How Advertising is Going To Be Affected By the Net Neutrality Decision

Net Neutrality

"Net Neutrality" implies equal access to broadband and content.  Proposed rules would require that ISPs (Internet service providers) treat all internet traffic --- even that of competitors – equally.   And, the proposed rules would prevent IDPs from blocking content. It would also provide broadband provides a framework that would enable them to establish and charge for “fast land” access to consumers.

In realistic terms, most businesses and brands may view this as a fight for streaming video services to take on with cable television and telecom companies.  But this can hit them in the bottom line.

The cost of advertising is likely to rise under proposed Net Neutrality rules.  Advertising makes it possible for websites like Search Engine Watch and countless others to publish content that is “free” for readers to consume and share.  But pricing will go up for access from a marketing perspective in terms of CPMs.  A multi-tiered system could redistribute audiences, and make it more difficult to target them on TV or digital platforms.

While this technological battle truly affects everyone who uses the Internet, digital marketing agencies can be caught directly in the cross fire between the Federal Communications Commission and internet service providers.

It's easily assumed that marketing budgets increase with the size and success of a business. Entrepreneurs may have very little money allocated toward marketing while multi-billion dollar companies have entire teams dedicated to the task. Because of this inequality, the larger firms are at an advantage to pay for "fast lane" streaming speeds.

Small businesses that have a history and an existing customer base will probably feel challenged, but not helpless. However, the inequality will create a large barrier to entry for new companies who need advertising revenue to stay afloat. Start-up companies and technology firms have begun campaigns against the FCC. Advertising may no longer be a lucrative profit-building strategy for small companies and there will likely be a switch to subscription-based revenue.

Another factor to consider for digital marketing analysts is the current importance of SEO and Google AdWords, according to Cyber Alert. With net neutrality, websites are ranked based on content, keyword usage, and semantic linking. If certain advertisers have the ability to reach more consumers using financial power, content strength becomes less relevant. The best content in the world can't generate business if it's trickling toward customers in comparison to advertisements gushing from larger companies.

Ultimately, the cost of premium service for fast-track delivery will shift to digital advertising firms. Businesses will be paying more to keep their websites streaming at maximum speeds, which means those companies can charge firms more to advertise. Additionally, social media websites that operate on a free subscription system will have to pass the fast lane cost to their advertisers.

 

 

 

 

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