Three US lawmakers have tabled a new bill that would ban targeted advertising according to all but broad location data, and therefore tilting the market toward contextual methods – with similar sentiments brewing across the Atlantic, is it time to consider how this would change the industry?
Why it matters
A blunt ban on the use of data would not only hit the business models of the companies that have built their fortunes on targeting capabilities, it would have a knock-on effect on ad prices and would likely – as many industry groups point out – affect small and medium-sized businesses who rely on these services to keep costs down.
Advertisers would be banned from using third-party data.
It would allow contextual advertising, otherwise known as advertising placed according to the content of the page a user is viewing rather than their own personal profile. There are both high-tech and low-tech ways of buying advertising contextually.
Its enforcement would come through both federal and state regulators, but the initial draft law also includes a relief clause in which civil actions brought and won could see the plaintiff awarded $1,000 for a negligent violation and $5,000 for a knowing violation.
For the moment, discount the fact that the legislation is as yet supported only by its three sponsors – Reps. Anna Eshoo (D-CA), Jan Schakowsky (D-IL), and Sen. Cory Booker (D-NJ) – and would face a wildly difficult passage through congress, given how important targeting is to small businesses that make up the important long tail of platform businesses like Google and Meta.
Yes, there is some political grandstanding, but something similar is happening in Europe as some factions attempt to bring in a blanket ban on data-driven advertising as part of the wide-ranging Digital Services Act. While this is unlikely, elements concerning a ban on targeting minors or allowing people to access full website or service functions even if they refuse consent to targeted advertising are much more likely to move forward.
Would it work? You could put an end to data-driven targeting but it’s unlikely that it would yield an unalloyed good given that it would upend the entire business model of the internet – and the many companies and individuals who make a living from it.
“Surveillance advertising is at the heart of every exploitative online business model that exacerbates manipulation, discrimination, misinformation, extremism, and fundamentally violates people’s privacy in ways they would never choose if given a true choice”– Rep Jan Schakowsky (D-IL), in a statement.