In the last few blog postings I've been discussing various aspects of the Do Not Track (DNT) issue and third party tracking online in general. I think it would be interesting to take a look at this issue from the perspective where third party tracking was to go away immediately. One can only postulate what the impact may be but I think it is worth a discussion.
To set the scene let's assume that the pressures of the EU directive on privacy, the do not track debate, and third party tracking for purposes of delivering relevant advertising has led to 50% of online browsers having DNT enabled. Here are a few potential outcomes:
Small publishers perish Thousands of small publishers immediately cease to have a viable business model. This is unfortunate but I don't hear anyone crying about the loss of thousands of video rental stores either. Sometimes business models change, some survive and some don't.
Google. Stock tanks.
Lumascape landslide. Many of the data and service companies on the display advertising Lumascape crumble, are absorbed by others, or simply cease to have a viable business.
Ad technology investment. In conjunction to unraveling of the existing display advertising lumascape, there is an increased level of investment and opportunity in the ad technology space.
Premium publishers rejoice. For years the premium publisher has been trying to fight off pressures of declining CPMs, loss revenue, data leakage and third parties marginalizing their audience. The time and investment into curating content, building audience and audience based insights starts to pay off. These publishers know the most on a first party basis who their audience is, are able to mine the data, provide real insights and deliver services to both advertisers and viewers.
Tracking becomes more valuable. As the availability of individuals tracked online declines dramatically, the shortage in supply makes them much more valuable to advertisers looking to get relevant ads in front of individuals. CPMs of targeted ads increases as a result.
In all cases, a primary point is that online advertising ad dollars probably will not diminish or disappear. While there may be a bit of a stall while things re-adjust, dollars will continue to flow, though the flow path may shift from time to time. Isn't this what should happen in the markets?