The Future of Marketing is Being Decided Right Now

Two bills introduced in Congress last week, one in the House, one in the Senate, may well mark a significant turning point in the history of our economy.  Both of them concern Internet privacy.

The House bill, The Consumer Privacy Protection Act of 2011 (H.R. 1528) introduced by Representatives Cliff Stearns (R-FL) and Jim Matheson (D-UT), requires sites to inform users that information is being collected, to offer certain limited opt-out provisions, and the bill creates the concept of approved self-regulatory programs that companies can join to demonstrate compliance.  The law is administered entirely at the federal level by the FTC.  The Senate bill, The Kerry-McCain Commercial Privacy Bill of Rights Act of 2011 introduced by Senators John Kerry (D-MA) and John McCain (R-AZ) goes considerably farther: all information collection must be opt-out/opt-in, clear notice must be provided that info is being collected and more.  It is administered by partly federally and partly at the state level.

The bi-partisan nature of these bills is a good clue to how politically popular this issue is deemed to be.  The topic of Internet information, data-mining, and the disappearance of privacy is a hot one.

What may not be obvious is that either of these two bills could decide the future path of a significant portion of our economy.

The story until now:

1) 1995-2010 – the birth of the World Wide Web leads to the destruction of the Print/On-Air Advertising system, as audiences drift away from old media. Print/On-Air advertising is the marketing system that created the consumer/industrial juggernaut that was America of the 20th century.

2) 2005-2010 – The internet enterprises that were responsible for this destruction discover that they, too, need a sustainable business model to support their continued production of new media.   The business model they turn to is, not surprisingly, advertising online.

3) 2011–  Online advertising agencies and space brokers announce that hence-forth, advertisers will not need to buy “content” as the carrier for their ads, they can "buy audiences."

So, the business model currently being touted by some of the more knowledgeable people in the online advertising field is that the Internet allows advertisers to find individual consumers, rather than simply talking to whoever comes to a likely site.

That means tracking Internet users, based on their data-mined interests.

And here come Congress, ready to regulate that process, perhaps a little, perhaps to the point of effectively eliminating it.

What neither bill contains – although it is one of the most widely-discussed and popular ideas for protecting internet privacy –  is a Do Not Track List, a grand one stop shopping opt-out-of-everything mechanism.  But as the bills get debated, even that might emerge.

Marshall McLuhan once wrote that the newspaper contains two kinds of news: the bad news is the articles. The good news is the advertising; it is news of the commercial world.

In the networked world, product news itself has become split into two types (at least from the marketer’s point of view): controllable and uncontrollable.  The controllable news is advertising.  The uncontrollable is the vast interconnected communication morass that is currently buzzworded as “social media.”  Congress may limit how the controllable news gets spread or targeted.  The uncontrollable news will, of course, remain uncontrollable.

Congress is about to decide how advertisers may or may not find their potential customers.  That will, in the long run, decide the shape of 21st century commerce, and the future of US companies vs. those that fall under different (national) regulations or no regulations.  It will begin to define the shape of the world to come.

Stay tuned.