WASHINGTON — Digital advertising advocates warned Congress on Wednesday that the actions of two Internet browsers could be hurting small businesses by threatening their low-cost method of advertising.
Companies collect personal data, which allows ad companies to target consumers based on Internet browsing histories.
Digital advertising advocates say tighter data collecting regulations will starve small businesses that rely on the revenue.
Certain Microsoft and Mozilla browsers automatically block these ads unless a customer asks to receive them. Witnesses at a hearing of the Senate Committee on Commerce, Science and Transportation said that blocking these ads starves small websites of their revenue, without alerting the user to that impact.
“It’s a threat to the Internet ecosystem,” said Lou Mastria, managing director of the Digital Advertising Alliance.
Online advertising revenue reached a new high of $36.6 billion in 2012, thanks in part to customized ad experiences made possible by data tracking.
These advertisements often subsidize the expenses of small online businesses with little revenue. Online newspapers, blogs and weather sites that are not self-sustaining often rely on the collection of personal Web-viewing data.
The Digital Advertising Alliance, a non-profit led by the nation’s leading advertising and marketing trade associations, has developed a one-button option to allow a customer to stop the collection of tracking data.
But Sen. Jay Rockefeller, D-W.Va., says that is not enough.
Rockefeller introduced legislation in 2011 that would give users the right to opt out of online tracking, but the bill never passed.
“It’s now April 2013 and consumers are still waiting for these do-not-track standards,” Rockefeller said. “I believe these companies are dragging their feet.”
Rockefeller applauded Microsoft and Mozilla for making “do not track” the default setting on their browsers.
Mastria disagrees with this “technology-blocking tool.”
“These browsers are making the choice, not the consumers,” he said. “Mozilla’s decision to block technologies by certain types of companies will have a significant, adverse impact on the Internet.”
Adam Thierer, senior research fellow at George Mason University, said Mastria is right. “Online advertising is the fuel that powers our online economy,” he told the committee. “Overall quality could suffer if data collection is restricted.”
But Harvey Anderson, representing Mozilla, argued that consumer protection is more important. “The loss of user trust is far more dangerous than the loss of user revenue.”