NEWSFLASH!!! - Lawmakers May Decimate Internet Marketing

[opportunitiesaplenty]

Warriors,
In a stunning move that demonstrates lawmakers have absolutely no understanding of the economy and the underlying forces that drive it, several legislators have decided that getting their hands into the cookie jar even deeper is the best way to help the economy avoid a recession.

How, you may ask? Why, by eliminating the tax deduction for advertising, of course. In move that’s sure to cripple the advertising industry by all but eliminating ad spending for many businesses, several members of congress have proposed another innovative way to get their hands on more of your money.

Why any sane individual would propose increasing taxes on business while the economy is slow is open to debate, but if you have any Adsense or other advertising on your website, prepare for a sever decline in revenue if such legislation passes.

In another move sure to wreak havoc with online marketers, other legislators, in the name of consumer protection, have proposed eliminating behavorial targeting and cookies. Like to run affiliate programs or sell as an affiliate? Well, you’d better find another way to track sales, because the majority of such programs use cookies as the primary way to track who gets credit for affiliate sales.

Be careful who you vote for; the business you save may be your own.

From Brand Magazine –

“An end to the corporate tax deduction for advertising: With the deficit in the trillions, preventing companies from writing off their ad expenses against their taxes would give the Obama White House a new way to fund its spending. This has already been floated by Obama’s new chief of staff, Rahm Emanuel. “He has already started looking at ad deduction issues,” said Dan Jaffe, evp of the Assn. for National Advertisers. “It is my guess that some people will revisit an across-the-board ad deduction as well.” Such a move would drive down ad spend as companies scramble to save their bottom lines from increased tax levels.”

"Sen. Byron Dorgan, D-N.D., and Rep. Ed Markey, D-Mass., propose outlawing behavioral targeting, cookies and “deep-packet inspection” (a way for advertisers to see what Web users are downloading so they can serve relevant online ads). “[Markey] said there should be some sort of global bill of privacy rights,” said Bennet Kelley, founder of the Internet Law Center in Santa Monica, Calif. Such a move could hobble the online ad business—the only area of marketing spend still growing. “There’s absolutely going to be people screaming for privacy regulation,” added Michael Cassidy, CEO of Undertone Networks in New York.

The combination of these two would obviously spell the end for contextual advertising as we now know it. Yet another reason to make your living creating and selling your own products.

Sheer brilliance in government; as we've come to expect!

[schabotte]

Does hearing talk like that from elected govt. officials really surprise you?

Add to that the rumblings of the 401K retirement programs that are going on now as shown in this LA Times story:

Calls grow to overhaul 401(k) retirement plans - Los Angeles Times

We're definitely in for some interesting times here in the states as govt scrambles to get more income because to cut its size/layoff unproductive staff would be the greatest heresy a politician can contemplate.

[kevin campbelle]

It is important to note that this was quoted just before the points was listed by brandweek

"Here’s a look at the worst-case scenario for marketers under Obama. The caveat: It is unlikely that all of these things will happen; the Iraq war and healthcare are higher priorities for the new president. But these are the issues that will likely be debated over the next few years:"

It does give marketers a lot to think about though.

The full article is located here



Kevin.

[opportunitiesaplenty]

Originally Posted by schabotte

Does hearing talk like that from elected govt. officials really surprise you?

Add to that the rumblings of the 401K retirement programs that are going on now as shown in this LA Times story:

Calls grow to overhaul 401(k) retirement plans - Los Angeles Times

We're definitely in for some interesting times here in the states as govt scrambles to get more income because to cut its size/layoff unproductive staff would be the greatest heresy a politician can contemplate.

a. Not anymore
b. I agree with everything else you've said

Why the dodos (notice how well those creatures did in the evolutionary course of events) in Congress can't understand that eliminating the tax deduction for advertising will cause business to cut way back or eliminate their ad spend, thereby lowering sales and reducing other tax revenues, such as the income taxes from the workers that had to be laid off, is beyond me. Our legislators just can't seem to grasp the simplest of facts.

[Andyhenry]

At least it's a change from trying to tax us on Internet usage.

Who really cares what they do? If it affects everyone then it'll ultimately be an opportunity in disguise.

[mjbmedia]

Presume thats in the USA only then? they dont make our laws here in the UK, well not yet anyway.

Dont honestly see how they can really do that, the WWW is worldwide and as much as some Americans like to think they own it, they dont.

