House Digital Advertising Hearing to Focus on Industry Trends, Consumer Impact
Given the dramatic shift toward digital data gathering practices for advertisers, Congress should prioritize transparency and privacy for consumers, members of the House Digital Commerce Committee told us before a Thursday hearing (see 1806080032). “You’re seeing massive change out there in what’s going on. We’re seeing the way people are getting their information is changing, and it’s an ever-changing process,” said Chairman Bob Latta, R-Ohio. “It’s really getting that information [on data practices] out there so people can understand what it is.”
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Rep. Leonard Lance, R-N.J., wants to make sure digital advertising is as transparent as possible: “That’s my primary objective.” Rep. Gene Green, D-Texas, said consumers deserve as much information with digital ads as they get from TV and other media: “I would like to see if there’s ways we can also make sure that when you have those [digital ads], it actually has some background to it, so if you’re buying something you know what you’re getting.” Rep. Yvette Clarke, D-N.Y., regarded the hearing as an information-gathering session, saying digital privacy continues to be a major concern. “Of course we’d be concerned with folks being bombarded with advertisements based on the knowledge the analytics provides to advertisers about consumers,” she said. “I want to delve deeper into this.”
Scheduled to testify are George Washington University Strategic Management and Public Policy professor Howard Beales, Wunderman Global Chief Privacy Officer Rachel Glasser, Trustworthy Accountability Group CEO Mike Zaneis and Consumers Union Director-Privacy and Technology Policy Justin Brookman.
Beales, former FTC Consumer Protection Bureau director, said in his prepared remarks that internet content is a “public good,” and the value of advertising “depends critically” on information about the likely audience. Ad prices are about three times higher when information is available about the audience. “Impairing the flow of information would significantly reduce the revenues available to support internet content, an impact that would be particularly problematic for smaller publishers,” he said. Ads benefit consumers by creating competitive markets with lower prices, better products and narrower differences among demographic groups, he argued.
Glasser’s organization is owned by multinational data analytics and marketing company KBMG, which gathers data to spur engagement across digital devices. Data is central to the internet’s success, she said in her prepared text arguing all companies rely on data to improve consumer experience. “Relevant advertising links people with the right products and services and perhaps most importantly supports a previously unimaginable array of free products and services.”
Zaneis’ organization is an industry group that combats criminal activity and self regulates throughout the digital ad supply chain, concerning malware attacks, ad-supported piracy and ad fraud. He called digital advertising “one of the key drivers” of the American economy, noting trends toward mobile devices and video content. Digital advertising makes up 6 percent of the U.S. gross domestic product, he said.
Lawmakers will explore online ad technologies, platforms and business models, said a majority-staff hearing memo. Other topics will include: the value of information sharing for digital ads and the role of consumer data for ad-targeting; concerns about automated ad-targeting; economic benefits and harms to consumers regarding data gathering; and industry self-regulatory policies.