Marketers express hope for a more pro-business FCC under Ajit Pai
Marketers are welcoming the appointment of new Federal Communications Commission chairman Ajit Pai, who took over from Tom Wheeler last week.
The Association of National Advertisers (ANA) and the American Association of Advertising Agencies (4As) expressed hope that Pai will overturn many of the sweeping privacy rules that were enacted by the agency under his predecessor Tom Wheeler, which limited data gathering, use and sharing by internet service providers like Verizon and Comcast.
“The ANA has been particularly concerned about the privacy rules that were approved and is optimistic that he will re-examine those rules,” said Dan Jaffe, group evp of government relations at the ANA. “It is a necessary step for the benefit of both businesses and consumers.”
Another point of discontent has been the net neutrality decision, which codified the idea that all internet traffic should be treated equal. The decision by the former FCC forbade internet service providers from unfairly blocking or slowing web traffic.
“We are in support of reversing the net neutrality rules completely and believe that Pai will approach the issue sensibly,” said Peter Kosmala, svp of government relations at the 4As. “We believe that the broadband privacy rules were a regulatory overreach and also detrimental to the interests of publishers and advertisers since they severely restricted what the ISPs could do with data.”
These marketing trade groups have consistently opposed the regulation and, as a case in point, slammed a privacy vote that was passed in October. The vote required that these providers obtain consumers’ consent before sharing and using their web browsing and app history data for ad targeting and marketing. While it most severely impacted internet service providers, it also affected marketers, who rely on consumers’ digital data for ad targeting and building consumer profiles.
Pai, for his part, has denounced the FCC order for reclassifying internet service providers as utilities and is likely to advance business-friendly, free-market policies. This has obvious positives, said Greg March, CEO of Noble People, including that it will reduce the number of players that need to be vetted and streamlined to an ad measurement standard. It will also be an incentive for large media distributors like Verizon and Comcast to invest in innovation, as their profit opportunity increases with deregulation.
But there are several downsides, too. Deregulation will not only reduce competition and give advantages to the larger ISPs but also risk scaring off consumers, who may have privacy concerns.
“As big media distributors force higher prices from content holders like cable channels and Hulu, for example, the smaller ones will have less opportunity grow audience,” March said. “That will limit innovation from the scrappier part of the market — and with less pressure from that side of the market, perhaps the ways media buyers can reach customers might not grow as much.”
It’s also important to not lose sight of consumers, said Rob Griffin, chief innovation officer at Connelly Partners. While the opportunity to use data and target audiences may seem enticing, marketers must exercise restraint.
“Marketers need to take a proactive stance on digital governance and not go chasing the shiny object, or they risk losing consumers,” he said. “They must follow where their ads are running, how many tags are on their sites, use the data right and not come off as creepy in their targeting.”
For Azher Ahmed, evp and director of digital at DDB, Pai’s best path forward is a moderate one.
“It makes sense to adopt a moderate stance, instead of completely backing off from net neutrality,” he said. “Or else, it’ll scare consumers away.”
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