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FCC Net-Neutrality Rules Could Significant Impact Online Advertising System

By | 06.09.14

FCC Net-Neutrality Rules Could Significant Impact Online Advertising System

The Federal Communications Commission (FCC) is coming closer to setting in place net-neutrality rules that might establish a multi-tiered system of fast and slow lanes. It’s important for small businesses to pay attention to this, as companies like Comcast and Time Warner Cable would be able to charge different prices for the use of their pipes into American homes.

While the net-neutrality debate has thus far focused on companies that provide entertainment or services on the web (such as Google, Facebook, and Netflix), it will have a major impact on marketing strategies that use these forums to communicate with their customers. The multi-tiered system that the FCC is considering would enable Internet service providers (ISPs) to give speedier data delivery to companies that are willing to pay for it, which has the potential to squeeze out small publishers and ad tech firms and will forever change the structure of the online ad and publishing industries.

This might mean, for instance, that it might take a lot longer to load a video ad than the page content around it, depending on who is paying for the better service. In addition, a tiered system could effectively redistribute audiences, making it more difficult to target them whether via online or digital TV platforms.

It’s believed that once this multi-tiered system is implemented, ad serving itself could change. The largest ad players would likely be among the first to foster fast-tracking deals with ISPs, giving them an important edge over smaller ad firms without speedy delivery deals in place. It’s also believed that ISPs will be able to subsidize fast-tracking costs with ads they serve on their system: another important advantage.

A tiered system could also impact the way backend technologies that deliver ads to web pages and phone screens actually work. While the surfeit of ads that clutter the web today already clog up pages, slowing down page load time, this could be complicated when ad systems get preferred status but the content they’re wrapped around doesn’t.

Reference:

Kaye, Kate. “Pay Attention: Net-Neutrality Rules Could Shake Up Online Advertising: Tiered System Would Benefit Big Companies, Possibly Hurt Small Online Ad Firms.” Advertising Age. 6/2/14.

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