Media diversity and online advertising.

• Author: Ammori, Marvin

1. INTRODUCTION II. BACKGROUND A. Freedom of Press, Media Diversity, and Advertising B. Privacy in Many Forms III. ENTER THE INTERNET A. The Internet Disrupts Press, Increases Diversity B. The Internet Transforms Privacy IV. MEDIA DIVERSITY AND PRIVACY A. Advertising, Media, and the Internet Ecosystem B. Balancing Privacy and Diversity V. CONCLUDING THOUGHTS I. INTRODUCTION

   In the midst of a fierce presidential election season, in October 2012, The New York Times revealed that the political campaigns of Barack Obama and Mitt Romney agree on at least one thing. (1) Both are turning to personalized data about voters, such as "shopping histories, gambling tendencies, interest in get-rich-quick schemes, dating preferences and financial problems." (2) Campaign workers use this information in their "get out the vote" efforts running up to Election Day. (3) They are debating whether to publicly shame people into voting through social networks or to use the detailed information to "persuade" unlikely voters to do their civic duty. (4) The two major parties are buying into big data; together, they spent $13 million on "data acquisition and related services" in 2012. (5) Even though both campaigns claim to follow the highest ethical standards and industry best practices, (6) and although the Federal Trade Commission (FTC) and Commerce Department have both emphasized the importance of "notice" to consumers and choice, (7) it remains unclear whether Americans understand know how much information the two presidential campaigns or their consultants have. (8) Headlines like Forbes's "The Obama And Romney Campaigns Know If You've Visited Porn Sites" suggest much of the public does not yet know these facts. (9) A member of Romney's campaign told The New York Times: "You don't want your analytical efforts to be obvious because voters get creeped out.... A lot of what we're doing is behind the scenes." (10)

   Despite the revelations of such massive information collection of personal information, there has been little uproar--likely because of the countervailing benefits of this activity. (11) Considering the value of wide participation in a democracy and our nation's chronically low turnout rates, (12) anything increasing electoral participation seems like a good thing. In addition, for centuries, political candidates have used information about voters to craft an argument that would persuade a particular voter, from knowing their gender to knowing their union membership. (13)

   Consider a second, seemingly unrelated, example. Ars Technica is an online-only publication with millions of readers across the country. (14) It specializes in technology news and informed analysis. (15) In March of 2010, the site's editors experimented with their audience by "blocking" content from readers who visited the site using ad-blocking technology. (16) The experiment worked, though it angered some of their readers. (17) Some twenty-five thousand readers responded by whitelisting the site (meaning they removed Ars Technica from the sites whose ads were blocked), while another two hundred readers paid for premium subscriptions, (18) The following day, the publication explained the "experiment gone wrong," detailing the importance of advertising to Ars Technica and others outlets like it, and asking readers to consider the real harms to online publications caused by ad blocking, such as staff layoffs and reliance on more advertising "of a truly questionable nature." (19) The experiment also surprised the editors; they didn't realize many people were blocking ads unintentionally, not understanding the harm it caused to the sites they frequent. (20) From the point of view of a publisher, blocking ads has essentially the same effect as blocking the use of information to generate more revenue from ads. (21) It is unclear whether Ars Technica runs behavioral advertising, but behavioral advertising often generates more revenue than less targeted advertising, and many sites rely on such advertising in part to sustain themselves. (22) Moreover, sites like Ars Technica that host ads are paid on a per impression basis, which means ad blocking can have a significant impact on the revenue they earn. (23) When a user or law reduces the advertising revenue available to the publisher--however legitimate the reasons--the same harms are possible, including staff layoffs. (24)

   These two seemingly disparate stories point to the same general tension between privacy and speech. In the first example, the tension is between the privacy of voters' personal information and the speech of political campaigns (as well as voter turnout). In the second example, the tension is between privacy and funding the speech of media outlets online, which has a ripple effect on the media diversity available on the internet. This second tension--between privacy of personal information and media diversity--is the subject of this paper. We do not take sides in the abstract, determining that media diversity should outrank privacy or vice versa. Both are important values. Rather, we believe in the benefit of spelling out a tension that often goes overlooked--in principle, at the margin, there must be tradeoffs between increased online privacy protections and online media diversity.

   The paper has three parts. First, we explore these competing interests and their role in American society and law. Second, we discuss how the internet altered the landscape in which these values exist, describing how policymakers and courts reconcile these interests in light of changing technology. Finally, we identify the balance that exists between privacy and advertising in the online age, and conclude by offering suggestions for how to maintain that balance while preserving the somewhat overlooked value of media diversity. In essence, we argue greater engagement is needed between the public, the advertising community, publishers, and privacy advocates. The Worldwide Web Consortium, Do Not Track Initiative, and other efforts are a good start and have shown some success, (25) but clearly more must be done in promoting mutual understanding of the benefits of online advertising, the adverse consequences that advertising may have on privacy, and the importance of media diversity online. We hope this paper contributes to that discussion.

2. BACKGROUND

   Media diversity and privacy are both important values-recognized as such long before the advent of the internet--that underlie a range of domestic policies and laws.

   1. Freedom of Press, Media Diversity, and Advertising

      Our Constitution defends the right to a free press and our popular and legal culture celebrates that right. (26) Indeed, Thomas Jefferson said if he were given the choice "between government without newspapers and newspapers without government, [he] wouldn't hesitate to choose the latter." (27) The value of a free press, according to jurists and scholars, includes promoting democratic deliberation, informing citizens' role as voters, unearthing government misfeasance and malfeasance, ensuring "safety valves" for disagreement, and checking abuses of government power. (28) Our tradition recognizes that we must balance the right to freedom of press against other important rights--for example, defamation of personal reputations and divulging national security secrets. (29) Even in these circumstances, the threshold for overriding freedom of the press is, at least formally, very high. (30)

      Our constitutional history regarding freedom of press has also placed a paramount value on diversity. In an often-quoted line, the Supreme Court declared in Associated Press v. United States that the First Amendment "rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public. (31) Since that 1945 case, the Court has repeatedly affirmed the importance of this principle, stating that the principle has "long been a basic tenet of national communications policy." (32) So has Congress, when faced with new technologies. (33) Following the Supreme Court, the FCC has called the promotion of diversity one of its core mandates in furthering the public interest. (34) In a previous article, building on the work of Yochai Benkler, Ed Baker, Zechariah Chafee, and others, Marvin Ammori outlined some of the judicial precedents, congressional statutes, and important agency rules furthering the value of diversity in the media from the early days of newspapers delivered by post through the telegraph, telephone, broadcasting system, cable network, and internet platforms. (35) Primarily through "must-carry" rules, nondiscrimination rules, and congressional and agency policies against media consolidation and cross-ownership across media industries, the government has sought to advance diversity. (36)

      Unlike some countries that have opted for greater government ownership of media--from authoritarian regimes like China to democracies like the United Kingdom (37)--the United States has generally chosen a more private-sector approach, coupled with regulation to promote important values like diversity. (38) That American private media system has been intertwined with advertising for well over a century. (39) Much of the news media is supported at least partly through advertising to sustain production and ideally earn a profit, (40) This is not a new phenomenon--radio, television, and newspapers were predominantly advertisement supported throughout the twentieth century, (41) Indeed, the genre of soap operas began with the sponsor Proctor & Gamble--to sell detergents and soaps, (42) The deep involvement of advertisers in our media system continues to this day.

      Advertising plays a significant role in sustaining media outlets, or at least in adding to their revenues. (43) To the extent those revenues are reinvested to cover expenses, advertising revenue enables them to hire and pay staff, cover a...