Online advertising is still a relatively new industry, and the recent flurry of acquisitions in this space – by Google, Microsoft, Yahoo, AOL, and other companies – has drawn even more attention to the issues it raises, including privacy. That's why we're glad to see that the Federal Trade Commission is planning a Town Hall for November 1 and 2 to look at some of the issues surrounding online behavioral advertising. The public discussion of behavioral advertising and its privacy implications is an important one, and we believe that it is one best had with a broad set of stakeholders and a full picture of the online advertising business.
With that in mind, late last week we sent comments recommending that the Town Hall address two additional topics. We did so in response to the FTC's request for suggested Town Hall topics in addition to the very timely questions it already plans to pursue. Specifically, our letter recommended that the FTC consider:
- The rapidly changing business landscape of online advertising, and the role it plays in providing free, accessible, user-friendly, and high-quality content to consumers. Since 2000, annual online revenue in the U.S. alone grew from $8 billion to over $17 billion. The growth in online advertising has also spurred innovation, competition, and investment in the online advertising space – all of which produce consumer benefits in the form of more online resources and more relevant information. In our experience consumers value the advertisements that we deliver along with search results and other web content, which connect them to the information, products, and services they seek. Simply put, advertising is information, and relevant advertising is information that is useful to consumers.
- The ways in which online advertising is contributing to a healthy and vibrant small business community. We know that many website owners can afford to dedicate themselves to their sites more fully – and sometimes full-time – because a significant percentage of the revenue we earn from advertising ends up in their hands as publishers of blogs and other websites and our advertising partners. In 2006, Google paid $3.3 billion in revenue to our partners. Our advertising network helps small businesses connect in an affordable and effective manner with otherwise unreachable consumers, including consumers in small, remote, or niche markets. An advertiser decides exactly how much money to spend on advertising, and can tie its spending directly to the response of a potential customer.
Of course, we continue to focus our attention on the privacy of our users, and privacy ought to be an important component of the Town Hall. We recognize that user, advertiser, and website publisher trust is critical to the success of our business, and we've taken a number of recent steps to help bolster our already strong privacy policies. We also think our acquisition of DoubleClick provides an opportunity for us to bolster privacy even further.
We're looking forward to talking more about these issues at the Town Hall.