Even if targeted online advertising is not prohibited, note which way the wind is blowing

“Surveillance” is a loaded term, but it’s on the lips of regulators trying to restrict online targeted advertising on both sides of the Atlantic.

On Tuesday, Democratic lawmakers in the United States led by Representative Anna Eshoo (D-CA), introduced the Banning Surveillance Advertising Act (BSAA), which would outright ban advertisers from targeting ads to consumers with a few exceptions, including contextual targeting or large-scale geo-targeting.

This isn’t Eshoo’s first rodeo. Eshoo, which represents California’s 18th congressional district – the heart of Silicon Valley – was also a co-sponsor of the Online Privacy Act, a now-blocked bill introduced in 2019 that would require explicit consent to disclose or sell personal information and created GDPR-inspired User Data Rights.

Unsurprisingly, the advertising industry is not a fan of the BSAA. “This terrible bill would disenfranchise companies that advertise on the Internet,” said IAB CEO David Cohen. said in a press release).

Meanwhile, in Brussels late Wednesday, EU lawmakers voted to support amendments that would significantly restrict behavioral advertising under the Digital Services Act (DSA), a bill aimed at tackling harmful content online and making platforms liable for algorithmic distribution.

IAB Europe argues that the DSA could undermine existing consumer laws, including the General Data Protection Regulation, largely because it overlaps them.

But in the United States, while federal privacy legislation is unlikely to pass this year, the Surveillance Advertising Ban Act could be another not-so-childish step toward a possible national law on the protection of privacy. The question is, how strict will this law be when it finally arrives?

We surveyed the industry: the headwinds seem to be blowing, but is it even practical – or technically feasible – to ban targeted advertising altogether?

  • Alison Pepperexecutive vice president of government relations, 4A
  • Lartease TiffithExecutive Vice President of Public Policy, IAB
  • Stephanie VandenbergSVP of Revenue, Verve Group
  • Stephanie KlimazewskiSVP of Marketing, Aki Technologies
  • Michele SzabocsikVice President of Marketing, BlueConic

Alison Pepper, Executive Vice President of Government Relations, 4A

The surveillance advertising ban law appears to follow a parallel path to the recent petition to the Federal Trade Commission to begin regulating surveillance advertising. In fact, Accountable Tech [the advocacy group that authored the FTC petition] is also a leading supporter of the legislation.

The difference between the petition to the FTC, which is currently seeking public comments, and the proposed legislation appears to be that it gives very specific definitions of targeted advertising. Interestingly, the legislative title calls it “surveillance” advertising, but the actual definitions in the text default to the more pedestrian “targeted” advertising.

Definitions are important because they are broad. The legislation provides that an advertiser cannot “target the delivery of an advertisement” and the definition of “target” includes not only bans on individual targeting, but also “a group of individuals”. This definition would likely render many of the current industry-developed privacy solutions moot.

Lartease Tiffith, Executive Vice President, Public Policy, IAB

The question is not whether it is technically feasible. It is absolutely impossible and, if adopted, would make it illegal to use data for advertising purposes. This would take direct marketing back a century and digital marketing back to the early 1990s.

The IAB actively educates and lobbies in Washington, DC on many issues, including privacy and the responsible use of data for advertising purposes. We are working squarely to ensure that the unintended consequences of bad legislation do not materialize.

National privacy reform has taken precedence over other issues in DC and, as we know, individual states are moving forward with their own privacy laws. The cost and complexity of compliance, if not mitigated, will significantly hamper the thousands of small and medium businesses that depend on data-driven advertising for their livelihood. This can’t go on – we need a federal privacy law.

Stephanie Vandenberg, SVP of Revenue, Verve Group

We have seen many bills introduced in this area over the years. Few of them have even been submitted for review by the committee.

This could be another example of all barking and no actual biting. As with others we’ve seen, this bill takes a sledgehammer to a job better suited to a carver’s tool. The bottom line is that we should allow consumers to make informed choices, like GDPR as it has evolved. Let’s say it’s not well thought out.

Stephanie Klimazewski, Senior Vice President of Marketing, Aki Technologies

This bill is very, very broad and unlikely to pass in its current form. Additionally, this bill in its current form does not prohibit targeting based on the content a user is viewing or the large metropolitan area where an ad is served.

That said, to answer the question more directly, it is possible to [ban targeted advertising]. This would be very similar to how digital advertising was delivered in the early 2000s – primarily IP-based location targeting and content-based targeting that a user views as a proxy for their interests and demographics.

So, it’s entirely possible, but it would also completely upend the dominance of data-driven players like Facebook and Google. This could be a great way to break duopoly dominance.

Michele Szabocsik, Vice President of Marketing, BlueConic

The BSAA may rightly be rooted in rising consumer expectations for privacy and an increasingly unpleasant browsing experience due to ad overload. But this is an excessive and broad approach to solving the problem. Unlike the GDPR, which requires companies to obtain explicit consent in order to use an individual’s personal data for advertising purposes, this legislation intends to prohibit it altogether.

A more balanced legislative approach would force advertisers, publishers and ad-tech companies to clean up their actions. This means requiring advertisers and publishers to do three things: be transparent about how they use the data they collect, explicitly ask for permission to use it, and deliver ad experiences that actually deliver value to the consumer.

The next generation of consumers – Gen Zers – care about corporate social responsibility, but they’re also tech-savvy. They understand that when companies actually deliver on their promise of value in exchange for data, consumers benefit. But they also rightly want transparency and control over the data exchanged.

When companies are held accountable to these higher standards of trust and transparency, it’s a win-win situation for consumers and businesses.

Responses have been slightly edited and condensed.