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IAB To House Committee: Laws Targeting Data-Driven Advertising Would Destroy Jobs and U.S. Economy

Delivering on the Promise of Data-Driven Video 2

WASHINGTON, D.C. March, 1, 2022– In advance of today’s congressional hearing on the “Banning Surveillance Advertising Act,” legislation that would decimate the digital advertising industry and harm every business that depends on it, the Interactive Advertising Bureau (IAB) has submitted a letter on behalf of its more than 700 members to House Energy & Commerce Committee leaders.

“It’s shocking that the organizers of today’s hearing did not invite anyone from the advertising industry to provide an important perspective on how this misguided piece of legislation would undermine progress in an innovative and economically vital industry, not only to brands, publishers, advertising and technology companies IAB represents, but also to small businesses and creators working in our modern digital economy,” said Lartease Tiffith, IAB’s Executive Vice President of Public Policy.

He cited IAB’s latest Economic Impact of the Market-Making Internet study, showing the rapid increase of internet-related jobs and economic growth in the U.S. According to the study, in 2020 the ad-supported internet generated over 17 million jobs and 12% of U.S. GDP, representing a growth rate of 22% over four years, while U.S. GDP grew at two to three percent during the timeframe. “The legislation would essentially make it illegal to use data for advertising purposes, something that would destroy American jobs and the U.S. economy that are tied to data-driven advertising,” said Tiffith.

“The language is so broad, it’s unclear whether it would affect any business with an online customer relationship. Without the advertising dollars that support it, anyone who uses the internet could lose the free search, email, news, entertainment and other services they currently enjoy. The free and open internet would dramatically change for the worse.”

He added, “Instead, IAB recommends Privacy for America’s basic principles for data protection, a federal privacy law that sets guidelines, and stronger enforcement by the FTC.”

IAB’s letter to the Chair and Ranking Member of the Committee’s Subcommittee on Consumer Protection details more benefits of personalized, targeted advertising, and negative consequences a ban could inflict on both businesses and consumers. For example, small businesses and the self-employed represent a greater share of internet jobs than the largest companies, with big majorities reporting that data-driven advertising has helped them to lower costs and discover new customers.

If blanket bans on the most valuable form of advertising were to take effect, ad prices could fall by as much as 52%. Publishers could lose between $32 and $39 billion in revenue. American consumers, who value free ad-supported services at nearly $30,000 per person annually, could lose access.  This would be trillions of dollars in valuable goods and services that American consumers would lose, collectively.

In his letter, Tiffith argues that several bills the Subcommittee is considering, as part of its hearing entitled “Holding Big Tech Accountable: Legislation to Protect Online Users,” would also have negative consequences for every American. “Implementation of the General Data Protection Regulation in Europe has already foreshadowed what is likely to occur in the U.S. should unnecessary and unfair data constraints be implemented,” he writes.

Such laws in the U.S. “would increase market concentration, limit consumer choice, negatively impact the use of the Internet, harm small businesses and creators, and remove competition from the Internet.”

About IAB

The Interactive Advertising Bureau empowers the media and marketing industries to thrive in the digital economy. Its membership comprises more than 700 leading media companies, brands, agencies, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.

IAB Media Contacts
Kate Tumino / Brittany Tibaldi
212-896-1252 / 347-487-6794
[email protected]/ [email protected]