Unappreciated Benefits of Advertising and Commercial Speech

Consequences of regulating commercial advertising and marketing will hurt consumer welfare both directly and indirectly.

Federal policy makers, state legislators, and state attorneys general have recently shown interest in regulating commercial advertising and marketing. Several new regulatory initiatives are being proposed, or are already underway, that could severely curtail or restrict advertising or marketing on a variety of platforms. The consequences of these stepped-up regulatory efforts will be profound and will hurt consumer welfare both directly and indirectly. 

The affected platforms range from traditional media (newspapers, TV and radio broadcasters, etc.) to the newest media outlets (the Internet, online ad networks, social networks, video games, mobile devices, and interactive television). This expanded regulatory activism would apply to issues and products including pharmaceuticals, tobacco, alcohol, advertising during children’s television programming, online marketing to children, the loudness of ads on television, product placement marketing and testimonials, and more. Perhaps the most notable of these efforts is the recent push to impose a comprehensive regulatory regime on online advertising and data collection efforts in the name of enhancing consumer privacy. This might include a so-called “Do Not Track” mechanism that would block advertising or data collection through the mandatory reengineering of web browsers.