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Selling Advertising on Local Government Websites
Saturday, June 20th, 2009
Robert Wechsler
Over the last two days, a new-fangled local government ethics
controversy has taken Ohio by storm: allowing counties to sell advertising on their websites. A law to that effect has been inserted in the
pending state budget bill, according to an
Associated Press article.
The rationale is simple: county governments need money and, if ads are okay for buses and bus stops, why not for websites?
The arguments against are just as simple, and were clearly stated in a Cincinnati Enquirer editorial on Thursday.
The arguments against the arguments, especially when made by a company that might lose out, were made yesterday in City Beat:
It is likely that only limited pages of any county website, and even then only of the larger counties' websites, get enough traffic to merit sufficient advertising to make a difference. There will be two sorts of advertisers: (1) the big companies that advertise all over the Internet (as on the Cook County assessor's page: Allstate and Monster), that is, companies with no business in the county; and (2) local businesses that either (a) are big enough or sophisticated enough to consider an Internet presence, such as car dealerships, restaurant chains, and the like; or (b) have something to gain by advertising, and are the only ones that would be willing to pay more than the advertising is worth.
The companies in 2(b) are the ones to worry about. Any law that allows government ads should do all it can to limit or prevent these companies from advertising, because they are the only ones that would be creating conflicts and the appearance of impropriety. However, especially in all but the largest counties, they are also the only ones who would be likely to provide a large revenue stream to the county, because for them advertising is not the usual quid pro quo transaction.
There are various forms of non-commercial advertising that are in the public interest. These forms are discussed in an excellent Los Angeles County Website Advertising and Hotlink Policy, which was promulgated eight years ago.
It is very common for local government websites to have (hopefully nondiscriminatory) lists of local companies with links to their websites, but no actual advertising. Such a list exists in my town, for example. A very small business I own is even listed there, but I won't tell you which one, since this site does not allow advertising.
Another form of this sort of advertising appears in the tourist section of many local government websites. It is, of course, in the public interest for a local government to support the revenues of its businesses, as long as it makes no discrimination among them. But this sort of advertising does not lead directly to government revenues.
Robert Wechsler
Director of Research-Retired, City Ethics
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The rationale is simple: county governments need money and, if ads are okay for buses and bus stops, why not for websites?
The arguments against are just as simple, and were clearly stated in a Cincinnati Enquirer editorial on Thursday.
Conflicts of interest:
Advertising would make counties dependent on a narrow set of
constituents (advertisers)
for a new stream of revenue. There would be at least a serious
appearance of impropriety if a company were to spend thousands of
dollars advertising on the county website while seeking a zoning
variance, a development deal, county contract, or tax abatement.
Lack of public control: Such advertising would give county officials the ability to raise - and spend - money without public control.
Unfair competition: This bill would put the county in direct competition with private businesses, including The Enquirer, that depend on advertising revenue. Such businesses would be paying taxes to the county, which could then use tax revenue to subsidize advertising rates and undercut competition from private businesses.
Lack of public control: Such advertising would give county officials the ability to raise - and spend - money without public control.
Unfair competition: This bill would put the county in direct competition with private businesses, including The Enquirer, that depend on advertising revenue. Such businesses would be paying taxes to the county, which could then use tax revenue to subsidize advertising rates and undercut competition from private businesses.
The arguments against the arguments, especially when made by a company that might lose out, were made yesterday in City Beat:
Conflicts
of interest: Newspapers have the very same conflict of
interest problem. Yes, they're not governments, but they are the fourth
estate, upon which people depend to keep their governments honest. And
yet they accept ads from companies involved in highly controversial
government matters at all levels.
It works so far: No problems have been reported in counties that currently allow advertising on their websites, such as Cook County (IL). [Note: City Beat criticizes the Enquirer for omitting facts; but City Best omits the fact that the only part of the Cook County website that advertises is the assessor's page. So I wonder how much to believe the prevalence of county website advertising or the report that problems have not been reported.] In addition, Ohio counties would be free to prevent companies doing business with the county from advertising. [But shouldn't this be required?]
It works so far: No problems have been reported in counties that currently allow advertising on their websites, such as Cook County (IL). [Note: City Beat criticizes the Enquirer for omitting facts; but City Best omits the fact that the only part of the Cook County website that advertises is the assessor's page. So I wonder how much to believe the prevalence of county website advertising or the report that problems have not been reported.] In addition, Ohio counties would be free to prevent companies doing business with the county from advertising. [But shouldn't this be required?]
It is likely that only limited pages of any county website, and even then only of the larger counties' websites, get enough traffic to merit sufficient advertising to make a difference. There will be two sorts of advertisers: (1) the big companies that advertise all over the Internet (as on the Cook County assessor's page: Allstate and Monster), that is, companies with no business in the county; and (2) local businesses that either (a) are big enough or sophisticated enough to consider an Internet presence, such as car dealerships, restaurant chains, and the like; or (b) have something to gain by advertising, and are the only ones that would be willing to pay more than the advertising is worth.
The companies in 2(b) are the ones to worry about. Any law that allows government ads should do all it can to limit or prevent these companies from advertising, because they are the only ones that would be creating conflicts and the appearance of impropriety. However, especially in all but the largest counties, they are also the only ones who would be likely to provide a large revenue stream to the county, because for them advertising is not the usual quid pro quo transaction.
There are various forms of non-commercial advertising that are in the public interest. These forms are discussed in an excellent Los Angeles County Website Advertising and Hotlink Policy, which was promulgated eight years ago.
It is very common for local government websites to have (hopefully nondiscriminatory) lists of local companies with links to their websites, but no actual advertising. Such a list exists in my town, for example. A very small business I own is even listed there, but I won't tell you which one, since this site does not allow advertising.
Another form of this sort of advertising appears in the tourist section of many local government websites. It is, of course, in the public interest for a local government to support the revenues of its businesses, as long as it makes no discrimination among them. But this sort of advertising does not lead directly to government revenues.
Robert Wechsler
Director of Research-Retired, City Ethics
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