[DavidO]

It's so absurd that it will never become law... but just in case, you should have contingency plans for establishing your business in a more business-friendly jurisdiction. It's not that difficult and ecommerce offers many advantages in this area.

[MikeAmbrosio]

Originally Posted by mjbmedia

Presume thats in the USA only then? they dont make our laws here in the UK, well not yet anyway.

Dont honestly see how they can really do that, the WWW is worldwide and as much as some Americans like to think they own it, they dont.

Oye - here it comes...didn't take long either.

[opportunitiesaplenty]

Originally Posted by davebo

Eliminating the tax deduction for advertising? It's not like it's some "Special" deduction, it's a business expense. And business expenses reduce profits...and you pay taxes on profits. If they eliminate a deduction for advertising, they should do it for 'entertainment expenses' as well. And if they do that, why not everything else.

I'm sure the greatest minds in the U.S. Congress are even now feverishly trying to find a way to do just that.
It never ceases to amaze me (although it should have long ago) how legislators feel as though taxing businesses is the best way to increase national prosperity. Look at Ireland; lower business tax rates caused a huge upsurge in national prosperity. In many cases lower rates equate to much increased revenue, but why do that when you can just strangle the egg laying goose??

The ban on cookies could be a huge problem as well, although it will open to doors to develop other,possibly better forms of tracking affiliate sales. This could depend on how the law is written and interpreted. It may deny all such forms of tracking, no matter the implementation. Even if new forms of tracking are developed, can you imagine having to go back to every web page and blog post with an affiliate link and replace it?

The stupidity of such an action would be tremendous, but it wouldn't be the first time the law unintended consequences got in the way of hamfisted legislators.

[mjbmedia]

Originally Posted by MikeAmbrosio

Oye - here it comes...didn't take long either.

haha only joking.

But seriously dont see how they can even hope to make it 'law' on the whole of the internet.
Mind you, double opt ins spring to mind, though not law its kind of common wouldnt you say?

[garyv]

Did any of you notice Google's CEO in Obama's big infomercial? Legislation like this would decimate Google. I'm only a small player, but I've bought over a million dollars in ads from them, and the only way that it could be remotely possible is because it was tax deductible.

With Google's CEO so close to Obama's ear - I think he'll be putting on a lot of pressure to keep tax collectors out of his pocket.

[bgmacaw]

Originally Posted by mjbmedia

Presume thats in the USA only then? they dont make our laws here in the UK, well not yet anyway.

Well, the Beatles did write Taxman about UK taxes but it applies in other countries as well.

Should five percent appear too small
Be thankful I don't take it all
'Cause I'm the taxman

[Paul Hancox]

NEWSFLASH!!! - Lawmakers May Decimate Internet Marketing

First of all, great headline... you got my attention easily enough

I don't know how they could eliminate advertising as a business expense... that would be just plain stupid, as MOST businesses rely on some form of advertising to get the word out about their stuff.

The only way they'd introduce something like that is if they wanted to KILL the economy.

As for cookies, they won't eliminate them, but I could foresee some stupid regulation requiring site owners get permission before they're used.

It would kind be, "Check this box to allow us to remember you." You might do that if you were logging into Gmail, but for a sales letter? Doubtful.

That would screw up a lot of things as well as affiliate tracking. Any script that relied on cookies would be f... uhh, mucked up.

[SteveJohnson]

Originally Posted by Andyhenry

At least it's a change from trying to tax us on Internet usage.

Who really cares what they do? If it affects everyone then it'll ultimately be an opportunity in disguise.

Because many times, it does NOT affect everyone. Case in point was the US tax a few years ago on luxury items (over a certain price threshhold - can't remember what it was, but substantial).

The tax decimated the luxury boat industry and cost several thousand workers their jobs, and several companies went under because the 'rich' people wouldn't buy something when it had that outrageous amount of tax on it. Congress thought they were going to rake in millions...

Their reaction? "Ooops."

[admin]

The person that turns this thread into some political fight is going to be banned from the forum.

Really tired of threads about writing, spelling or marketing getting turned into "who won what war" debates...all countries are run by morons, liars and thieves so none of your opinions are 100% true anyway.

Leave it for somewhere else or you'll be leaving..

