A recent blog post published by the Federal Trade Commission raises questions about whether the agency can render unbiased decisions about one of the major industries it is charged with overseeing.

If it had been published by an advocacy group, the post – entitled “Online Ads Roll the Dice” – would have simply been the latest in an unending series of baseless, pseudo-scientific attacks on online advertising over imagined harms. But coming from the chief technologist of the advertising industry’s primary regulator and enforcement agency, the post takes on a far more coercive tone.


Relying on research conducted by members of an FTC summer fellowship program, the post poses a series of leading questions about whether online advertising practices somehow discriminate against Internet users on the basis of “race, color, religion, sex or national origin.”  Putting aside the tortured logic that serves as the basis to attack the economic model that supports the creation of the very sites that they review, their greater missteps revolve around a fundamental lack of understanding of the medium and how consumers engage with it.

To support their suppositions, the FTC post leans heavily on a case study of a single Web site, operated by a traditionally African-American fraternity. It examines the types of ads served on the site, ranging from credit offers to vacations, and poses the question “could different groups of people, including ‘protected classes’ see entirely different ads?”

If that is indeed the question that the FTC is spending taxpayer money to resolve, it’s a few decades late.  Different groups of people have been seeing different ads throughout the entire history of modern advertising. The point of advertising is to connect people to offers that might interest them. Reaching out to a receptive audience is usually a good place to start.

Internet advertising may have refined that dynamic, but it hasn’t changed it. Whether online or off, advertisers continue to devote a great deal of effort to ensuring that their ads reach the people most likely to find them relevant.

The notion that seeing or not seeing certain ads online creates a “disproportionate adverse impact” on Web site visitors is one that strains credulity. First of all, it makes the offensive assumption that members of specific racial, religious or social groups visit only one type of Web site, and see only one type of advertisement.

Secondly, it suggests that ads represent such a primary and irreplaceable source of information for Internet users that failing to see a specific ad can cause measurable harm. 

The ad-supported Internet provides the most robust information sharing and gathering platform in history; one that is freely available to everyone.  Applying the FTC blog’s example of credit card offers to this medium, it would seem to suggest that the only way people learn about credit card offers is by passively absorbing ads for them.  The chief technologist’s infantilizing suggestion that “protected classes” are incapable of using the Internet to do further research before making a purchasing decision is one of the most bizarre aspects of the post.

Finally, their example attempts to cloud an otherwise well-established area of consumer protection law.  When Congress passed the Equal Credit Opportunity Act (ECOA) it balanced the need of certain protected classes to receive credit offers, while ensuring those offers are not discriminatory.  The law has long been interpreted not to apply to pre-application advertising (unless it rises to the level of impermissible “discouragement”).  Congress, unlike the FTC post, identified concrete consumer harms and provided clear rules of the road.

What is truly concerning is the FTC’s offhand demonization of a major industry that it oversees. The equivocating tone of the post makes it difficult to understand what, if anything, they would like advertisers to change, but the implied threat of regulatory intervention couldn’t be more clear.

As an enforcement agency the FTC has the responsibility to draw clear lines, based on the law, and to ensure that regulated companies operate within those lines. The Chief Technologist closes her post with a hand-washing disclaimer: “This work does not attempt to show that a disproportionate adverse impact resulted, only that it could be occurring.” Unfortunately, the post shows neither of those things, and provides little of value to consumers or advertisers.

Zaneis is executive vice president and general counsel for the Interactive Advertising Bureau (www.iab.net), which represents over 600 leading companies that actively engage in and support the sale of interactive advertising.