FCC: Targeted Advertising Is Good For America...Sometimes

by Steve Smith, Jun 17, 2011, 4:00 PM

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Here is one worth noting. In the massive new report on the media economy released last week, the Federal Communications Commission recommends that targeted advertising may actually have positive social, cultural and political benefits. In fact, the FCC argues that the U.S. government itself could be an important buyer of this inventory. For those who haven't seen the material first hand, here is some direct reference. For those reading along at home, this comes on page 352 of a 360 page pile, and can be found here online. 

It comes at the end of a long section warning about the pressures on local media companies to maintain vigilant reporting on politics and institutions because of their struggling business models. We'll get back to that piece shortly. But let's cut to the chase. Let me quote directly and at length from this final section of recommendations for future policy. 

"Another important advertising-related policy issue is privacy. Regulators and consumers have an extremely legitimate concern that targeted advertising might invade the privacy of Internet users. However, ad targeting, since it commands higher prices, offers one possible way for local content creators to build sustainable business models that can help finance local journalism. When considering privacy rule, the policymakers should therefore also consider the positive benefits of ad targeting for local news and journalism operations." Emphasis is the FCC's, by the way.

There you have it. Ad targeting could be good for the body politic by helping to underwrite journalism that keeps governments and politicians honest. Or at least that is my reading of the argument. The conclusion of the report starts with a dire warning about the state of content. "We face a broad crisis of 'the news' or 'content' - but something much more specific: a shortage of local, professional accountability reporting." While the FCC says outright it is not the role of government to "save journalism" by direct funding, it does recommend making conditions favorable to creating sustainable business models for "full-time accountability reporting." The FCC warns that local corruption and mismanagement may go undetected and under-reported unless the ecosystem supports robust independent reporting. There may be some intimation here about the journalistic value of emerging hyper-local news models.  

There are a number of proposals in the FCC report for solidifying local journalism and supporting new local media models, including making government data itself more accessible to citizens, changing tax policies (including no imposition of an "advertising tax") and reducing the current burden of paper recordkeeping on the part of local TV stations. But the most striking proposal of all to me involves the government actually redirecting more of its own media buying to local markets. According to the FCC, even as far back as 2005 the government was spending $1 billion a year on advertising. Apparently local news outlets have suggested the government can help the cause of maintaining institutional accountability through reporting by spending on local markets. "We agree," the report says. "Targeting existing federal advertising spending to local news media could help local news media models -- both commercial and nonprofit, online and off-line -- gain traction and help create local jobs, while potentially making taxpayer spending more cost-effective."

At least for the sake of advancing the general public good, the government is not only ready to support the idea of ad targeting, but even buy some well-targeted inventory.    

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