[schabotte]

Originally Posted by opportunitiesaplenty

I'm sure the greatest minds in the U.S. Congress are even now feverishly trying to find a way to do just that.
It never ceases to amaze me (although it should have long ago) how legislators feel as though taxing businesses is the best way to increase national prosperity. Look at Ireland; lower business tax rates caused a huge upsurge in national prosperity. In many cases lower rates equate to much increased revenue, but why do that when you can just strangle the egg laying goose??

The stupidity of such an action would be tremendous, but it wouldn't be the first time the law unintended consequences got in the way of hamfisted legislators.

You have to remember that they are creating tax code to cater to special interests... and they often do that by burying it in huge omnibus bills that our elected officials probably don't even read... except to be sure that their little bit of pork is in there to keep their special interest contributions coming.

They don't really care about anything except getting reelected and that means pandering to their base and catering to their deep pocket special interest partners.

When the U.S. was founded, I don't think the founders ever imagined the concept of a career politician. Just look at the average number of years served in the U.S. congress in the 1800s vs now.

[opportunitiesaplenty]

I'm actually more worried about the possibility of changing the tracking cookie. The average consumer has little concept of the cookie, and (I'm not basing this on any research) would probably think they were bad. Many anti virus programs flag them as problematic and could possibly contribute to Joe/sephene consumer's outlook. In addition, few consumers are even aware of the existence of affiliate marketers. It would be easy to paint them as undesirable, or a possible risk to privacy, especially with the rise in ID theft.

If any law regarding cookies were to be passed, some smart entrepreneur will get a copy of the legislation and see what is allowed regarding tracking. There will be some way to pass affiliate information. Another possibility would be for each affiliate link to direct traffic to a custom page where they got credit for the sale. Server space is cheap and declining, but that would still create a situation where vendors would be forced to limit the number of affiliates, and those with large large numbers of product on their sites would have a problem.

The bottom line is that there is a huge and growing amount of money at stake here. According to InternetRetailer, aggregate ecommerce sales for 2007 reached $166 billion. This doesn't count service sales (a huge category in itself) or downloadable information products. Greater minds than mine will find a way to facilitate continuing a market this large. Many very large companies are heavilly invested in tracking technology in one for or another. Given that, it probably won't go away any time soon, but if it is modified, there will be opportunity. Maybe the next Internet gazillionaire will be some warrior who develops the new generation of tracking technology.

[Lance K]

Won't happen.

If anything, it's a ploy so that you don't feel as affected once they make a smaller bonehead change that gets into your pocket. Cuz it will seem like peanuts after talking about this. And people will accept it (some begrudgingly) because they feel as if the gov't has made some sort of concession.

Bottome line...they're simply f#&king with our heads at this point. Baiting the hook.

[SusanUSA]

I don't believe everything I read . . . even on the Warrior Forum

There is no way this could happen! It falls right in line with the "line item veto." Will the laws change to make businesses more truthful about how they are classifying their deductions? That's possible. But eliminating deductions for advertising across the board is highly unlikely.

[Floyd Fisher]

Removing the tax deduction for advertising would be sheer suicide.

You have to advertise in some form or function in order to succeed as a business. No advertising = no business period.

This has got to be a hoax...let me go do some digging.

[Paul Myers]

I've followed the cookie thing for a while. It's primarily focused on things like ad networks that collect data on all sorts of sites and what you do/view on those sites. Nothing I've seen yet has anything to do with single-site cookies like you'd see in a typical affiliate program. It could affect cookie stuffing, which wouldn't break my heart.

The amount of data some of these networks collect on users should scare the hell out of you, if you value your privacy. It's harmless, as long as it's only used to decide what ads to show you, but it's very unlikely that will be its only use in the long run.

The first time this stuff shows up in an insurance case or other legal action, you'll understand why it's a concern.


Paul

[Paul Myers]

Maybe the next Internet gazillionaire will be some warrior who develops the new generation of tracking technology.

[chuckle] Or recycles an old one.

Allen... Remember that very early "affiliate" program you developed? The one that just passed the affiliate ID from one page to the next?


Paul

[Melkor]

It's stuff like this from Charter Communications and Phorm essentially wiretapping your Internet activity and inserting their own ads and affiliate links into your connection that this legislation aims to put a stop to.

Ya think it might be good for us to prevent ISP's from legally hijacking you affiliate commissions? What happens if Comcast or Bellsouth signs up for Commission Junction/Amazon/Clickbank and uses DPI to replace the affiliate links that gets delivered to the surfer on the fly? DPI can do that, you know - and as Claria/Gain/Gator and a whole lot of other corporate spyware/theftware producers have shown, something most corporations are perfectly capable of doing.

