SMALL PUBLISHERS UNITE! YOU HAVE NOTHING TO SAVE BUT YOUR BUSINESS

If you are a Webpublisher earning less than $1 million annually in advertising revenueand with five or fewer employees, you can help save the ad-supportedInternet. I urge you to join the Interactive Advertising Bureau and become part of the small business army we are mobilizing to stop politicians from unfairly and inappropriately regulating digital advertising.

The threat is very real. As I have outlined in previous postings,forces arrayed in Washington and multiple state capitals arespecifically targeting the business infrastructure that enables smallWeb sites to support themselves through advertising sales. Althoughthese advocacy groups have provided no evidence of public harm, theirefforts have resulted in a flurry of regulatory proposals which, ifenacted, would severely hinder the ability of small publishers tosupport themselves with advertising sales, and impair the ability ofsmall businesses to use interactive advertising to market themselves.

Ibelieve these proposals have received little attention from marketers,media and publishers because they have been hidden on legislativecalendars in Albany, Hartford, and Springfield, or been negotiatedbehind closed doors in Washington, away from our ecosystem’s businessleaders. Moreover, because the proposals state that they seek tocontrol “behavioral marketing” or “third party networks” or “onlinepreference marketing,” publishers that do not engage in such practicesor with such practitioners believe they are safe.

But in fact,these proposals are so broad, they will put virtually all interactiveadvertising practices — and even many mainstream marketing practices– under a strict regulatory regime. Business leaders need to startpaying attention now, or the underpinnings of the “free” — which is tosay ad-supported — Internet will come undone.

Consider a bill that has been before the New York State Assembly, which aims to curtail “online preference marketing.” It defines “online preference marketing” as “aprocess used by entities whereby data is typically collected over timeand across web pages to determine or predict consumer characteristicsor preference for use in ad delivery, including the use ofnon-personallyidentifiable information.” But employing non-identifiable data topredict consumer preferences for use in ad delivery is, in fact, thevery definition of advertising research. Were the New York bill to pass, a mainstay of businessdevelopment for 120 years would, for the first time, fall under astrict regulatory regime – forcing small Web publishers and theiradvertisers to incur legal and lobbying expenses they cannot afford,and just for New York State.

Or look carefully at Connecticut General Assembly Bill 5765.It offers the same, sweeping definition of “online preferencemarketing,” and goes on to say that any publisher offering it through a“third-partyadvertising network” must additionally give consumers the opportunityto “opt out” from receiving it. This means consumers, for the firsttime, would be able to force advertisers to stop providing them ads –but only if those ads are relevant to their interests! Presumably,mass-distributed “spam” advertising would still be protected.

The Connecticutbill also would allow consumers to pull non-identifying data theygenerate out of the aggregated databases that are commonly used inmarket research to improve products, services, and marketing. To putthis in perspective, this is the equivalent of allowing you, me, oranyone to demand that a grocer not use our anonymous checkout-counterscanner data to determine when to restock a product.

These state bills have been tabled — for now. But consider the Federal Trade Commission’s recommendationsfor self-regulatory principles for “online behavioral advertising.” TheFTC has been a good partner with the interactive media and marketingindustries, and has encouraged us, for the most part beneficially, todevelop an effective self-regulatory mechanism to guard consumers’legitimate interests in identity protection and data security. Yet eventhe FTC has succumbed to the fear-mongering of anti-business advocacygroups, and HAS offered breathtakingly broad definitions that couldseverely hamper the activities of small publishers and marketers.

TheFTC defines “behavioral advertising” as “the tracking of a consumer’sactivities online,” and would give consumers the right “to choosewhether or not to have their information collected for such a purpose,”apparently even if it is anonymous and non-identifying. Yet one such“tracking activity” is the measurement of Web site audience traffic –the central measure by which advertising prices are established.Another such “tracking activity” is the measurement of advertisingdelivery – the core determinant of whether the publisher gets paid bythe marketer for running its ads! Thus, in its recommendations for theself-regulation of what it calls “behavioral advertising,” thecommission has made suggestions that would break longstanding processesessential for the management of media companies in the U.S.

The most unfortunate aspect of these proposals is that they are utterly unnecessary. The IABand its members vigorously support the principle of consumer controlover their media consumption. Indeed, consumer control is one of thefundamental reasons interactive media have grown so quickly inpopularity. And consumers have all the tools they need to control allforms of data collection in online media and advertising, built intotheir browsers and into security packages, many of them available freeonline.

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