Why Net Neutrality Matters to Advertisers
The FCC announced in December that it was voting to dismantle rules related to net neutrality. The law, which involved a series of regulations preventing internet providers from blocking websites or charging users extra for special content or services, has generated widespread controversy among technology companies, the telecommunications industry and consumers. While this announcement may fall outside the realm of marketing, the changes to net neutrality could have a big impact on advertising as well. Here are three ways the FCC’s announcement could impact advertisers.
Net neutrality could diminish targeting options
The removal of net neutrality could allow the companies providing internet access to give certain sites preferential treatment in terms of the speed or cost it takes to reach consumers. This is a problem because doing so could limit the development of emerging publisher sites, which may not have the same scale to build awareness with consumers. “There’s not going to be a long tail anymore. It’s just going to be a short, fat tail where those who can pay will pay,” said Gigi Sohn, the former senior counselor to previous FCC Chairman Tom Wheeler, in an interview with Ad Age. This will limit advertisers’ options to reach consumers, possibly forcing them to rely on a few big name websites to target customers.
Net neutrality could hold back agency creativity
The internet is the lifeblood of today’s digital creative industry and has thus far been a level playing field for how content is distributed and how new creative talent gets discovered. The ease of building an independent website using a third-party hosting company, for example, has opened the doors for the creative community to discover unknown talent who can assist with ad campaigns. If the preferential treatment we’ve described is put in place, it could make it harder for agencies to tap new talent to develop and share – at a grassroots level – the award-winning, envelope-pushing projects consumers come to expect. That’s bad news for advertisers and for the industry at-large.
Net neutrality could make advertising more costly
Net neutrality could negatively impact the ad industry by enabling the cost of ads to increase. If some digital publishers receive preferred content status, they would likely attract more viewers simply because their websites load faster. This could serve to limit competition by putting smaller sites at a disadvantage and causing a reduction in the supply of ad inventory. Large publishers would then be in a position to charge more for ads. “Opportunities for advertisers are going to become more narrow and more expensive,” said Ferras Vinh, policy counsel for the Open Internet Project at the Center for Democracy and Technology, in an interview with Ad Age.
Today’s open internet offers a range of benefits for consumers, publishers and advertisers alike. It democratizes access to consumers, encourages creativity, and increases competition, all of which help advertisers reach the right consumers at lower costs with more compelling creative executions. That’s why the future of the ad industry will be better off with strong net neutrality protections in place.