Call it growing pains. The online ad industry's largest trade group, the Interactive Advertising Bureau, expects to help establish and enforce guidelines for the use of data in online ads -- soon. As Congress, the Federal Trade Commission and state governments threaten intervention, it's time the industry grows up, says VP Public Policy Mike Zaneis.
"And part of growing up as a trade association is meeting the public policy challenges," he told ClickZ News in an interview this week.
To that end, the IAB may announce plans to establish data security and disclosure-related enforcement capabilities alongside other parties in the next four to six weeks.
Over cold borscht and a way-too-big turkey club at Times Square's Polish Tea Room, Zaneis discussed self-regulation, enforcement, educating the industry about public policy, and what it's like representing the IAB on Capitol Hill.
Q: Can you give me a sense of your background and how that informed your approach to your work?
A: What I like to say is I'm really just a hack lawyer and lobbyist in Washington, D.C. I've always worked in the technology telecom area...but really on the legislative side of things -- intellectual property, telecommunications, ecommerce, privacy, data security. When I was at the U.S. Chamber of Commerce I ended up being the executive director for e-commerce within our lobby shop, and so handled all those issues.
Q: You were with the Chamber of Commerce right before you joined the IAB, right?
A: Right. I started talking with some of the member companies before I even took on the job and it became very apparent to me that it was not a technology trade association but really a media trade association or an advertising trade association... That, of course, intrigued me. But I didn't have a background in media or advertising, so it's been a real learning curve.
Q: What does the IAB need to change to mold itself as a public policy operation?
A: First and foremost we need to continue to get high level buy-in from our members. So many of the online properties are run by salespeople or people from the marketing side or the technology side... Many of our members represent the online division or company within a larger company.
They're thinking sales, sales, sales. Getting them more bought into "I need to care about public policy because it can impact what I am able to do" -- we've done a great job of that.
The second board meeting ever under Randy [Rothenberg, IAB President and CEO] and myself, we brought [our board members] all to D.C., brought in some high level policy makers to talk to them about what's going on, just to get them bought in. We need to continue to do that.
I think operationally what we need to focus on is continuing to grow and whether it's just IAB growing, or growing the number of companies that are engaged in D.C. The reality is these companies have far greater resources than a trade association can have. When you talk about member companies like Google and Microsoft, you have 20-plus people in their government relations [division], you need to harness those resources... These are the people that employ constituents for Members of Congress, and so they want to hear from these companies, these local companies.
That's also what we're trying to do on the small publisher side: build an army of small publishers and help them understand how important public policy is so we can bring them to Washington, D.C. to tell their story.
Q: Does the IAB have to think more about state government now in addition to federal government?
A: Working on state stuff will be key. I think we'll see a serious increase in the number of state bills that affect this industry potentially. So, we're going to have to focus there heavily next year. And I think the debate is going to be, in D.C., it's been so event-oriented...you get a set of hearings around competition. You get press around the ISP model of behavioral targeting, and you get hearings around ISP BT. But I think that will broaden. I think the debate becomes more broad, about how data is collected and used for marketing and advertising purposes online. And I think it impacts more industries than just publishers and portals; I think the advertisers, the agencies, e-commerce companies, are going to be involved with this. If it gets incredibly broad, then I think you start bringing in folks like the financial services sector and the healthcare folks.
Q: It sounds like you are going to create data security and disclosure enforcement alongside some other organizations. Do you have an idea of when that might be official?
A: There's a high-level commitment already from the ANA, the four A's and the IAB.... The question is, do we go forward as associations? Do we go forward with our member companies? Do the associations lead? Do the companies lead? Do we go forward with a predetermined outcome of "this will be our third party enforcement group?" Those decisions haven't been made yet. I think it will probably be hand-in-hand with our member companies moving forward. And I think the reality is we might come up with multiple solutions. What I think of as the self-regulatory code, if we get that right, maybe there are multiple people that can enforce it.... Maybe it will be an open code, and if it's something that's good and strong, it probably shouldn't be proprietary, right? We want something that just works and is widely adopted.
We haven't put any official deadlines on it, but I think in four to six weeks we could probably very easily have some public announcements.
Q: And this has been ongoing for most of the year, right?
Q: I've talked to some publishers who are content with the IAB as a promoter of the industry, and they're not too keen on this idea of enforcement. Are you getting pushback?
A: People that haven't bought into the fact that public policy is important don't recognize the threats and challenges that are out there. Those tend to be the smaller people. If you're an ad sales guy, you don't want to hear about limits; you want to hear about what can the engineers do to push the services that my company can provide so I can go out and sell it.
But I think the reality that is really beginning to seep down deep in our industry is we're big, we've arrived, we're no longer this little nascent industry. We were $21 billion last year in the United States alone. We need to grow up. And part of growing up as a trade association is meeting the public policy challenges.
There will be a little bit of pain to any self-regulatory program, and the reluctance I see is not so much going forward. The reluctance I see is more in "How do we get it right? How do we make sure we balance the pain with the benefit?"
I'm not seeing nearly as much reluctance. A year ago if we would have talked, I would have said there are a lot of folks who don't understand what we're doing and why. We've preached to them a lot.
Q: Who are the folks in Congress you're typically dealing with?
A: Congress is just getting up to speed on this, so there's not this widespread interest; it's not the financial sector meltdown where everybody has a stake in it. It's really folks in the commerce committees, so the Senate Commerce Committee and the House Energy and Commerce Committee are the primary committees of jurisdiction.
We've got a couple of top members in Congress in both those committees that are very privacy-oriented and have some concerns about targeting of any type even if it's anonymous. We need to overcome that through education; there is no harm, but there's huge benefit. How many thousands of jobs does this industry create in your district or your state?
We're branching out a little bit. The judiciary committees care about this specifically. We supported Senator Leahy's bill that came out of the Senate Judiciary, which was an enforcement bill on spyware. So they care, we're getting them engaged and showing them we can work with them on legislation. It may not be groundbreaking stuff...but we can work with them and help them pass positive pieces of legislation.
Q: So by publicly commenting that legislation, it was like a shout-out to Leahy, sort of saying, "We recognize what you're doing, we appreciate it. Can we talk about this [other issue]?"
A: [We're saying] there's real value to what you're doing and we appreciate your attention here. Let's talk about how we can work together in the future. Absolutely.
Q: What's a typical day for you when you're on the Hill?
A: When I'm on the Hill, what I'm trying to do is...get in and meet with members of Congress. Staff's important, but just last week we went in to meet with a couple of members of Congress, just to say, "Hey, we're here. We're not asking for anything. We wanted to introduce ourselves. You've probably never heard of IAB, but I guarantee you you've heard of our members. We're going to have some real issues and serious discussions next year, and we just want you to know that we're here. This is what we do; this is what we don't do." And you can have that in a 10-minute conversation.
We hop around: House, Senate, Republican, Dem -- it doesn't matter.
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.
March 19, 2014