Will FTC's 'Do Not Track' Proposal Affect Affiliate Marketing? « Affiliate Marketing Blog by Geno Prussakov

Raven

There has been much talk and worry about the ‘Do Not Track’ legislation proposed by Federal Trade Commission in early December 2010, and now that Google’s Chrome and Mozilla’s Firefox both have plugins/features to block certain types of third party cookies (and we also know that Internet Explorer 9 is gonna have it too) the worry has built up even more.

Over the past two days I’ve spoken with folks in nearly every major affiliate network (namely Commission Junction, LinkShare, Google Affiliate Network, and AvantLink), and none of them could confirm that such brower plugins will have a negative affect on affiliate tracking. The major reason being is that the focus of the ‘Do Not Track’ proposal is actually on very particular type of tracking. Reading the original FTC’s proposal we see that they are looking to establish “a uniform choice mechanism for online behavioral advertising” which would make the practice of personalized behavioral advertising visible and transparent to consumers who are being tracked to be served “targeted advertisements” (pp. 12-13). With this in mind, they propose that consumers should be able to “control the collection and use of their online browsing data”, considered specifically in light of “targeted advertisements” and “behavioral advertising” (p. 14) [underlining mine]. Page 16 continues:

…the Commission supports a more uniform and comprehensive consumer choice mechanism for online behavioral advertising, sometimes referred to as “Do Not Track.” The most practical method of providing uniform choice for online behavioral advertising would likely involve placing a setting similar to a persistent cookie on a consumer’s browser, and conveying that setting to sites that the browser visits, to signal whether or not the consumer wants to be tracked or receive targeted advertisements. [again, emphasis added by me]

In discussing Firefox’s newest “Do Not Track” plugin AvantLink‘s CTO David Clark has confirmed to me that it should not affect their tracking in any way. The focus of the mechanism is just different. It is not affiliate cookies that they’re concerned with, but the behavioral targeting type tracking; and while some affiliate networks do set behavioral type cookies, affiliate tracking isn’t tied to them.

In December of 2010 Lucas Brown of HasOffers wrote:

I don’t think the FTC is really targeting the affiliate marketing industry specifically.  Rather, they are interested in preventing those that control some of the largest distribution channels from mining data and selling it as behavioral user data… The FTC is really more concerned about the abuse of behavioral advertising…

Today an affiliate marketing industry’s veteran, one of the original founders of Commission Junction, and a co-founder of Impact Radius, Todd Crawford told me:

Personally, I am confident that performance advertising will not be impacted by this type of legislation because the companies doing the tracking can limit the data they capture to ensure that they are in compliance.

What do you think?

About Geno Prussakov

CEO & Founder of AM Navigator – an award-winning OPM agency. Founder & Chair of Affiliate Management Days conference. Author of bestselling "A Practical Guide to Affiliate Marketing" (2007) and "Affiliate Program Management: An Hour a Day" (2011), speaker, consultant, and affiliate marketing evangelist.

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14 Responses to “Will FTC’s ‘Do Not Track’ Proposal Affect Affiliate Marketing?”

  1. Thanks for increasing awareness of this Geno! Though I don’t think they are targeting the affiliate marketing industry specifically, I do think any movement toward this type of regulation is bad for the user, the advertiser, and of course the publisher. Please leave comments on the FTC website!

    • Geno says:

      Just dug your comment out of my WP’s “spam” folder (I wonder why it flagged it down as such). Good thing I’m checking it at least once a day — to see if any kosher comments erroneously landed there.

      Could you please elaborate on why exactly you believe this type of regulation “bad for the user, the advertiser, and of course the publisher”, Peter? I have my presuppositions on what you may mean, but I’d love to hear/read your thoughts instead.

