Microsoft’s “Advertising Exchange” for mobile and online: How will it be addressed by its own Do Not Track approach?

Microsoft has received praise for offering in Internet Explorer 9 a “tracking protection” capability that will enable users to import lists of third party sites that would be blocked.  That’s useful, but not enough.  Microsoft engages in extensive behavioral targeting (inc. for mobile) and other interactive ad strategies designed to capture data throughout its global digital advertising service (as does almost everyone else in the online ad business; that’s one reason why so-called “first-party” websites and services require consumer privacy rules). To beome a true leader in the privacy arena, Microsoft should do more.  Take its Microsoft Advertising Exchange, which sells instant access to users in real-time (such as what Google and also many others do).  We want to learn from Microsoft what privacy and consumer protection safeguards it’s developing for the Exchange, which “now supports approximately 8 billion impressions, or transactions, per month.”   Microsoft has been using and has just invested additional funding in AppNexus, which describes itself as “the industry’s most advanced real-time ad platform.”

ClickZ noted that: “In addition to using AppNexus to support real-time bidding on its sites, its ad network, and its exchange, Microsoft has begun supplementing regular ad buys on the Microsoft Media Network with exchange-traded inventory. That extra inventory carries a lot of potential reach, since AppNexus claims to support 4 billion transactions or impressions a day…Additionally, Microsoft has put the pieces in place to create a mobile ad exchange, called Microsoft Advertising Exchange for Mobile.. It will work by allowing Windows Phone 7 app developers to plug into demand from mobile ad networks like Millenial Media, InMobi and MobClix.”

Microsoft should tell the FTC, the EU, Congress and others how it plans to address the privacy issues raised by its Exchange expansion plans.  Last July, Microsoft noted that: “Microsoft is moving aggressively to provide our customers with access to our owned and operated inventory, as well as partner inventory, via our exchange. This move is in addition to our expansion of the Microsoft Media Network, which combined with the exchange, provides a holistic solution for our customers.  In recent weeks we have on-boarded US Windows Live inventory – including Hotmail and Messenger – into our exchange, providing a highly liquid pool of high quality inventory to demand partners on an RTB basis. We have integrated with each of the major DSP’s to ensure that our customers can work with the partner of their choice in accessing inventory.  Moving forward we will make available the rest of our US owned and operated inventory and partner supply. We’re excited about the efficiencies offered by an exchange-enabled ecosystem, and are committed to providing a foundation that enables innovation by allowing third parties to add value in a transparent, trustworthy ecosystem…over the next six months we will be integrating DSP’s into the Atlas Technology Partner Alliance. This will enable Atlas advertisers to seamlessly partner with the DSP of their choice to extend their buys onto RTB exchanges while enjoying all the benefits of campaign tracking and optimization…”  

We will be turning to the online ad exchange system and privacy issues, in the weeks ahead.