You think Mr. Ed "why should Google use my pipes for free" Whitacre would hesitate for a second to hijack the affiliate links of everyone using his network if it was legal for them to get away with it?

It's not us small-timers they're after with this. It's the guys who can potentially rewrite the bitstream that gets delivered to the end-user so what arrives at their computer is nothing like what you sent them.

[Marcus Paul]

I'm surprised that so many people would be surprised by this move. Obama's team is very Internet savvy and they are well-aware of the money being made online. You bet they intend to come after it.

They don't really understand that increasing taxes for businesses means businesses will cut back on that expense, or cut back somewhere else - like jobs.

But really, why are we surprised? He promised more corporate tax hikes when he was campaigning. Now we are going to get it.

Unfortunately the cookie will be killed of within 3-4 years because the privacy people have been screaming about it for several years now. Even though it hasn't hurt a soul, they still want to kill it. After all people are MAKING MONEY with it.

[opportunitiesaplenty]

Originally Posted by Melkor

It's stuff like this from Charter Communications and Phorm essentially wiretapping your Internet activity and inserting their own ads and affiliate links into your connection that this legislation aims to put a stop to.

Ya think it might be good for us to prevent ISP's from legally hijacking you affiliate commissions? What happens if Comcast or Bellsouth signs up for Commission Junction/Amazon/Clickbank and uses DPI to replace the affiliate links that gets delivered to the surfer on the fly? DPI can do that, you know - and as Claria/Gain/Gator and a whole lot of other corporate spyware/theftware producers have shown, something most corporations are perfectly capable of doing.

You think Mr. Ed "why should Google use my pipes for free" Whitacre would hesitate for a second to hijack the affiliate links of everyone using his network if it was legal for them to get away with it?

It's not us small-timers they're after with this. It's the guys who can potentially rewrite the bitstream that gets delivered to the end-user so what arrives at their computer is nothing like what you sent them.

The DPI issue has the huge potential for abuse. Look at the amount of information the big G has on everyone now. If the ISPs can manipulate data as they see fit because you're using their network, there's no telling what can happen. In the old days, all telco equipment was leased from the telcos, including the phones and lines in your home. You were not permitted to alter it in anyway, or install your own. Your conversation was taking place in their domain, and their employees could easily listen in.

The ISPs may very well take a similar view. i.e. your data ceases to be yours once it hits their networks. They're just letting you use the road for a small fee. If they want to capitalize on a revenue stream they perceive as theirs, you can bet they'll try to do just that.

A similar scenario would be this: When traveling on a private toll road every company that had a company vehicle with a logo or sign on the side was forced to replace that sign with one of the road owner's choosing. They would then be able to sell the ad space on every company vehicle that traveled on their road, no matter the desires of the vehicle's owners.

[admin]

Originally Posted by Paul Myers

[chuckle] Or recycles an old one.

Allen... Remember that very early "affiliate" program you developed? The one that just passed the affiliate ID from one page to the next?


Paul

I always think of that when I see threads like this :-)

And what is funny is I can guarantee anyone that that simple script credits far more sales accurately than any cookie or IP tracking script does. I'm positive it reaches virtually 100%...when all is said and done the people who would actually change the number on the end and screw things up is insignificant...

Anyone wondering what we are talking about here's a live example...

http://host4profit.com/cgi-bin/home.cgi?9999

You can change 9999 to anything...

http://host4profit.com/cgi-bin/home.cgi?Allen
http://host4profit.com/cgi-bin/home.cgi?Bob
http://host4profit.com/cgi-bin/home.cgi?Warrior

[Adam Kenzington]

Originally Posted by mjbmedia

Presume thats in the USA only then? they dont make our laws here in the UK, well not yet anyway.

Dont honestly see how they can really do that, the WWW is worldwide and as much as some Americans like to think they own it, they dont.

What do you mean? Did someone sell it out from under us?

That damn Al Gore! Just because he invented it didn't give him the right to sell ownership of it to outsiders!

[Adam Kenzington]

I've been hearing some visious jokes about our precious Barack.

Case in point...

Q. What do Obama, Kennedy and Lincoln all have in common?
A. Nothing, yet.

[travlinguy]

Not sure if this has been mentioned but under the new president look for legislation calling for Federal tax on Internet sales and email. Gotta confiscate some wealth before you can spread it around...