      • Not being able to track things like IP addresses, referral urls, time on site, browser type, user agent, and more is certainly a potential problem for affiliate marketing. We use many of these things to identify fraud and evaluate leads and sales. We know how to get around the cookie-tracking issue, but the FTC is proposing that without the user’s consent you can’t hold on to any of that information (cookie or not). Affiliate marketing relies on matching one users action (impression or click) to another of that same user’s actions. This proposal would not allow you to even assign arbitrary transaction IDs to clients to study their behavior (or attribute to a lead). Plus, advertisers want to be able to match the new customers to the actions created by affiliates.

        Regarding the impact on advertisers, publishers and users: Publishers rely on providing targeted users for advertisers. This would not allow them track their users behavior, location, etc. thus rendering their value to the advertiser useless. The reason users are able to receive so much free content on the web is through advertiser support. This is obviously more closely tied to display, but you will see more of the market shifting to performance and thusly impacting our industry more specifically.

        • Geno says:

          Thank you for your take, Peter. While as you have originally mentioned, “they are targeting the affiliate marketing industry specifically”, if a legislation like this passes, it will make work harder for many other digital marketers, not only those on the behavioral targeting side of things. It still doesn’t seem to me that we won’t be able to attribute a sale or a lead (please point me in the right direction if I’m missing something here), but you’re making a lot of valid points there. Thanks again for taking the time to comment.

  2. The PMA with the help of the lawyer group, is drafting a response to the FTC questions they issued, so hopefully we can prove to the FTC that we can self regulate without them stepping in.

  3. Ratna says:

    Interesting to see this. I assume it is more to do with pervasive Targeted Advertising!. This could affect earnings from “Adsense” though!!

    • Geno says:

      True. I remember seeing a header somewhere which went something like this: “The new Do Not Track legislation would kill Google’s earnings”. Exaggeration for sure, but, as you’ve pointed out, Ratna, AdSense targetting could probably be impacted by this.

  4. Hi Geno,

    Let me chime in with a little political perspective. There’s been a lot of speculation as to why the FTC put out this proposal. The most common opinion is they’re doing this to stimulate industry to do a better job at self regulating. Not just the performance marketing industry but ALL of advertising (online and offline). It is definitely a shot at the behavioral side where more and more consumer information is being collected. The FTC is responding to consumer privacy groups.

    In theory, we completely support industry self-regulation, especially where it deals with protecting consumer privacy. It is politically important that regulators and legislators know that our industry takes this stance, and that we’re aligned with other advertising groups (AAAA, IAB, NetChoice, DMA, ERA, etc).

    We’re actually participating in 3 different responses:
    - A general industry response to the Department of Commerce, authored by the DMA and signed by several groups including the PMA.
    - A similar general industry response to the FTC, same author and signers.
    - Very specific detailed response directly from us, focusing on the elements that will impact us.

    Part of the reason the PMA is preparing our own response is to show that we can indeed be supportive and influential in public policy debate. And the other part is to make sure that specific elements in the proposal that are critical to our industry, have very specific responses, relevant to our industry’s perspective. We can’t afford to be an afterthought.

    By looking at the political climate, we realized this isn’t necessarily a heavy handed way for the FTC to shut down the internet (which it would do if you could opt out of cookies, for example). But we have to make sure they don’t make a proposal that has unintended consequences they hadn’t considered.

    Case in point: to opt out of tracking would require a consumer to provide personally identifiable information, into a system that currently doesn’t store that info, we look at unique, anonymous identifiers. So the solution would cause more of a problem than currently exists.

    • Geno says:

      Now this (that it’s being done “to stimulate industry to do a better job at self regulating”) is definitely an interesting perspective. I must admit I haven’t thought of it in this way, and I thank you for putting this comment together, Rebecca.

      And I agree, it can’t be left for “an afterthought” and the concerns that are there have to be expressed before it’s too late.

      Is the PMA’s response gonna be published publicly too?

  5. Tom Wozniak says:

    Great post Geno – and fantastic discussion in the comments. It is definitely an issue we are following closely.

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