Web Banner Ads Targeted




Most recently, FTC said it's going to train its guns on banner advertisements that appear across the Internet and are a key factor in the growth of that vital new medium. Specifically, FTC is aiming its sights on "advertisers who place banner advertisements on Web sites using online profiling technology." FTC aims to regulate mightily in this area, as it intends to do in virtually every other online area. FTC Chairman Robert Pitofsky proclaimed recently that this practice "can be troubling" and announced that it merits FTC's "careful examination."


No, he didn't. Actually, Chairman Pitofsky pointed to the large growth of Internet advertising as follows:

"Online advertising revenues in the United States grew from $300 million in 1996 to almost $2 billion in 1998, and are expected to reach as much as $11.5 billion by 2003."


Chairman Pitofsky didn't mention exactly what percentage of the overall advertising universe consists of Internet advertising. 1995 estimates indicate the advertising industry is a $170 billion industry--one growing at around 7% annually. But FTC officials virtually always cite Internet advertising growth figures in a vacuum without any relation to total advertising revenues.

The Internet is Skyrocketing

Looking at those figures in that light, they're really not quite as "spectacular" as FTC officials consistently point out. Here are a few examples of FTC officials' overheated "The Internet is Skyrocketing: Quick, Let's Regulate" language and predictions:

A Completely Different Picture

Looking at FTC's estimates of Internet advertising growth as compared to total advertising expenditures produces a completely different picture. The 1998 figure of $2 billion means that Net ads represent only about 1% of total advertising expenditures. Even its predicted "as much as" $11.5 billion figure for 2003, if accurate, would still mean that Net ads would garner only 5% of the advertising universe in that future year.

Advertising Compliance Service has asked several FTC officials during the past year what percentage of FTC's budget is currently devoted to Internet advertising regulation. Not one FTC official could give us the answer to that question. Reason: Since Internet advertising comprises about 1% of advertising revenues, you would expect about 1% of FTC's budget to be devoted to this new medium. It appears to be much, much greater. (See Advertising Compliance Service, "Brave New World of Internet Advertising Compliance Has Arrived," Tab #15, New Media, Articles #74, 75 and 77.)


Referring to online profiling, Pitofsky conceded that "consumers can benefit from online advertising that is tied to their specific interests." To assuage advertisers in such traditional media as the direct mail industry, Pitofsky said:

"The use of conventional demographic information by advertisers to target consumers most likely to be interested in their products and services is a staple of the advertising industry, and does not raise any eyebrows."

Pitofsky did not mention that the current use of "conventional demographic information by advertisers to target consumers most likely to be interested in their products and services" by non-Internet advertisers also heavily relies on computer databases. The goal of all advertisers is certainly to deliver efficiently the right ad to the right person. By coming down in favor of obviously less efficient "conventional demographic information," Pitofsky has revealed his agency's increasing anti-Internet advertising bias. The "old ways" of the advertising industry don't raise eyebrows at FTC any more (though they certainly used to). But Internet advertising apparently doesn't pass FTC's "eyebrows" test.


"Online profiling, however, looks like it may be a very different beast," Pitofsky opined. He added:

"When I see, read, or hear an ad in the offline market place, `it' takes away no information from me. But, the online entity placing the ad may have the ability to watch me as I surf across various web sites, record what ads I already have seen, make sure I do not see them again, and show me ads it presumes will be of interest to me based upon the sites I have visited and whether I have clicked on other ads I have seen. And, all of this can take place without my knowledge, let alone consent. On a personal level, I find this more than a bit disturbing."


Internet advertisers haven't even begun to digest all of the many net regulations FTC has mustered, when FTC held another one of its Workshops. This workshop was called the "Public Workshop on Online Profiling." It took place on November 8, 1999. FTC jointly sponsored it with the Commerce Department. What was "a central question for this workshop"?

"How can we preserve and develop consumer confidence in online commerce while balancing the interests of online marketers who want to target their ads to interested audiences and balancing certain benefits to competition and consumers that may flow from target marketing?"

Pitofsky noted that the workshop would examine "new findings on consumers' views about online profiling and the need for privacy disclosures by online profiling companies." It would "explore both the privacy implications of online profiling technology and its costs and benefits for consumers and business."


Opening Remarks, FTC Chairman Robert Pitofsky, Public Workshop on Online Profiling, November 8, 1999.

Volume XIX
Issue 22
November 15, 1999
Page 5-8

Advertising Compliance Service is a REFERENCE COMPENDIUM of JLCom Publishing Co., L.L.C.

NOTICE: This publication is not intended to provide legal advice. Persons who need legal services should contact a duly licensed professional.

Additional Information

How Banner Ads Work
Article entitled, "How Banner Ads Work" - from HowStuffWorks.

Banner Ad Defined
Wikipedia defines a web banner or banner ad as "a form of advertising on the World Wide Web. This form of online advertising entails embedding an advertisement into a web page".

Banner Ad - Another Definition
Marketingterms.com offers this definition of banner ad: "A graphical web advertising unit, typically measuring 468 pixels wide and 60 pixels tall (i.e. 468x60)".

How to Use Banner Ads to Promote Your Website
Article entitled, "Using Banner Ads to Promote Your Website".

Psychology of Banner Ads
Article entitled, "The psychology of banner ads".

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You are welcome and encouraged to link from your Web site to the Advertising Law Resource Center Web site. To link to this specific page, feel free to use your own accurate description or simply copy the following code:

<a href="http://www.lawpublish.com/banner-ads.html">Banner Ads - Article and Resources</a>.

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