Business Software

Internet Ad Group: Pols Should Be Careful With Privacy Rules

The Internet contributes about US$300 billion a year to the U.S. economy, and U.S. lawmakers should be careful about tinkering with the advertising-supported Internet content model in the name of privacy, the Interactive Advertising Bureau (IAB) said.

An IAB-commissioned study by two Harvard University professors, released Wednesday, found that 1.2 million U.S. residents are directly employed in Internet-related jobs, and another 1.9 million U.S. jobs support those Internet workers. IAB released the study Wednesday, as 30 publishers of small Web sites converged on Washington, D.C., to urge U.S. lawmakers to avoid passing legislation that would harm their ad-supported business models.

Chief among those publishers' concern was talk in the U.S. Congress about requiring Web sites to gain opt-in permission from users before tracking their Web habits as a way to deliver personalized advertising to them. Many users wouldn't give the permission, and without offering targeted advertising, many small Web sites could fold, some small publishers said.

Small Web publishers and sellers "are the face of small business" in the U.S. in recent years, said Susan Martin, publisher of Ikeafans.com, a home improvement site.

U.S. Representative Rick Boucher, a Virginia Democrat and chairman of the House Subcommittee on Communications, Technology, and the Internet, has said he plans to introduce legislation this year that would require opt-in permission for Web sites to collect personal data. Several lawmakers and privacy advocates have expressed recent concerns that online advertising networks are collecting too much information about Web users without adequately informing them.

"Individuals need to understand, in a concise way, the full range of data collection and analytical tools [online companies] are using," Jeffrey Chester, executive director of the Center for Digital Democracy, said at a privacy conference last week. "We're not having a debate here solely about data collection. We're having a fundamental debate about human dignity and civil liberties and political freedom."

But IAB members said legislation that would make it more difficult to deliver personalized advertising and content would hurt them. DailyMe.com, a news aggregator, collects personal information as a way to deliver personalized news, said Eduardo Hauser, the site's founder and CEO.

"The news industry has a very significant revenue problem," Hauser said."The revenue problem needs to be resolved through [customer] engagement. Engagement is done through many means, including the ability to recognize your visitors and your readers on a more personal level."

Even requirements that would mandate new ways that Web sites had to report how they collect user data could hurt small Web sites, said John Yaglenski, operator of Interdot.com, a Disney World travel information site. Interdot.com has always prominently posted its privacy policy, he said.

"We clearly disclose what we do and don't do with data," he said. "The industry has voluntarily done this for years without legislation. The concern of small publishers like myself, who earn our living through the Internet, is that the regulation can become onerous to the point where it puts us out of business."

Most Web sites that collect personal data use it appropriately, he added. "While there may be bad apples that misuse that information, probably for every one of them there should be 1,000 that are using it properly and ultimately provide great benefit to the people who visit their sites," Hauser said.

IAB members pointed to the new study, with coauthor John Deighton, a business professor at Harvard, suggesting that nearly all of the business activity online is supported to some extent by advertising. The Internet is also a huge tool for small businesses, he added.

"It's fundamentally a guerilla medium," Deighton said. "It does reward those with deep pockets, established business practices and the power of the entrenched position. It rewards those who can find pockets of passion and connect them to the enterprise."

Several IAB members and their stories are featured on a new Web site, Iamthelongtail.com.

Subscribe to the Daily Downloads Newsletter

Comments