Will The FCC's Revised Net Neutrality Proposal Kill The Online Ad Industry?

Marketers know page views are part of Google's search algorithm, and bounce rates somehow affect organic results. It takes a fraction of a millisecond to identify an audience segment and serve an ad on a publisher's site.

Google, Bing, Yahoo and a countless number of other companies supporting the online advertising space want to provide Internet users with a positive experience. If someone clicks on a Web site and it loads slowly, chances are they will bounce off to the next site.

The bounce counts negatively against the site, along with the slow load time, when it comes to organic search rankings. It took years to build the online advertising industry, but the Federal Communications Commission now wants to throw another wrench in the process.

The FCC voted 3 to 2 on a proposal last week that would ban Internet Service Providers from slowing the traffic of all Web sites, but would have the option to make deals for faster access. Net neutrality opponents believe Internet service providers should not have an option to give preference to a Web site by changing the speed at which consumers can access its content, but speed dramatically affects the online advertising industry from search to video to display and programmatic buying.

The decision to serve an ad is made in a fraction of a millisecond. Pieces of Web pages load at different times. Code sends signals to serve up Web pages or a bid for an ad unit on a specific publisher's site. Not having the required packet or signal speeds would slow the process of ad serving, making programmatic buying and selling nearly impossible.

Self-proclaimed tech geek Brandon Schakola, group director of earned media at The Search Agency, said the FCC's proposal could fracture the way the Web works and create a larger black box in which to guess how to budget advertising dollars. Display targeting and retargeting become more complicated because many companies participate in the serving or targeting of one ad unit. "You end up with a fractured demographic," he said. "It affects time-based content like the type that serves up on a mobile device."

Some industry executives lack the basic knowledge of the technology driving Internet advertising, and it seems that many have not fully considered the costs that will affect delivery and budgets. The FCC proposal could mean cost per acquisition and cost per impression would rise depending on the network the ads get served through. It's very possible that not all networks would pay the same price to deliver ads.

If the FCC's proposed rules go through, this would create a fast lane allowing companies like Comcast, AT&T, Verizon and others to charge additional fees to companies like Netflix to stream movies. Businesses and consumers would pay for Internet service as well as priority access. For a real estate site now depending on video to preview homes for sale or rent, this could become a huge issue to support content delivery networks that serve up images and video, or load balancing servers that aim to assure content streams without buffering.

Schakola believes if the FCC's proposal passes it will affect page speed, ranking, assets, data delivery services from advertising networks like the Google Display Network, search quality scores, and overall advertising budgets.

The FCC is taking comments. July 15 is the deadline for the first round. A second round of reply comments - where you can address some of the issues people bring up in the first round will run until Sept. 10.

"Pipes" photo from Shutterstock.


2 comments about "Will The FCC's Revised Net Neutrality Proposal Kill The Online Ad Industry?".
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  1. Dave Kalata from Consumer, May 23, 2014 at 5:37 p.m.

    This should be something that Google has a very high interest in analyzing.

  2. Elisabeth Gleckler from Tulane University, May 27, 2014 at 12:34 p.m.

    Can't slow it down, but it can be offered faster.
    Let's think about that for a moment.

    Our internet speed is not good - Latvia and the Czech Republic are faster than the US. It is a utility and should be regulated and managed as a common good, not a consumer product. Kudos to Lafayette, LA and other small cities for taking charge and providing access to their citizens.

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