Channel programs News
Solution Providers: Abolishing Net Neutrality Raises Concerns Over Digital Ad Costs, Content Marketing
By voting Thursday to end net neutrality, the Federal Communications Commission granted significant authority to telecom and broadband providers in determining which content can and cannot be accessed by Internet users.
For solution providers, the decision has left many of them guessing how the decision will affect digital advertising prices and, in turn, which content, ad and marketing platforms might be given prioritized Internet speeds under the new rules. Jessica Garrett, vice president of marketing at Atlanta-based VeriStor Systems, No. 242 on the CRN Solution Provider 500, worries that deregulation could limit access to "freemium" marketing by forcing a "pay-to-play" system on prospective customers.
Similar practices, such as paid SEO and prioritized ad placement, have become common. But the prospect of that applying to Skype or social media is unfamiliar territory.
"It could accelerate dollars and access going to certain platforms," Garrett told CRN. "It could prioritize Facebook over LinkedIn, because Facebook pays the premium. I could see it reducing the playing field. You're going to have fewer sites that you can advertise on, that you can promote videos on, because it's going to be all about who's going to pay the premium and where the traffic is directed."
The schematics of how premium Internet service might function are also a major question mark for IT executives. If a pay-for-priority web site runs a digital ad sourced from a non-priority company, for example, Christopher Hertz – CMO at Arlington, Va.-based ISV DivvyCloud – wondered whether that would cause the ad to load slowly on the priority web site.
The FCC's sweeping overhaul of the Internet services industry has the potential to complicate business planning and reduce efficiency, Hertz said, but companies also cannot predict how the telecom giants will respond now that the U.S. government has granted their wish.
"(Will) companies actually start to do the things they'll be allowed to in terms of blocking or slowing traffic, or giving the fast lanes to certain companies? There has been some indication that Congress is going to act, and you wonder if Verizon, Comcast or AT&T will do anything," he said.
DivvyCloud, which sells complex automation software, relies primarily on industry events to get experts in front of customers. But digital content and ads are a component of its marketing budget. If the Verizons and AT&Ts of the world begin affecting the cost or complexity of those tactics, Hertz can see the solution provider re-evaluating its marketing strategy.
"Will this cause us to drive more deeply into alternative mechanisms to contact those customers? Yeah, possibly," Hertz said. "It will just depend on whether there was an increase to the complexity of us trying to use digital advertising or a material increase in the cost of it. As that manifests itself, it certainly could change how we would spend our marketing dollars."
Consulting giants like Accenture, No. 2 on the CRN SP 500, are sources of marketing expertise and guidance for hordes of companies worldwide. Senior Managing Director Glen Hartman, part of Accenture Interactive North America and its global digital marketing business, offered two personal takeaways regarding the FCC's ruling.
He said B2B marketers should maintain a high level of transparency when it comes to media placement and communications, and ensure that any potential premium Internet services drive real value toward the company's marketing activities. The "value-trust" quotient, or the amount of information a user gives up for a more personalized online experience, applies to telecom companies in this instance.
"Transparency applies here for the carriers and clients so people understand what some of these new packages or services might be to make it less of a black box," Hartman told CRN. "It would open up options and incentives to do the right thing, basically… Telecom companies, they need to understand that (value-trust quotient). The value they're giving is going to need to be defined by the companies more so than the telecos."
Park Place CMO Jennifer Deutsch, while personally in favor of net neutrality, believes her company – a Cleveland-based third-party maintenance provider, No. 208 on the CRN SP 500 – will feel many direct effects of the FCC's ruling.
"(Net neutrality) protects innovation and enables freedom of speech and levels the playing field," she said. "The rest of it, we don't know… The impact on the cost in the space, I think, would be negligible. There's no proof yet. It's kind of a wait-and-see."
Ultimately, Garrett and other solution provider executives agreed that they can do little more than monitor how the net neutrality repeal plays out in practice. Garrett has no plans to change VeriStor's 2018 marketing strategy and expects it will take "a little while" for broadband providers to figure things out.
"There's so much to be figured out yet," she said. "It's going to be really interesting to watch, but it's not a time for us to be freaked out or do anything about it."