Fueled by concerns about privacy, legislation that would limit Websites' ability to track users' browsing history via cookies is currently making its way through the California legislature and the U.S. Congress.
The so-called "Do Not Track" legislation is favored by consumer groups and privacy advocates, but opposed by many online marketers, who fear it may limit their ability to monetize their content and services online. Since this type of data is used to target ads to people based on their history and preferences, some fear that establishing an opt-in-only system could hurt the effectiveness of those ads and, in turn, the revenue they generate. Today, Google became the first browser maker to officially oppose California's version of the law.
Neither bill is close to becoming law, but if passed, how would "Do Not Track" legislation affect small businesses online? This is the question explored recently in an article on Inc's Website. Some small businesses who run advertising-funded Websites are concerned that a "Do No Track" law could cut into their revenue, which smaller operations may be less capable of recovering from.
In particular, cost-per-click (CPC) advertising could take a hit, since those ad units often utilize behavioral targeting to deliver ads that are more relevant and thus, more likely to be clicked.
It's a bit early to tell, since the bills are still being debated and hashed out, but a system under which users have to opt-in to being tracked (rather than opting out), it seems likely that the effectiveness of online ads could be affected. In the meantime, some browser manufacturers have already rolled out their own tracking opt-out options.
While the legislation and the FTC framework that preceded it were born out of legitimate privacy concerns, depending on the final details, there's a chance such a law could hamper the growth of some small businesses.
What do you think about the proposed "Do Not Track" legislation? Should small businesses be concerned?