Could Federal Government Privacy Policy Kill Online News?

[Commentary] Recently, Ken Auletta observed that there wasn't enough local advertising revenue to support hyperlocal news. And that was that; the conversation then moved on to other topics. It was assumed that the question of the economic viability of local news wasn't a topic of public policy; it would be purely a matter for the dog-eat-dog free market to determine. Unfortunately, this is not an unusual attitude in the media policy community. Although privacy policy is a booming area within the Washington, D.C. policymaking community, discussions about privacy have traditionally been divorced from media policy. Not surprisingly, it was nowhere to be found at the two-day Shorenstein Center conference on the future of news.

But the economics of local advertising and thus the economic viability of the news, especially expensive investigative reporting of government, are heavily determined by Federal privacy policy, which regulates "behavioral targeting" (also known as "behavioral advertising" or "behavioral marketing"). Behavioral targeting refers to the ability of advertisers to track the behavior of online users not only within one website but across all their online activity. This data can also be linked to contextual data such as demographics, geographic location, and past purchases. The more information about an online user's behavior that an advertiser has, the better the advertiser can target appropriate ads to the user's interests, and the more the advertiser is willing to pay for the ad. In short, the better the behavioral targeting, the less privacy the user has.

What does this conflict mean for media policy? It means that the norms of democracy and privacy are in direct conflict.