Net Neutrality and What it Means For Online Advertising
Net Neutrality is a critical issue that is making headlines these days because of a proposal to the FCC that would allow internet providers to charge content companies extra fees to deliver content faster to consumers.
Currently, with net neutrality, all data is treated equally no matter who creates it, making the internet a level playing field for businesses, new and small, to advertise and interact with potential customers at the same costs and speed as larger, established companies with more money.
So what does this mean for online advertising? The impact could be dramatic. On one side, this will allow advertisers to know even more about their customers and their needs, purchasing power and internet preferences. As individuals or companies pay more for internet services, they may be targeted differently based on their type of service. Advertisers and agencies will have new elements to target their ads, including features segmentation based on the different tiers of service available in the market. Publishers that have preferential access will also gain a better positioning in the online marketplace, as they can now charge premiums for advertising placed in their high-speed, high-end properties.
But on the other side, the assumption is that the majority of people who today access the internet at reasonable speeds, will be now placed in lower tier services, probably with slow speeds and limited access. What has been and is today a huge open market, probably the biggest appeal of the internet for advertising, will dramatically change. Advertising might not be as effective or bearable for users that have to deal with slower sites. At least some forms of online advertising like the takeovers or pop-up ads that could slow down the site performance, could become a thing of the past. As a result of this, slower internet speeds could deter people from spending as much time online which would have a negative effect on advertising.
The reason that online advertising is so effective is that the internet is accessible to everyone. Allowing certain internet providers the ability to control access and speed gives them too much power and changes the rules of the marketplace. As in many other things in life, those with the power will reap the benefits of the new rules, while the vast majority will lose!