By: Rich Masterson
In recent weeks there has been a proliferation of activity around consumer privacy and more recently the FTC has announced an investigation into Google business practices. While these actions are undoubtedly well intended, I am becoming increasingly concerned that the U.S. Government may unintentionally do great harm to an already struggling economy.
Google has profoundly transformed the way we live and work and, increasingly, how we advertise. Making content and advertising relevant is a good thing for consumers and marketers alike. The “addressable” advertising market improves advertising efficiencies and provides consumers with highly relevant communications. But Google alone is not the only choice consumers or advertisers have when faced with a purchase decision.
Competitors like Microsoft, Yahoo and others have product offerings not dissimilar from Google and marketers continue to spend far more of their budgets on traditional media like newspapers, television and direct mail. Direct mail practices permit marketers to use personal information including financial information and credit history while Google advertising remains anonymous. Consequently a double standard emerges for marketers based on their choice of media. They can choose direct mail which is highly targeted and expensive or they can use broadcast television which is expensive and un-targeted. Google ads fall somewhere in between, allowing marketers to get the efficiency of broadcast media and the personalization of direct mail- absent personally identifiable information. But the rules governing these media are inconsistent.
Into the fray we see Congress confusing data breeches like those of Epsilon and big box retailers failure to protect consumer credit card data with the online privacy considerations of advertising on the Internet. While these issues may be in the “same church”, they are by no means in the “same pew”.
Perhaps more concerning is the impact on jobs, American innovation and competitiveness. While the sheer size and success of Google may make them unsympathetic to us, there is a risk that however well meaning our representatives in Washington may be, they do risk potentially damaging one of the few industries providing jobs in the midst of one of the worst recessions in American history.
Through its innovation, Google has spawned a cottage industry of consultants, media planners, artists and small businesses who specialize in leveraging Google products on behalf of millions of US businesses. These jobs are typically well paid, highly competitive and have become a bright spot in an otherwise dismal economy. There have been, quite literally, thousands of small businesses created by Google and its competitors.
My father worked for General Motors for thirty eight years including the last five years in Detroit. Today the auto industry is a shadow of its former self and requires taxpayer funded government bailouts. If we are not careful, Silicon Valley could be the next Detroit and the Google, Facebook and Amazon could be the “Big Three”. We would be wise to learn from our past and encourage the economic miracle known as Silicon Valley. The fact that Google has become a worldwide leader should not make us feel threatened; it should make us feel proud. Our Government would do well to think about ways of encouraging success stories like Google, not spend taxpayer money on multi year investigations into something as innocuous as advertising.
Consumers and advertisers have a choice and if Google violates the trust of either then the market will respond accordingly and it will require neither years of investigation or the using precious taxpayer funds of a country already overburdened with national debt.
Rich Masterson – Co-Founder and Chairman CampaignGrid, LLC