Internet Advertising--A Tale of Two Cities

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way--in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received for good or for evil, in the superlative degree of comparison only."--Charles Dickens, 1858

There is much ado about Internet advertising these days.

In New York, the epicenter of the advertising world, interactive advertising is ascendant. Internet advertising has grown from $6 billion in 2002 to nearly $13 billion this year, according to research firm, eMarketer. Google's dominance in Web search and the expectation that it will reach $9.5 billion in ad revenue by 2006 has legitimized the mad migration of ad dollars to the online space.

Predictions by Veronis Suhler that Internet advertising will grow at an average of 24 percent a year over the next five years, compared with 7 percent for the advertising industry overall, add credibility, and perhaps rationality, to the exuberance. Plus, recent maneuvers by Microsoft, AOL and Yahoo to improve their place in the space suggest that the big players have figured things out and are increasingly significant to advertisers.

It seems that in the business world, companies are readily improving technology and techniques to reach consumers more efficiently. That is, after all, what the digital space delivers. As more Americans come to engage media online, marketers invariably have followed.

The tale in Washington is different; policymakers seem to see the world through a set of Dickensian lenses. As earnestly as marketers seek to expand the uses of interactive technologies, Congress is seeking ways to contain them.

Don't misunderstand. It's not that the government wants to do away with Internet advertising altogether. But in its sincere attempt to protect consumers from abusive behavior, government could just go too far.

In a recent meeting with Senate staff, a group of advertisng experts led by the American Association of Advertising Agencies (4-As), Association of National Advertisers (ANA) and the American Advertising Federation (AAF) made that point. In seeking to set the record straight on spyware and adware, their message was, "you can regulate conduct, but leave technology alone."

Norm Lehouillier, Managing Director of Grey Interactive told Senate staff that "when used ethically, adware and other forms of behavioral marketing can offer benefits to consumers and marketers. Unfortunately, like so many Internet technologies, there are bad guys who use the same technologies to deceive."

Mike Donahue, Exec VP at the 4-As reminded them that "reputable ad agencies working on behalf of major companies would be loath to abuse adware. Not only is it not smart business, but it's against industry guidelines which are spelled out in our Terms and Conditions for online advertising." 4-As Washington chief Dick O'Brien added: "We're the good guys. The culprits deploying spyware are not on Madison Avenue--they're taking shelter somewhere in Kazakhstan."

Nick Pahade, Managing Director at Beyond Interactive pointed out that "policies that protect and educate the consumer should not hurt marketers out there that use technology to create opportunity and efficiencies. The attention should be on prosecuting those who are taking advantage of emerging technologies for the wrong reasons."

Following the recent markup of the Burns-Boxer, SPYBLOCK bill by the Senate Commerce Committee, these admonitions should be well-received. The bill now appears to have the buy-in of most industry groups involved in internet marketing or advertising.

Perhaps the biggest paradox in the legislative effort is what Internet security expert Greg Blair of Blair Dubilier points out: "While computer exploits will continue as long as there are computers, we have seen a significant decrease in hijacked browsers and computers compromised by undesired and undesirable software during 2005. We believe this is due to improved security within browsers, better anti-threat software and most importantly increased user awareness of the techniques used by those seeking to install unwanted applications."

The Internet space is so dynamic that the online practices Congress is regulating against today, will soon become, if they have not become already, things that have gone by the wayside for a variety of reasons. There already has been a measurable decline in the type of spyware that seems to be at the heart of the Congressional effort, and the good guys (reputable advertisers and agencies) are simply not involved.

So as Washington continues to search for ways to protect Americans from Web abuses, marketers in New York and beyond are searching for ways to make abuses of Web technology unproductive, unprofitable and one day, perhaps, obsolete.

It is the best of times, it is the worst of times.

(c) 2005 Adonis Hoffman