Even If Targeted Online Advertising Isn’t Banned – Take Note Of Which Way The Wind Is Blowing

“Surveillance” is a loaded term, but it’s on the lips of regulators who are working to restrict targeted advertising online on both sides of the Atlantic.

“Surveillance” is a loaded term, but it’s on the lips of regulators who are working to restrict targeted advertising online on both sides of the Atlantic.

On Tuesday, Democratic lawmakers in the US led by Rep. Anna Eshoo (D-CA), introduced the Banning Surveillance Advertising Act (BSAA), which would outright prohibit advertisers from targeting ads to consumers with a few exceptions, including contextual targeting or broad-based geotargeting.

This isn’t Eshoo’s first rodeo. Eshoo, who represents California’s 18th Congressional District – the heart of Silicon Valley – was also a co-sponsor of the Online Privacy Act, a now-stalled bill introduced in 2019 that would require explicit consent to disclose or sell personal information and would have created GDPR-inspired user data rights.

Unsurprisingly, the ad industry isn’t a fan of the BSAA. (“This terrible bill would disenfranchise businesses that advertise on the Internet,” IAB CEO David Cohen declared in a statement).

Meanwhile, over in Brussels late on Wednesday, European lawmakers voted to support amendments that would greatly restrict behavioral advertising as part of the Digital Services Act (DSA), a piece of proposed legislation looking to tackle harmful content online and make platforms accountable for algorithmic distribution.

IAB Europe argues that the DSA could undermine existing consumer laws, including the General Data Protection Regulation, in large part because it overlaps with them.

But back in the US, although it’s unlikely that a federal privacy law will pass this year, the Banning Surveillance Advertising Act could be another not-so-baby step toward an eventual national privacy law. The question is, how strict will that law be when it finally arrives?

We polled the industry: The headwinds seem to be blowing, but is it even practical – or technically feasible – to outright ban targeted advertising?

  • Alison Pepper, EVP of government relations, 4A’s
  • Lartease Tiffith, EVP of public policy, IAB
  • Stephanie Vandenberg, SVP of revenue, Verve Group
  • Stephanie Klimazewski, SVP of marketing, Aki Technologies
  • Michele Szabocsik, VP of marketing, BlueConic

Alison Pepper, EVP of government relations, 4A’s

The Banning Surveillance Advertising Act seems to be running on a parallel track to the recent petition to the Federal Trade Commission to begin rulemaking on surveillance advertising. In fact, Accountable Tech [the advocacy group that authored the FTC petition] is also one of the primary supporters of the legislation.

The difference between the petition to the FTC, which is currently seeking public comments, and the proposed legislation seems to be that the latter provides very specific definitions of targeted advertising. Interestingly, the legislative title calls it “surveillance” advertising, but the actual definitions in the text default to the more pedestrian “targeted” advertising.

Definitions matter – because these are broad. The legislation provides that an advertiser may not “target the dissemination of an advertisement,” and the definition of “target” includes not just prohibitions on one-to-one targeting but also “a group of individuals.” That definition would probably render moot a lot of the current privacy-protecting solutions being developed by the industry.

Lartease Tiffith, EVP, public policy, IAB

The question isn’t whether it is technically feasible. It’s absolutely impractical and, if passed, would make the use of data for advertising illegal. It would set the direct marketing business back a century and digital marketing back to the early 1990s.

IAB is actively educating and lobbying in Washington, DC, on many issues, including privacy and the responsible use of data for advertising. We’re squarely focused on making sure that the unintended consequences of bad legislation are not realized.

National privacy reform has taken a back seat to other issues in DC and, as we know, individual states are moving forward with their own privacy laws. The compliance cost and complexity if left unabated will significantly hinder the thousands of small and mid-sized businesses that rely upon data-driven advertising for their livelihoods. This cannot continue – we need a federal privacy law.

Stephanie Vandenberg, SVP of revenue, Verve Group

We’ve seen many bills introduced in this area over the years. Few have even made it to committee consideration.

This could be another example of all bark and no actual bite. As with others we’ve seen, this bill takes a sledgehammer to a job better suited for a sculptor’s tool. The bottom line is we should allow consumers to make informed choices, similar to GDPR as it has evolved. Let’s just say it’s not well thought through.

Stephanie Klimazewski, SVP of marketing, Aki Technologies

This bill is very, very broad and unlikely to be passed in its current form. Additionally, this bill in its current form doesn’t prohibit targeting based on the content a user is viewing or the broad metropolitan area where an ad is delivered.

That said, to more directly answer the question, it is possible to [ban targeted advertising]. It would be very similar to how digital advertising was delivered in the early 2000s – primarily IP-based geotargeting and targeting based on the content a user is viewing as a proxy for their interests and demographics.

So, it is completely possible, but it would also completely upend the dominance of data-driven players like Facebook and Google. It could be a great way to break up the duopoly’s dominance.

Michele Szabocsik, VP of marketing, BlueConic

The BSAA may be rightly rooted in rising consumer expectations for privacy and an increasingly unpalatable browsing experience thanks to advertising overload. But it’s an excessive and broad-strokes approach to solving the problem. Unlike GDPR, which requires companies to gain explicit consent in order to use an individual’s personal data for advertising purposes, this legislation intends to outright ban it.

A more balanced legislative approach would put the onus on advertisers, publishers and ad tech companies to clean up their acts. This means requiring advertisers and publishers to do three things: be transparent about how they use the data they collect, explicitly ask for permission to use it and deliver ad experiences that actually provide value to the consumer.

The next generation of consumers – Gen Zers – care about corporate social responsibility, but they are also tech savvy. They understand that when companies actually deliver on their promise of value in exchange for data, consumers benefit. But they also rightfully want transparency and control over what data is exchanged.

When companies are held accountable to these higher standards of trust and transparency, it’s a win-win for consumers and businesses alike.

Answers have been lightly edited and condensed.

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1 Comment

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