Marketers Fear the FCC’s Plan to Kill Net Neutrality Could Increase Advertising Prices
Costs could also go up and competition decrease
Yesterday, the FCC unveiled its plan to totally dismantle Obama-era rules that require internet service providers to treat web traffic equally. The proposal—which the agency will vote on next month—would allow companies like Verizon, Comcast and AT&T to block or at least slow web traffic.
While many platforms and internet rights advocates agree that ending net neutrality could hurt consumers, marketers say brands have a lot to worry about as well.
According to Joshua Lowcock, U.S. evp and chief digital and innovation officer at UM, said brands should be concerned. He said the FCC’s proposal could affect everything from advertising prices and viewablity standards to innovation and competition.
“It’s going to fundamentally change the way (marketers) can approach digital media, the ROI they can extract for it and even what partners they should be looking to and considering,” he said.
This could play out in a number of ways. Lowcock said brands might have to start paying a premium for quality bandwidth or be pressured to go with one media company owned by an ISP versus another that isn’t.
For example, in an environment where net neutrality is absent, an ad being served on a website might not load at a reasonable speed for a consumer, prompting them to skip ahead and therefore messing up a campaign’s metrics.
Lowcock isn’t the only one concerned with a world without net neutrality. Barry Lowenthal, president of MediaKitchen Inc., said the internet is a “national treasure” that should be protected.
“It’s sort of like without roads, we wouldn’t have commerce or the expansion that we have today,” he said. “There’s a reason why people don’t own the highways for the most part, and I think it’s the same for the internet.”
With user experience and online accessibility a top priority for many brands, creating a barrier where some larger brands can afford top speeds and others can’t could create even more barriers for challenger brands or startups to compete. In one hypothetical example, Lowenthal said he could imagine Walmart underwriting a person’s internet if they do their shopping there for the week.
“User experience is brand marketing, and speed is a big component of user experience,” he said. “When you start to mess with user experience, you’re really going to create barriers for brands to compete.”
According to Mozilla CMO Jascha Kaykas-Wolff, an open internet allows “a Goliath to compete with a David and a David to compete with a Goliath,” explaining that with the open internet, the best idea often wins. However, ending net neutrality would be more of a win for ISPs than for smaller brands or companies.
Kaykas-Wolff said ending net neutrality would make it much harder for marketers to find new users, and that the FCC’s proposal should give marketers “a lot to be concerned about.”
“Without net neutrality, creators and brands could struggle to reach new users and investment to ideas will struggle and dry up over time,” he said. “Then the internet might start to look more like cable TV.”
While many agency execs say they think it will be harmful to them, their clients and consumers, some were reluctant to speak publicly against the proposal because they have both ISP and brand clients.
“Clients should be outraged, and some of them are, at the prospect of ISPs as toll booths limiting access to a free and open internet,” one exec at a major media buying agency said. “It’s one thing to complain about a duopoly of Facebook and Google dominating digital dollars, but this action has the effect of strengthening them while adding to cost and complexity and reducing choice and information. ISPs win, but consumers, advertisers and agencies all lose out.”
On Tuesday, many of the large tech companies—Facebook, Google, Twitter, Reddit, Netflix, etc.—took to their own (and other) platforms to voice concerns over the FCC’s proposed plan. As the debate heats up over the coming weeks, experts say to keep an eye on how—if at all—brands respond in the way they did during previous net neutrality debates.
Lowenthal said he hopes CEOs will begin to take a stand like many have done in the political space this past year in ways they maybe haven’t before. While it might be uncomfortable, he said, it’s helped some find their voice.
“I hope that those same brands will venture into this space and recognize that protecting the internet for the public good is a moral imperative,” he said.
