BUSINESS-WEB DESIGN, SEO, SELF IMPROVEMENT, PROSPECTING, CLOSING, TRAINING, LEADS

Homeland Security’s Crackdown on Websites Trafficking Counterfeit Goods Raises Alarms – FoxNews.com.

FTC’s “Do Not Track” Initiative Portends Major Impact on Online Advertising

The Federal Trade Commission’s (FTC) publication earlier this month of a proposed framework for protecting online privacy portends a major impact on online advertising. If your website’s business model depends on advertising revenue, either directly from the site itself or via a smart, mobile device, you have a big stake in the outcome of the dialogue kicked off by the FTC report.

The FTC report suggests implementation of a Do Not Track mechanism – similar conceptually to the current Do Not Call list regarding annoying telemarketing calls – that would enable consumers to block the collection of online browsing data. Do Not Track, if implemented, will dramatically change the rules of the road regarding Internet advertising – with a potentially huge impact on relatively smaller websites that publish free content supported by behavioral ads.
The Target – Behavioral Advertising

Behavioral ads are targeted to a user’s browsing history, thereby increasing relevancy – and dramatically increasing conversions to sales. Behavioral ads are based on anonymous data collected on how a user’s computer browses the Internet, including websites visited, searches made, and content read. This data is used to create a behavioral profile that is linked to a specific demographic. The result is that the ads seen by the computer’s user are tailored to the user’s interests. Many industry advertising executives believe that the overwhelming success of behavioral ads is a significant factor in the growth of the Internet commercially.

Behavioral ads should be distinguished from contextual ads that are based solely on the content of the specific website page the user is viewing. Because contextual ads are generally not as relevant to the user’s interests as behavioral ads, contextual ads are less effective, and therefore less profitable.

Behavioral advertising is a big FTC concern regarding consumer privacy. Although behavioral data is essentially anonymous when collected, privacy advocates are concerned about where new data collection technology and methodology may take us. For example, the amount and depth of some data could lead to personal identification of users. In addition, even if users are not personally identified, the enhanced data about them could rise to the level of an invasion of privacy.
How Would Do Not Track Work?

Although it’s unknown at this time exactly how Do Not Track will work, one approach could involve a list similar to the Do Not Call list for telemarketers.

Another, more likely approach, would be for Web browsers to provide a built-in option for a persistent setting that would enable consumers to choose whether to allow or block the collection of behavioral data and behavioral ads. Users would have the ability to turn this option on an off. While on, the user would be able to surf the Web in a mode sort of like stealth mode.
Who Would be Affected by “Do Not Track”?

The effect of Do Not Track on ad-serving websites would be to lower revenues based behavioral ads. Relatively large websites that publish premium content would likely not be affected significantly by Do Not Track because the vast majority of their ad space is typically sold directly to marketers which may be able to rely successfully on contextual ads. This would not be true for smaller websites that typically rely more heavily on ad networks to place their ads. For this reason, smaller websites which publish free content supported by behavioral ads could face a significant impact on revenue from Do Not Call.

For consumers, Do Not Track could dramatically affect the quantity and quality of content they see on the Web. This is due to the fact that much of the free content on the Web is supported by ad revenue. Consumers operating in stealth mode would likely see limited or reduced content, plus ads would not be as relevant.
Conclusion

Some legal commentators question whether the FTC has the authority to unilaterally implement Do Not Track regulations. They argue that Congress must give them that authority. If Congress must act, it may be that the political appeal for Do Not Track would not be as strong as Do Not Call. Many consumers understand the benefits of behavioral ads, and they may believe that behavioral ads are much less intrusive than unwelcome and annoying calls at dinner time by telemarketers.

In any event, the stakes are high for all websites that depend on adverting for revenues. The FTC has requested public comments on their framework report by January 31, 2011, for a final report later in 2011.

If you may be significantly affected by Do Not Track, it’s recommended that you strongly consider providing your comments before the deadline passes.

Copyright © 2010 Chip Cooper

This article is provided for educational and informative purposes only. This information does not constitute legal advice, and should not be construed as such.

WANT TO USE THIS ARTICLE IN YOUR EZINE OR WEBSITE? You may, as long as you reprint the article in its entirety with live links and include this blurb with it:

Leading Internet, IP and software lawyer Chip Cooper has automated the process of drafting Website Legal Forms. Use his free online tool – Website Documents Determinator – to determine which documents your website really needs for FTC website forms and website legal compliance. Discover how quick, easy, and cost-effective it is to draft your website contracts at http://www.digicontracts.com/

The Federal Communications Commission (FCC) is poised to add the Internet to its portfolio of regulated industries. The agency’s chairman, Julius Genachowski, announced Wednesday that he circulated draft rules he says will “preserve the freedom and openness of the Internet.” No statement could better reflect the gulf between the rhetoric and the reality of Obama administration policies.

With a straight face, Mr. Genachowski suggested that government red tape will increase the “freedom” of online services that have flourished because bureaucratic busybodies have been blocked from tinkering with the Web. Ordinarily, it would be appropriate at this point to supply an example from the proposed regulations illustrating the problem. Mr. Genachowski’s draft document has over 550 footnotes and is stamped “non-public, for internal use only” to ensure nobody outside the agency sees it until the rules are approved in a scheduled Dec. 21 vote. So much for “openness.”

The issue of “net neutrality” is nothing new, but the increasing popularity of online movie streaming services like Netflix have highlighted an area of potential concern. When someone watches a film over the Internet, especially in high definition, the maximum available capacity of the user’s connection is used. Think, for example, of the problems that would arise at the water works if everyone decided to turn on their faucets and take a shower simultaneously. Internet providers are beginning to see the same strain on their networks.

In some cases, heavy use of this sort slows the Web experience for everyone sharing the same lines. That has prompted some cable Internet providers to consider either charging the heavy users more or limiting access to the “problematic” services. Of course, if cinema buffs find themselves cut off from their favorite service, they’re going to be mad. If companies don’t act, they’re just as likely to find irate customers who don’t want their experience bogged down by others.

It’s not clear why the FCC thinks it needs to intervene in a situation with obvious market solutions. Companies that impose draconian tolls or block services will lose customers. Existing laws already offer a number of protections against anti-competitive behavior, but it’s not clear under what law Mr. Genachowski thinks he can stick his nose into the businesses that comprise the Internet. The FCC regulates broadcast television and radio because the government granted each station exclusive access to a slice of the airwaves. Likewise when Ma Bell accepted a monopoly deal from Uncle Sam, it came with regulatory strings attached.

No such rationale applies online, especially because bipartisan majorities in Congress have insisted on maintaining a hands-off policy. A federal appeals court confirmed this in April by striking down the FCC’s last attempt in this arena. “That was sort of like the quarterback being sacked for a 20-yard loss,” FCC Commissioner Robert M. McDowell told The Washington Times. “And now the team is about to run the exact same play. … In order for the FCC to do this, it needs for Congress to give it explicit statutory authority to do so.”

Freedom and openness should continue to be the governing principles of the Internet. That’s why Mr. Genachowski’s proposal should be rejected and Congress should make it even more clear that the FCC should stop trying to expand its regulatory empire.

via EDITORIAL: Wave goodbye to Internet freedom – Washington Times.