Posted by: Laura Phillips Garner | March 12, 2010

Harvard Professor Proposes Online Advertisers Bill of Rights

A bill of rights for online advertisers would protect them in the uncertain world of cyberspace much like The Bill of Rights, the first 10 amendments of the U.S. Constitution, protects citizens from the tyranny of government.

In the “Wild West” of new media, online advertisers just might cotton to a Harvard University professor’s proposal of a bill of rights to protect them from the increasingly powerful online advertising networks.

Dr. Benjamin Edelman, assistant professor in the Negotiation, Organizations & Markets Unit of the Harvard Business School, has outlined this bill of rights on his Web site, benedelman.org, and in an editorial in the December 2009 issue of the “Journal of Advertising Research.”

Online ad networks originated to help Web site publishers with ad space and advertisers with specific target audiences find each other in the vastness of cyberspace. At first, they brokered remnant ad space and were few. However, online ad networks have become big business, and with more than 300 now online, publishers are starting to fear that they are commoditizing online ad space.

U.S. Internet users viewed 4.3 trillion display ads online in 2009, according to Reston, Va.-based comScore, which provides digital marketing intelligence and measurement. Eight different online ad networks reach at least 75 percent of the U.S. online population. AOL Advertising is the top online network with 91 percent of the audience and 187 million Internet users. Rounding out the top eight are Yahoo! Network, Google Ad Network, ValueClick Networks, Microsoft Media Network US, Specific Media, FOX Audience Network and 24/7 Real Media.

The opportunity for online advertising “is staggering” if online advertisers can specifically target the audience that receives the ads and precisely measure their effects so they can tailor their interactivity to offer just the right marketing experience, according to Edelman. Yet, the challenge to online advertisers is that they often don’t know where the network is placing their ads or how the network is charging them for that placement, Edelman said.

Thus, Edelman proposes that when dealing with online advertising networks, online advertisers should have the right to:

1. Know where networks are showing their ads. Web sites vary in user quality and context, and online advertisers have a right to know where the network is placing their ads so they can maximize exposure of and protect their brands.

2. Meaningful itemized billing. Advertisers have the right to know the details of each charge, so they might assess any potential problems without having to rely on the online advertiser that is billing them in the first place for information.

3. Use their data as they see fit. Some online advertising networks make it difficult for advertisers to move their campaign configuration details and performance records to other online advertising networks, keeping advertisers from expanding the reach of their campaigns and increasing their advertising costs.

4. Enjoy the fruits of their advertising campaigns. Once an online ad unearths a user who clicks on it, the network—because of behavioral targeting—can sell further exposure of that user to the first advertiser’s direct competition. Such a move makes the network money, but is a poor value for the original advertiser.

5. Resolve disputes fairly and transparently. Ad networks generally dictate the terms of contracts with advertisers. When advertisers do report a concern to the network, they often receive an answer that is non-negotiable. Furthermore, non-itemized billing data makes it difficult for the advertiser to figure out how severe the problem is. Even if they do, advertisers often are not technically equipped to handle these issues because terms and conditions differ with each ad network.

Edelman advises online advertisers to take steps to protect themselves. “Get technical teams up to speed on types of fraud and ask them to find ways to search logs and headers for signs of malfeasance. Get lawyers focused on this too and ask them to revise contracts to protect advertisers’ interests,” Edelman said. “Seek guarantees from ad networks and agencies and hold them accountable when things go wrong. Complain to regulators when policies are restrictive, anti-competitive, or just unfair. There’s ample room for improvement, and advertisers need not blindly accept the world as it stands.”

–Laura Phillips Garner

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Responses

  1. Love this, great job. Look forward to seeing the result of this propsal. Seems like it makes sense & would be of great value to advertisers.

  2. Hi Laura,

    Great post! I knew ad networks existed, but learned much more about them from this article.

    Having purchased some online advertising in the past, but largely though agencies or directly from the search engines, I can tell you the billing descriptions you receive even from first line providers can be somewhat murky, especially if you buy on impression (exposure) vs. pay-per-click.

    This is an area that could do much better for their clients by providing hard data about where their ads appeared and in what context, but it often isn’t so. So points 1,2 and 5 above are a real issue!

    I was also appalled by the fact that these networks will often use data they gather to sell ads to competitors of the entity that helped them gather the data in the first place. This is akin to the practice of selling key words related to your product or brand to a competitor (a practice that also is rampant on the web).

    I feel that greater disclosure on this front will only lead to more advertising by legit firms, so like Angela, I’m rooting for this proposal also.

    Regards, Mark


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