The Repeal of Net Neutrality: More than just your utility bills

Digitas

John Ferraro & Honor Moshay

The Repeal of Net Neutrality: More than just your utility bills

If you somehow made it through the final few months of 2017 without hearing about net neutrality, then consider this a strong suggestion to take a few minutes to brush up on the subject. Since the Federal Communications Commission (FCC) brought the issue back to the forefront in early 2017, the debate over net neutrality has made shockwaves throughout the American public, producing fierce advocacy around the impact of keeping or rolling back regulation that affects users of the Internet (aka, everybody).

Taking one step back, we see far greater potential impacts. While the FCC vote was some time ago, the repeal’s impacts will start to take effect in Q1 2018. Digital advertising is, in many ways, a backbone of the Internet; it allows those who create and publish content a way to generate revenue while keeping that content freely available to the public. Especially as programmatic buying gives smaller publishers in the long tail of the Internet a better chance at snagging some ad revenue of their own, how could changes in net neutrality regulation affect the way digital media is purchased – and by extension, our world?

So wait... What is net neutrality again?

Net Neutrality is a principle that creates a free and open internet for all. Since the Internet’s inception, it was the norm for providers to treat all data equally and practice principles of ‘Network Freedom.’ In 2015 the FCC, codified this practice into law. Under these regulations, ISPs could not charge premiums for certain content, ‘throttle’ competitor sites, or disrupt the user’s online experience in any inequitable way. Using former FCC Chairman Tom Wheeler’s analogy, these “general conduct” rules previously allowed the FCC to act as the “ref on the field,” intervening if ISPs engaged in any conduct deemed to interfere with the ability of the general public to access legal content on the Internet.

Okay, so what happened to it?

On December 14th, with a majority vote of 3-2, the FCC reversed its Obama-era stance of classifying ISPs as telecommunications services. In the view of FCC Chairman, Ajit Pai, and the Trump Administration, rolling back these regulations re-centers the Internet around consumers and their choices and preferences, allowing the free market to take over. To return to Wheeler’s analogy, ISPs are basically playing without a referee on the field, with the rationale that since no net neutrality guidelines were in place prior to 2015, they aren’t necessary today.

Our Take:

As changes in the regulatory landscape play out, advertisers and brands may need to completely revamp their understanding of consumer behavior. However, even now, reactions are mixed. When asked to comment, The Trade Desk seemed unfazed, citing other types of markets: “It’s important to remember that other marketplaces that are subject to manipulation remain healthy – just look at Wall Street. Those who successfully navigate these marketplaces are backed by world-class technology, methodology, and scale.” Google pointed to their lawsuit against the FCC as part of the Internet Association (along with Facebook and Amazon), to preserve net neutrality regulations. Publishers, especially small sites, fear a steeper uphill battle to monetize their ad space and ensure they receive similar treatment to larger sites.

Here are six things brands and marketers must keep in mind moving forward:

- Brands will, more than ever, need to be flexible in the approach they and their agencies take to digital marketing.

- Brands may need to learn to adapt to (and resist) pressure from ISPs and their related companies/subsidiaries to utilize specifics products or services.

- The first priority for any agency is to convey this new reality to its clients in order to manage expectations and ensure alignment on changes in strategy.

- Agencies should expect the need to re-evaluate previous learnings, and even challenge best practices when data no longer supports them.

- Agencies are also responsible for continuing to push partners to be proactive and innovative.

- Brands and agencies need to quickly learn what “the new normal” could be in terms of CPMs, publisher selection, load times, viewability, and ad performance/ROI.

Our focus on data-driven work will be challenged as we re-evaluate this redefined landscape. To us, it is a no-brainer that the Internet and its infrastructure is a constantly evolving entity, intended for equal opportunity to access and disseminate information. However, if those opportunities are affected, then it becomes increasingly critical for us to do our jobs in a way that maintains the effectiveness and integrity of our media buying in a very new digital landscape.

John Ferraro & Honor Moshay

Analysts, Programmatic, GroupeConnect (Guest Contributors)

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