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Congress appears more likely than at any point in the last decade to pass legislation furtherregulating the collection and use of consumer data on the Internet as well as on otherinteractive media, such as mobile phones and cable television. While such data can significantly
improve the relevancy of advertising to consumers’ interests, advocates of data regula
argue that such data collection and use violates users’ privacy. Moreover, some critics argue
that targeted advertising is inherently invasive or manipulative. Unfortunately, as politicalsupport grows in Washington for
baseline federal privacy regulation,
what leading onlineadvertising analyst David Hallerman has called a
[c]oncurrent economic,societal and technological trends
threatens to ravage advertising and ad-supported media.
Inshort, regulation may restrict the evolution of online advertising at a crucial time in itsdevelopment, stymieing the transition of traditional media to the digital age and the growth of new online content and services.The importance of Internet advertising goes far beyond corporate bottom lines. Whileadvertising is itself an important channel for non-commercial speech, it has also long been the
of media in America, funding the speech of others since the birth of ad-supported newspapers in the colonial era.
Like print, radio and television ads, Internetadvertising supports a wide array of online media, but unlike traditional media the Internetallows anyone who can set up a website to earn ad revenue
if they can draw traffic. Thus,advertising supports not only traditional content publishers, but also a staggering
of millions of publishers of niche and minority-oriented text, audio and video content, and a widevariety of Internet services, including software that was traditionally sold at high prices.
Hallerman notes that total U.S. advertising revenue declined 0.7% in 2007 and 3.6% in 2008
the first recorded two year decline in the U.S. since tracking began in 1940. He predicts thatoverall ad spending will fall another 8.2% in 2009 and 3.0% in 2010, while growing only 0.4% in2011, 1% in 2012, and 0.6% in 2013
a total drop of 12.4% by 2013.
In the first half of 2009,
1. For a discussion of the criticism of targeted advertising,
Berin Szoka & Adam Thierer, TheProgress & Freedom Foundation,
Targeted Online Advertising: What’s the Harm & Where Are We Heading?
Online Advertising & User Privacy: Principles to Guidethe Debate
US Advertising Spending: The New Reality
Now You See 'Em...
, SmartMoney.com, June 15, 2000,
The Long Tail:
Why the Future of Business is Selling Less of More
(Hyperion2006); Chris Anderson,
The Long Tail