Will Advanced TV Force Innovation In Law And Regulation?

On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by Andy Dale, VP, legal and data protection officer at dataxu.

My grandfather was a real-life “mad man.” During the “creative revolution” of the 1960s, he built copy and art teams at Doner Advertising, handling feisty regional and national accounts such as Colt 45 malt liquor, Ball Park Franks and Tootsie Roll.

My father joined him in the 1970s running creative for accounts like Vlasic pickles, Chiquita bananas and Arby’s. In my father’s day, the focus was all about the creative. The media-buying teams served as a function driven by the creative – get the good work seen and heard.

Everything changed with the internet in the late ’90s. Over time, emphasis on the creative message – the copy and art – was displaced by CPMs, retargeting and metrics. But now, we’re in a creative rebirth of sorts thanks to advanced TV and video.

While not an ad-agency veteran like my family members, I joined the business from another angle: legal. Working in a space that connects me to my lineage has given me perspective to see the convergence of old and new worlds in the advanced TV space. I think a lot about how this convergence will be impacted by the law and regulation. From my vantage point, it’s clear that we’re also in a time of innovation in the law and regulation in this area: a legal/media/privacy/creative revolution.

TV is the single fastest medium of innovation in the digital advertising space. Gone are the days of only a few networks dominating the lineup; connected TV now brings the digital experience to any show, at any time and on any device. And broadcasters, networks and content producers are on board: The amount of available high-quality inventory has skyrocketed in the last 18 months.

To meet these new TV needs, tech companies are solving challenging problems like scale and attribution rapidly, and the law and regulation cannot keep pace. We have to try to apply existing laws and frameworks, which can be hard when we’re dealing with increasingly flexible technology.

The Video Privacy Protection Act (VPPA) is one example of an existing law being applied to advanced TV technology. VPPA and the use of TV viewing data is the subject of a class-action lawsuit and was the subject of a Federal Trade Commission (FTC) enforcement action, both of which targeted Vizio.

So far, VPPA and the FTC have required that the use of TV viewing data for advertising purposes requires affirmative express consent, where a user must take an action to effectuate agreement and understand that choice. This differs from the opt-out regime of traditional digital where a user can opt out via the AdChoices icon or according to company privacy policies. We’ll have to wait for the conclusion of the class action to see how courts view VPPA and consent and, ultimately, how the market will react.

We don’t yet have industry groups aligned on a self-regulatory regime for advanced TV and advertising.  The Network Advertising Initiative aims to release some guidance by the end of this year, but such guidance will face significant hurdles. The most challenging aspect will be convincing the TV media world that digital advertising rules apply to them.

It’s a hard barrier to crack. There has been a clear delineation between the enforcement ground of the FTC and the Federal Communications Commission (FCC). Historically, the FTC has regulated advertising via Section 5 of the FTC Act. Reed Freeman, WilmerHale’s co-chair of the cybersecurity, privacy and communications practice, thinks that the FTC will fight to retain this enforcement ground.

“Going forward, across administrations,” he told me, “the FTC will push hard to retain its jurisdiction over that form of advertising.”

I agree with Reed, but the FCC did announce enhanced ISP privacy rules that were eventually pulled back as the administrations changed over. I can easily envision a scenario where if the administrations were to change over again, ISP privacy rules might go back on the table, creating conflict between the regulatory lines between the FCC and FTC. As the lines between TV, ISPs and media blur, I think we will all be re-evaluating this space over the near term.

An additional challenge is the General Data Protection Regulation (GDPR), which takes effect in May. The GDPR definition of “personal data” includes a tracking data category that require affirmative express consent for processing. But we don’t have concrete guidance in the US on tracking data tied to user viewing behavior data. The EU approach may well inform the regulatory approach in the US.

It’s an exciting time to be here, pushing technology forward. There’s no doubt the industry will continue to relentlessly invent, evolve and morph. It will be fascinating to see how the law and self-regulation try to keep pace. Stay tuned.

Follow Andy Dale (@andydale23), dataxu (@dataxu) and AdExchanger (@adexchanger) on Twitter.

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