10 Things You Need To Know About Regulation

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The Ripple Effect Will Make Waves

1. The regulatory ripple effect of the financial crisis will lead to increased government oversight throughout corporate America. That means you, online advertising. "The regulatory environment is going to change significantly," says Adonis Hoffman, senior vice president and legal counsel of the American Association of Advertising Agencies and adjunct professor of marketing, advertising and public policy at Georgetown University.

2. But Congress might be distracted with other matters first. That doesn't mean you can be complacent. Look at the regulatory priorities from Congress's viewpoint: Is it more important to focus on the financial system so the economy doesn't slide into a depression, or figure out how the advertisers who are using behavioral targeting know which Internet users are worried about losing their hair?

3. Speaking of losing hair: As more attention is paid to privacy, you should get ready to educate, because the amount of misinformation in Washington about online targeting may have you pulling yours out. Many government officials don't know the difference between knowing someone's online behavior, and knowing where they live, how much they make, and most important, what their names are. Mike Zaneis, vice president of public policy at the Interactive Advertising Bureau, says a number of constituencies need to be reached: Congress, the FTC, individual states, even the industry itself.

4. While behavioral targeting has been the focus of much scrutiny in Washington over the past year, the subject may broaden to take in all manner of issues involving what companies know about their consumers, how they use the information and how they gather it in the first place. According to Zaneis, BT may be seen "as a proxy for all data collection."

5. The online advertising industry, of course, would prefer self-regulation. So, while Washington weighs the issues, it's a great time to be proactive. The Network Advertising Initiative, for instance, a self-regulatory group with members from many online advertising networks, has been updating its principles, and organizations such as the IAB and 4As are becoming very active on this front. For its part, the FTC's director of the Bureau of Consumer Protection, Lydia Parnes, testified before Congress in July: "The Commission is cautiously optimistic that the privacy concerns raised by behavioral advertising can be addressed by industry self-regulation," which "affords the flexibility that is needed as business models continue to evolve."

6. Going green will require online to do more than hire Kermit the Frog. The FTC plans to update its guidelines for environmental advertising, commonly called the Green Guides. Those in online should be prepared to provide greater disclosure about green claims because online is free of the time- and space-limitations that constrain other media, according to Dan Jaffe, executive vice president of government relations at the Association of National Advertisers.

7. Look for closer scrutiny of the pusher man. As if listening to 15 seconds of side-effect babble during every 30-second drug-to-consumer commercial weren't enough, look for even more regulation of the category's advertising. Rep. Henry Waxman, D-Calif., who is angling to be chairman of the House Energy and Commerce Committee, once pushed the idea of a moratorium on dtc ads.

8. Even as budgets get slashed throughout the corporate world, "the stakes are so high, I don't think you're going to see slashing of public policy budgets," Zaneis says. Adds Jaffe, "Both [parties] are not opposed to regulation."

9. With so many other issues on its plate, you might think the FTC wouldn't even address mobile marketing. Not so. FTC commissioner Jon Leibowitz has said, "The emerging mobile marketplace raises a host of opportunities, as well as a host of consumer protection challenges."

10. If self-regulation of privacy doesn't turn the tide, and government regulation proves too onerous, move somewhere where no one cares about stuff like this. Like North Korea. Or Guantánamo Bay - while it's still open for guests.

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