In the News (Week of June 2, 2014)

The debate on the pros and cons of Net Neutrality is far from dead (though many agree that it has become mind-numbing). Internet service providers (ISP) want the ability to charge Web site operators, application providers and device manufacturers different prices for speed and ease of access to the network. The discussion so far has primarily centered on web service companies, but in a recent AdAge article Kate Kaye points to Net Neutrality’s potential effects on online advertising.

If the Federal Communications Commission allows for the tiered system proposed by the ISPs, it could negatively impact the ad industry. According to Kaye:

“Small publishers and small ad tech firms could fall prey to large firms able to pay for fast-tracking. Digital audiences and ad inventory could be redistributed. Publisher revenue models could shift towards more ad-subsidization or more subscription offerings.”

Another interesting point Kaye raises centers on audience distribution. In the newly tiered system, audiences would be redistributed—creating another complicated facet of targeting. Targeted ad inventory could become more difficult to pinpoint, online or through digital TV. And, the cost for targeting these audiences could change, as fast lane ads could be priced higher.

If the FCC decides to permit ISPs to charge for faster access, the online world as we know it will no longer exist and the ad tech industry will need to adjust or get lost in the dust.