Despite 83 per cent of Americans supporting net neutrality maintaining the status quo, the Federal Communications Commission (FCC) has undone the 2015 rules that prevented internet providers from using a tiered/paid system to block or slow specific websites.
Now, because of this, advertisers, marketers and publishers need to brace themselves for a bumpy 2018. Yes, even those working in London’s adland. The world is increasingly interconnected and this will be a good example of how local regulatory changes have impact far beyond geographical borders.
We can expect changes to hit like a freight train. While US internet service providers (ISPs) will have to be transparent with the public about blocking, throttling and prioritisation along with limitations on apps or devices, they will in effect be given the freedom to decide what people can access. We’re going to see a lengthy legal dog fight as net neutrality advocates attempt to revert to the previous status quo. The first legal action launched the day after the repeal vote.
AC/DC sang about ‘moneytalk’ and we’re about to see a lot more of it. With ISPs having the power to block or affect access to specific media outlets or apply premium pricing to access content, they will likely introduce fast lanes where websites can pay more to have their traffic prioritised. Like a toll road, those who can afford to pay will arrive at their destination quicker.
The implications for advertising, media and marketing are vast. US Consumers are likely to switch to ad blockers to save data usage, and this could force publishers to shut down higher-bandwidth ads, impacting brand advertisers.
While only one in five Americans currently use ad blocking, we can expect these rates to hurtle upwards, causing headaches for publishers and advertisers alike.
Audience targeting is also likely to be a challenge for marketers as the map of the American internet is reworked. Consumers will be redistributed across a tiered system of fast and slow lanes, making it more difficult to target them.
With ISPs’ power to charge more for specific content and websites, sites that require heavy bandwidth usage and fast connection speed, those distributing video content especially, will take a big hit. Of course, this will have consequences for video advertising, which will likely be de-prioritised by advertisers and publishers alike.
Operating costs are likely to skyrocket for independent media owners as they will have to pay more to ensure users can access their content. As a knock-on effect advertising costs will increase, with costs getting passed down the advertising supply chain. While heavyweights like Google and Facebook can bear increasing charges, many small publishers are likely to go to the wall.
As prices rocket for advertisers, and video campaigns in particular feel the heat, the impact will not be restricted to the US. The web is global and we all know campaigns often are too, so this will affect marketers working for UK/EU brands with digital ads displayed worldwide. It will effectively cost marketers a lot more to reach the same audiences they reach today. UK and EU CMOs will have to carefully consider how their brands use digital advertising, and need to anticipate increased costs and ad blocker usage. Creative teams will find their toy boxes limited, having to find a way around bandwidth-heavy formats and reverting to less exciting, less popular options like banners.
The biggest impact on the UK is on brands wanting American consumers to buy, read or view their products, services or content. They will especially be on the hook now because the telcos that control the toll roads will know they have to have that audience and will make advertisers pay for it.
This is not just a throwback to the years before the net neutrality rules came into force. We’re talking about a return to the 90s (remember slow dial-up speeds?), with internet providers trying hard to keep people on their portals, offering content and applications affiliated with specific telcos. ISPs will prioritise their own affiliated content and slow down traffic other websites. This is to their own benefit as most US ISPs have big stakes in publishing companies. Fast speeds, coupled with sticky content, influence consumers to dwell, so these portals will become increasingly vital as a channel for advertisers.
Looking ahead, I don’t doubt that those of us affected will innovate to meet the forthcoming challenges. It’s a rocky road ahead: marketers and agencies need to anticipate rapidly increasing ad prices and plan accordingly.
Andy Vogel is global head of digital products at NewBase.