It was bound to happen. When an online flurry of complaints over behavioral targeting stoked by articles such as What They Know by The Wall Street Journal failed to morph into political currency, the Federal Communications Commission is now conceding via a new report that perhaps data-driven marketing is an elemental part of the digital economy, especially at the local level, and should be shepherded, not strangled.
Last year, the FCC and the Federal Trade Commission set up a joint task force to look at ways to coordinate enforcement of online and mobile data privacy, focusing on online and mobile behavioral tracking. According to the FCC’s The Changing Media Landscape in the Broadband Age, the FCC now wants to emphasize that it recognizes that “advertising is, and always will be a crucial part of media business models.” The report also states that the FCC believes that any government plans to clamp down on locally-targeted advertising, such as plans to tax advertising to fund public media, would make it “harder for commercial and nonprofit media entities to create sustainable business models.”
Citing a “crisis” of a lack of high quality, professional local content, the FCC stated that “gaps created by the contraction of newspapers have — so far — not been fully filled by other media.” To do so, a healthy advertising industry would be essential for the support of content producers seeking to reach audiences at the local and hyperlocal levels, the FCC said.
“Ad targeting, since it commands higher prices, offers one possible way for local content creators to build sustainable business models that can help finance local journalism,” read the report. “When considering privacy rules, policymakers should therefore also consider the positive benefits of ad targeting for local news and journalism operations”.
The report, which concluded that there must be a balance between privacy concerns and the fostering of advertising and media innovation, may be a sign that the FCC believes that globally government-led anti-targeting polics — such as the EU directives and even the unpopular anti-tracking browser-plug ins have failed.
“The media landscape is evolving so rapidly that heavy-handed regulatory intervention dictating media company behavior could backfire, distorting markets in unhelpful ways,” according to the report.