Targeted advertising — the process by which advertisers direct their message at a specific demographic — is neither a recent1 nor an irrational phenomenon.2 One industry executive has proclaimed it the “rare win for everyone” because it serves producers, advertisers, and consumers alike. It should be no surprise that the Information sector of the online economy — particularly new and social media platforms with robust access to consumer data — has structured revenue streams to benefit from targeted advertising. These platforms generate “substantially all of [their] revenue from advertising,” which in turn rely on active user engagement.
The Internet Information Economy is premised on the free flowing exchange of data and limited barriers to its collection and transmission. New and social media, including Google, Facebook, and LinkedIn, sustain themselves on a quid pro quo exchange of monetizable user data for a wide array of nominally gratuitous services. This free flow of data has revolutionized how marketers reach their desired audiences. Advertisers are willing to pay a premium for targeted advertisements with the expectation that the investment yields dividends. Currently, the technological prowess of new and social media platforms outpaces the existing regulatory landscape. However, these businesses contend with risks relating to the nature of targeted advertising, including the propensity to mislead consumers, and concomitant concerns about user privacy.
Acknowledging the ubiquity of targeted advertising and Internet Information Economy participants’ market share and political will, this Note proposes several policies for regulating such data collection and transmission practices. Calls for regulations on targeted advertisements — particularly those linked to new and social media — are likely to be met with claims of a First Amendment violation, and invocations of the Commercial Speech Doctrine. While the core of the Commercial Speech Doctrine captures speech proposing a commercial transaction, it also encompasses “expression related solely to the economic interests of the speaker and its audience.” Targeted advertising hosted on Internet Information Economy platforms poses a unique challenge to this paradigm. Its reliance on consumer data directly implicates the consumer more so than with “traditional” commercial speech.
There and Back: Vindicating the Listener's Interests in Targeted Advertising in the Internet Information Economy,
Colum. J. L. & Arts
Available at: https://scholarship.law.columbia.edu/law_media_arts/57