IAB Head Warns Congress On Ad Regulation

More laws mean less for small businesses

Interactive advertising and small businesses should work together without the spectre of government regulations getting in the way.

Randall Rothenberg, president and CEO of the Interactive Advertising Bureau, appeared before Congress to ask the House Small Business Committee Subcommittee on Regulations, Healthcare and Trade to take it easy on regulating online advertising. He called paid search ads “one of the most revolutionary tools in the history of marketing.”

Online success stories in small business exist in part due to advertising paying some of the bills. These small publishers drop ad units or affiliate placements on their sites, and derive a share of the revenue those ads generate.

Moves have been made to grab some of the revenue passing through those ads. New York State passed a law demanding the collection of sales taxes on sales originating through an affiliate ad on sites belonging to state residents. Amazon.com yanked its affiliate program from New York members in response.

As has been a customary stance in the online ad industry, Rothenberg opposes additional regulation of such advertising. Privacy controls in modern browsers, including the ability to manage and delete “cookie” files that track one’s browsing habits, already give people what they need in his opinion.

The essential argument by Rothenberg contends that more regulation means less advertising being available to small businesses, or anyone else. But cash-strapped state governments, and perhaps even Capitol Hill, seem ready to look more closely at the Internet and its potential tax windfall for their treasuries.

We won’t be surprised to see such cash grabs take place, at least on the state level, should New York’s law withstand challenges from Amazon.com. Small businesses involved with affiliate marketing in particular may wish to make their feelings known (politely) to their state and federal representation.

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