The Hub

Where we talk about ideas, events, cases & more
6 November 2015

Pay-to-play: Will Net Neutrality damage digital marketing efforts?

Imagine you’re a marketer and you want to launch a paid search campaign. The budget has finally been approved and the campaign is starting to generate clicks. Perfect scenario, you’d think? Well, now imagine that Internet Service Providers (ISPs), such as Telenet, Proximus and Mobistar, are allowed to manage internet traffic and deliver data at different speeds. You haven’t planned a budget for a fee to these ISPs so they might just as well decide to favour traffic to another website that has paid, slowing down all traffic to your website. At that moment you notice that your website’s bounce rate goes through the roof and that conversion rates are falling.

Pay_to_Play_Net_Neutrality.jpg

Internet business is booming business, but should it be?

This scenario might become reality since the European Parliament voted the Net Neutrality legislation. Let me explain. In short, Net Neutrality refers to the fact that “providers of internet access services shall treat all traffic equally, without discrimination, restriction or interference.”

You might think, is this not a good thing? Unfortunately, the current legislation contains a number of loopholes. Firstly, a practice called zero-rating is allowed. This essentially means that content providers such as Facebook, Twitter, Spotify, etc. can partner up with ISPs with the aim of excluding their generated traffic from users’ monthly gigabyte limits. More specifically it means that when users browse to websites of ISP partners, it will not be deducted from their data limit, whereas browsing to other websites will be deducted. Secondly, ISPs are even allowed to slow down traffic at any time, under the pretext of alleged internet traffic congestion. Finally, the legislation allows “fast lanes”, meaning that ISPs are allowed to load content faster from content providers that pay, by arguing that they are “specialty services”.

Site speed as competitive advantage

But what exactly does this mean for us as digital marketers? In a nutshell, it means that the digital environment might become a pay-to-play environment where companies need to pay to ensure a reliable and high-speed delivery of their content.

Several factors explain why site speed is so important for any company operating in the digital environment:

  • SEO: Google uses site speed as an element in its algorithm to rank pages
  • User experience: Websites with longer loading times tend to have higher bounce rates and lower average time on page. 47% of people expect a site to load within 2 seconds and 40% will abandon a website if the loading time exceeds 3 seconds
  • Conversions: Walmart saw a 2% increase in conversion for every second that their pages loaded faster
  • Repeat purchases: 79% of consumers who experienced slow site speed were less likely to buy from the same site again

In addition to the issues regarding site speed, the new Net Neutrality legislation also imposes an additional barrier to entry for innovative start-ups with a limited budget. German mobile provider Deutsche Telekom has already stated that they intend to charge start-ups if they want to boost the quality of their services. Imagine that this type of legislation had existed before the arrival of services such as Foursquare, Vimeo, Netflix, Soundcloud, etc. What would the digital environment of today have looked like?

Don’t panic, but think outside the box

It’s clear that Net Neutrality legislation ensuring equal treatment of all internet traffic is crucial, but I believe that rushing to conclusions might in this case create serious negative setbacks and unbalance the competitive landscape even further.

I strongly believe that, as marketers, we need to keep an eye on this kind of legislation and adapt accordingly. How will we maintain our campaign ROI expectations if we need to deal with the additional cost to ISPs? Will brick-and-mortar SMEs be even more reluctant to enter the digital market? Will we find new ways to provide impactful marketing in this pay-to-play environment?

Many questions remain and it will be up to us as marketers to show our creativity and agility to respond to these changing market environments. I believe that it will become even more important to provide content that our buyer personas truly want to read, at the right time and through the right medium. We will become increasingly responsible for creating helpful, not interruptive, content that pulls people towards our brand. Will you take up this challenge?

 

References:

http://www.europarl.europa.eu/RegData/etudes/ATAG/2015/569027/EPRS_ATA(2015)569027_EN.pdf

https://edri.org/files/11092013-FAQ-NN-regulation.pdf

http://webfoundation.org/2015/02/guest-blog-the-real-threat-to-the-open-internet-is-zero-rated-content-continued/

http://webfoundation.org/2015/10/net-neutrality-in-europe-a-statement-from-sir-tim-berners-lee/

http://googlewebmastercentral.blogspot.be/2010/04/using-site-speed-in-web-search-ranking.html

http://www.icrossing.com/uk/sites/default/files_uk/insight_pdf_files/SlowPagesLoseUsers_FINAL.pdf

https://econsultancy.com/blog/10936-site-speed-case-studies-tips-and-tools-for-improving-your-conversion-rate

http://techcrunch.com/2015/10/30/guaranteed-good-transmission-quality-vs-paid-prioritisation/

GettyImages-85184293_full-558069-edited.jpg