The responsible use of data has brought countless benefits to consumers and businesses – not to mention entire U.S. and global economy. We can access the latest deals and products from our favorite online stores, stream news on the Internet, stay connected with friends on social media, and a whole lot more.
The best part about all of this? Most of these services come to consumers personalized and free or at a very low cost, thanks to digital advertising.
According to research conducted by the Harvard Business School, consumers engage with and appreciate ad personalization when the methods are transparently disclosed and not viewed as overstepping. Data-driven marketing and insights also help make it possible for small businesses and startups to provide consumers a wider range of products and services that cater to their unique and diverse interests. From vintage CDs to local specialty foods, there is a whole community of online small businesses offering novelties that aren’t typically available at big box retailers or in every state.
Online interest-based advertising also plays a critical role in supporting a healthy and diverse flow of news and information. In today’s digital world, many news outlets, blogs, and other websites and publishers rely heavily on digital advertising revenue to remain in business and provide free or low-cost content to keep consumers informed and entertained. This advertising and the data that underpins it has been particularly crucial for small publishers that provide important content to specific audiences – a niche sports publication or a gardening blog, for example – but don’t have access to diverse revenue streams.
Without advertising revenue, many outlets and platforms would also likely have to charge consumers or charge them more for access. According to an estimate from Recode, for instance, the internet without ads could cost consumers about $35 a month, or $420 a year.
Another instructive case study is the impact that the General Data Protection Regulation (GDPR) had on news sites in when the EU’s law went into effect. London-based Top10VPN tested over 500 U.S. news sites and discovered that 42 percent of U.S. news sites flatly blocked connections from Europe rather than apply GDPR’s provisions to U.S. users. Another recent white paper found that recorded pageviews and revenue fell by about 10% for EU users after GDPR’s enforcement deadline. This translates to about a $8,000 drop in weekly recorded revenue per week for the median website.
As we pursue legislation to address how consumer information can be collected, shared or used online, we must recognize the benefits that data-fueled businesses have brought both consumers and businesses.. Our new paradigm shifts away from the old notice-and-choice model and toward a common set of privacy norms that defines data practices that harm consumers and actually makes them illegal. And by establishing a strong national privacy standard, businesses of all sizes can have clear rules of the road and focus on providing the products and services their customers know and love.
We’ll continue to urge policymakers to consider strong protections for consumers that also preserve the revenue models so many platforms depend on for providing content and keeping costs low for consumers. We can have the best of both worlds – we don’t have to choose one or the other.