do — both can and should have skin in the game.  But safeguarding privacy is only one piece of a much larger conversation that needs to take place.

Instead of debating whether DNT is “on” or “off,” we should redouble our efforts as an industry and educate consumers about how advertising pays for the free Web experience we all now enjoy; how much richer people’s Web experiences can be if they share their data with trusted partners; and how they can increasingly manage the data they generate.  If nothing else, DNT should serve as an accelerant to something that everyone in the business of digital advertising wants to see: greater consumer understanding of and desire to participate in the value exchange.

Speaking specifically as a member of the digital marketing industry, I strongly believe that by building trust and demonstrating real value — serving ads when they are accretive to the consumer experience and not serving them when they aren’t — consumers will be willing to share more information with marketers and online services.  Consider that digital tools are becoming more consumer-friendly and that people can have an increasingly clear line of sight into the data they generate, better control over how it’s used and share that data with trusted partners.  At Microsoft, we want to continue to enable consumer choice and control, and help brands deliver relevant, engaging, beautiful advertising experiences. This requires a strong bond and trust between the consumer and the brand.

As we enter this age of digital enlightenment, we need a new norm.  No longer should the consumers who generate the data for our industry be left out of the equation.  On the contrary, they should have the option to participate in that part of the business to a greater extent than they ever have before.