The Department of Justice and Federal Trade Commission are in the process of writing new chapters in the history book of digital advertising—the DOJ with its ongoing interrogation of antitrust practices at Google and the FTC with its new (and highly critical) report regarding the data privacy practices among social media platforms and other walled gardens. While these storylines focus on distinct players and problems within the digital ecosystem, they are united by a common thread: They both have vast implications for the future of targeted online advertising and the health of the free and open web.
The reality is this: The future of the digital information economy is in peril, but the biggest threats to a healthy online ecosystem for consumers aren’t the ones being widely discussed. As matters of fairness and privacy take center stage, the digital advertising industry and the regulators trying to wrangle it need to be having a more nuanced discussion. Overly restrictive policies that limit ad relevance—and, thus, the ability for credible news and entertainment sources to monetize their content—jeopardize a free and informed society. Fair competition and equitable systems for advertisers, publishers, and platforms are essential to fostering innovation and serving consumers.
As a matter of course today, regulators tend to ask whether proposed digital ad industry changes and regulations go far enough in protecting competition and consumer privacy. Those are important questions—but not the most important question.
Here’s what regulators (and the advertising industry at large) should be asking instead: Will the changes we’re proposing create a better internet—and through it, a better world—for consumers?
The Path Forward—or Backward?
As fairness- and privacy-focused shifts continue to reshape the digital landscape, the real question is whether the digital ecosystem will move forward or backward. The lens used when answering this question should be that of the everyday consumer looking to access online services and information.
A majority of Americans, across income brackets, believe that advertising should be the largest source of funding for news organizations. Only about one in four Americans say they’ve ever paid directly for news, with Americans making more than $150,000 a year being the only group to show notable willingness (47 percent) to pay for a subscription or article access. In other words, most Americans are getting their news for free—and believe that’s the way it should stay.
So, what does a stronger internet look like for consumers? Everyone agrees that it’s one where personal information is safeguarded and consumers are protected from malicious online activity. But that should be considered table stakes—and consumers deserve more. What a better and more sustainable internet really looks like is one where consumer privacy is safeguarded and consumers have improved access to reliable, accurate information and relevant, welcome ad experiences. This is not only desirable; it’s critical to having an informed citizenry in a healthy and thriving democracy.
This future is within reach. But to bring it to fruition, publishers’ best interests must be considered alongside consumer interests. The two are intricately linked.
Current Publisher Headwinds (and Their Consequences)
The current reality of the digital economy has been challenging for publishers on a number of levels, and the toll manifests in what can feel like a never-ending cavalcade of newsroom layoff announcements. Such struggles are unsurprising when considering how much today’s publishers invest in creating original, high-quality journalistic content, only to have anticipated ad revenues siphoned off by third-party platforms like Meta and Google, which have fallen into the role of news distributors. Generative AI resulting in reduced search traffic to publishers is the latest concern.
One of the ways publishers have been able to keep afloat in a challenging online ecosystem is by using the data their audiences give them (i.e., first-party data) to serve ads that match people’s interests. Third-party cookies and other consumer tracking technologies have historically allowed them to make money off of this data not only on their own websites but also across the broader internet. The crackdown on certain types of tracking technologies, including third-party cookies, is cutting off previously relied upon ways that publishers monetize their audience relationships.
The fact that Google has handed the decision on tracking over to the consumer rather than taking unilateral browser-level action doesn’t change this. We know this because companies like Apple have allowed people to opt out of mobile device tracking in recent years, and consumers have enthusiastically done so. As a result, publishers are going to have to contend with new gaps in their business models.
At the same time, regulators seem keen on thwarting proposed solutions that could help bridge these gaps in a privacy-safe way. Regulatory challenges to ad industry efforts to maintain addressability in advertising are being championed in the name of privacy, but there are two problems:
- They’re not considering the implications of what the internet will become if reputable publishers are forced out of business.
- They’re neglecting a high degree of willingness among consumers to accept relevant advertising experiences in exchange for free or low-cost content.
If today’s sources of credible news and entertainment are driven out of business by overly restrictive policies designed to limit ad relevance, the online experiences that remain could pose serious challenges to maintaining a free and informed society. At this point, the dangers of social media echo chambers when it comes to news and opinions are well documented, and a world without reputable online publishers would thrust more power into such echo chambers. At the same time, as AI news generation and aggregation becomes more commonplace, the underlying sources of information will become even more obscured within the black boxes of these algorithm-driven platforms.
Freedom and Fairness Moving Forward
For the internet to be free, it needs to be fair. Its underlying systems must work equitably for advertisers, publishers, and platforms. After all, fair competition fosters innovation, ultimately benefiting the consumer.
Today, programmatic advertising is the backbone of monetization for content creators and online publishers. It helps ensure content is free and accessible by providing a sustainable revenue stream to those creating the content consumers want and need. For this reason, legal and regulatory systems need to factor in the health of the programmatic advertising ecosystem when making decisions designed to protect competition and consumers.
Antitrust and consumer privacy initiatives and legislation will move forward. Whether or not they help to create a better internet for consumers will hinge on whether they enable today’s premium publishers to sustain themselves by monetizing the information that consumers willingly provide.
Everyone wants to help create a better internet for the future—regulators, publishers, and ad tech firms alike. But to do so, fairness must be prioritized and the chants of “privacy at all costs” must be tempered by thoughtful consideration of exactly what those costs will be—and whether consumers will ultimately be stuck with the tab.
