Privacy concerns and consumer protection supported legislation in the later part of the Obama administration that limited an ISP's ability to use information gained through internet usage. Last year, the U.S. Senate revisited the issue and overturned FCC privacy rules with a vote of 50–48 along strict party lines. Under existing regulations, ISPs were required to ask permission before sharing any customer's personal data, including browsing history, location information and app usage. The deregulation could have a significant impact on ecommerce and on privacy protection legislation moving forward.
Rationale Behind the Rollback
The argument for deregulating the ISPs is increasing competition. Under existing legislation, websites and apps have an advantage. Google and Facebook, in particular, have successfully leveraged consumer data to place targeted advertisements that improve their ability to sell. By allowing ISPs the ability sell consumer data, legislators believe it would improve competition in online marketing. Ironically, both Google and Facebook lobbied against increased privacy regulations, possibly out of concern for future legislation that would target these digital marketing giants.
What the Changes Mean for Businesses
If the rollback has the intended consequences, it could mean lower-cost advertising and more personalization in advertising for e-tailers. However, there could also be unintended pushback from consumers. The more intrusive advertising becomes, the more likely consumers are to adopt security measures that block ads. What is yet to be determined is whether better targeted ads are believed to be less or more intrusive by consumers.
More Sophisticated Ad-Blockers Add to the Problem
Today's ad-blocking software affects virtually every marketing avenue. Display ads, video ads, even "native" ads and social media ads fall victim to ad blocking. How? The modern ad blocker doesn't worry about the content, it only considers the source. By separating the source of the content on a page, ad blockers can fail to display anything that isn't from the site. So, any personalized ads not installed locally on the site suffer from automatic blocking.
Overcoming the Automatic Ad-Block
Ultimately, changes to legislation making ads more prevalent may level the playing field for the major media sellers, but it may not improve things for the industry as a whole. With that in mind, it is important for businesses to adapt to consumer preferences. Many publishers ask consumers to allow ad displays to avoid the need for subscription charges. In a recent survey, consumers assigned a value of nearly $1,200 per year to an aggregate of online services currently ad-supported. The modern consumer is overwhelmingly in support of an ad-supported internet, so the challenge for today's ecommerce businesses lies in delivering ads that aren't intrusive and appeal to consumers. Consumers are willing to turn off the ad blockers if advertisers are willing to refine messaging and tone down the information overload.