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June 25, 2008
IAB President Randall Rothenberg Testifies at House Small Business Committee Hearing

Randall Rothenberg, President and CEO of the Interactive Advertising Bureau testified as an expert witness about the critical role that Internet advertising plays for small businesses in the U.S. economy during the U.S. House of Representatives Small Business Committee Subcommittee on Regulations, Healthcare and Trade hearing.

The IAB is the trade association for the interactive media industry in the United States. It represents hundreds of small interactive publishers and provides a voice for them in Washington, D.C. on important legislative and regulatory issues.

“Small business Web sites are the Mom & Pop grocery stores of the World Wide Web. Just as the local retailer anchors a geographic community, these sites anchor communities of interest that span towns, cities, states, even nations,” stated Rothenberg. “They do this with their content and they finance their content through advertising.”

Interactive advertising revenues totaled more than $21 billion in 2007 and were estimated at $5.8 billion in the first quarter of 2008, up 18.2 % over the same period in 2007. Small companies’ share of online ad spending in search engines is more than double the share of medium or large companies, according to the research firm Outsell, Inc. Research done by the consulting firm Booz & Co. for the IAB, the Association of National Advertisers, and the American Association of Advertising Agencies shows that 40% of IAB members’ revenues comes from local businesses.

According to the Pew Internet & American Life Project, more than 32 million American adults have used online classified ads for selling or buying. eBay, the best known auction site, says 768,000 small businesses across the U.S. use this online marketplace as their primary or secondary marketing channel. There are more than 112 million blogs worldwide; in the U.S., as of July 2006, some 12 million American adults, about 8% of the American population, were publishing their own blogs, which were being read by 57 million others, according to Pew.

“Millions of people are making their livings creating and operating Web venues that house well-targeted advertisements, but these entrepreneurs are being threatened by the specter of unnecessary government regulation that would destroy or severely limit their ability to advertise their wares and services online,” said Rothenberg.

Proposals are currently before the United States Congress and several state legislatures that would constrain online advertising. “The IAB believes that the proposed regulations would have a disproportionately negative impact on small publishers whose advertising sales are largely or entirely managed by ad networks, and that government must be prudent in ensuring that no regulation is drawn that would curtail interactive advertising’s potential to continue to support small business owners,” Rothenberg said.

Recently, the IAB opened a new class of membership for small interactive publishers that offers small publishers special pricing for IAB events, training programs, access to networking events around the country, business insurance and protection programs, and membership to IAB’s new Small Publisher Committee.

Read Randall Rothenberg's testimony before the House Small Business Committee.