“The report of my death was an exaggeration”

While Mark Twain was talking about his own death, there is another reported death that I am thinking about.  Back in January 2009 I included a quote about banner ads being the next direct mail.  I mean no offense to direct mail but the implication was that the value of a banner ad was diminishing.  The belief was that banner ads were being replaced by social media, which is a disruptive technology much in the same way that e-mail marketing has replaced direct mail in many industries and situations.  Direct mail still is a valuable channel but it is being used more selectively than it once was.

Well reports of the death of the banner ad might be premature.  A recent study by eMarketer predicts that banner ad spending in 2010 will be up 8.2%.

US Online Ad Spend Growth by Format (% Change)
Format 2009 2010 2011 2012 2013 2014
Video 38.6% 48.1 42.7 43.4 34.7 33.0
Search 1.4 15.7 8.6 10.1 5.9 7.0
Banner ads 3.8 8.2 6.7 11.8 7.7 4.8
Lead generation
5.5 6.6 8.4 7.0
Sponsorships -1.0 4.9 5.0 5.6 5.9 6.3
Rich Media -8.3 4.7 3.5 4.7 3.0 3.1
Email -27.9 -5.4 4.4 7.9 2.4 3.6
Classifieds -29.0 -13.1 -8.3 3.6 2.2 3.0
Total -3.4 10.8 8.4 12.1 8.9 9.3
Source: eMarketer, May 2010

Privacy and Cookies

With the recent Facebook fiasco, privacy is yet again coming to the forefront of users’ minds.  As Scott McNealy said, “You already have zero privacy – get over it”.  And yet, we hope that that is not true.

On my personal laptop I restrict third party cookies and am selective about the sites from which I accept first party cookies. I accept first party cookies when I perceive that there is a benefit to doing so.  Because I don’t see the benefit in third party cookies, I never accept them.

I am willing to trade privacy when I am receiving a valuable service in return. Thus, I accept cookies from Amazon because of the perceived value to me — the ease in ordering, the suggestions for additional purchases, and the ability to add to my wish list. However, I decline first party cookies from a running website that requires cookies. The website serves up running routes in my area but I don’t value this service. Yet, the website will not function unless cookies are enabled. It frustrates me whenever I forget this fact and try to measure the distance I ran. As a result, I typically go to this site once or twice a year by mistake. By restricting access, the website is trading off brand awareness in the hopes of better measurement and personalization of content. I personally don’t think the trade-off is worth it.

I believe that users should have the ability to turn off and on cookies as they wish. Further, there needs to be more education about cookies and about a user’s digital footprint in general, particularly with the advent of behavioral targeting. I have provided a link to a Wikipedia page but perhaps an example would be best. Companies can use data from your cookies to serve up targeted ads. Providing you with ads that are targeted to your needs and preferences sounds great. But what if those ads are wrong because you share a computer with someone else for example? For some this could be annoying but for others it may be offensive. There is also the question of who has access to that data and how long it will exist. Further, what if your digital footprint is combined with your off-line behavior?

Personally, I think that advertising companies, in particular, should be required to ask for permission to use your data for behavioral targeting purposes similar to opt-in requirements for e-mail marketing. Best practices calls for consumers to be considered opt-outs for e-mail communication unless they expressly opt-in. Requiring the same for behavioral targeting will encourage advertisers to educate users in the hopes of increasing opt-in rates. In the US, the Federal Trade Commission (FTC) is advocating self-regulation but I think they should push for express consent by users. Most users don’t read privacy notices and those that do find that they are usually full of legal jargon making them difficult to understand. There’s a report from the FTC called Protecting Consumers in the Next Tech-ade: A Report by the Staff of the Federal Trade Commission from March 2008 in case you want to read more about it