Go to Honolulu's Web site for information on the city council or local elections, and you will encounter something you might not expect to see on a government Web page: an advertisement from Prudential Locations. Link to other pages on the Honolulu site, and you'll see ads for the Bank of Hawaii as well.
While many public officials have been wringing their hands about whether to allow advertising on government sites, Honolulu has quietly taken the plunge to defray the costs of setting up and maintaining its Internet operations. The ads started appearing a few months ago.
Hawaii has been facing tough economic times for nearly the past decade, and Honolulu knew it could not start up an e-commerce portal without a partner. When eGovNet proposed a combination of transaction fees and advertising through a subsidiary called govAds as a way to fund the portal, municipal officials decided to try it. "This is uncharted territory," admits Courtney Harrington, deputy director of the Department of Information Technology for the combined city-county government. "We're going to try to tread lightly but also not let it stop us. We could sit and worry forever and not move forward at all."
All told, the revenues from advertising aren't adding up to much. But accepting ads enabled transaction fees for online commerce to be set lower. "The opportunity presented itself," Harrington says. "I had seen other sites that had advertising. I never stopped to think, `We're a government site, we're different.'"
Many other officials, however, have dwelled deeply on the notion that government sites are different. Most governments have used taxpayer dollars and charged transaction fees, while shying away from advertising. Now, however, they're warily looking at advertising and pondering potential conflicts of interest and concerns over implied endorsements of advertisers' products or services.
So far, the public doesn't seem all that concerned about those issues. Honolulu has received only one complaint about its advertising, saying the ad could be viewed as an endorsement. Harrington disagrees. "In the Internet culture today, seeing an ad on a Web site is not an endorsement. People understand that." In any case, there's a disclaimer that the city/county does not endorse services advertised on the site.
Another government site that will be sprouting ads, perhaps by the end of the year, will be that of Salt Lake City, home to the 2002 Winter Olympics. The city is expected to get a lot of Internet traffic from all over the world in the next two years, and the Web ads can serve as an economic development tool. Likely advertisers will be airlines, hotels and local companies trying to reach world travel and tourism markets.
The New York City Board of Education is now stirring controversy over a plan to use advertising and sponsorship revenue to pay for technology in the schools. The revenues would fund a program that would provide portable computers, Internet service and e-mail to teachers, administrators and students from the fourth grade up, starting in 2001. An Andersen Consulting study recommends that the portal created for the schools be divided into two "zones"--a commercial-free educational Web site and a separate Internet gateway with advertising.
Harold Levy, the schools chancellor, told the New York Times that using advertising to pay for technology programs in New York is "no more troubling than allowing Webster to put its name on the dictionaries we buy." But New York State Senator Velmanette Montgomery isn't reassured by Levy's point of view. "I'm not convinced at all that they will be able to keep children out of the commercial side," she says. "I'm not convinced they want to. I cannot believe they are not factoring in that children will be a part of the market."
With or without children, though, users of government Web sites are a market more and more advertisers are becoming interested in. Tim Bartlett, president and CEO of eGovNet, points out that government sites are highly desirable for advertisers who want to target their messages to a specific audience. "It allows for the first time for advertisers to reach Internet users on a geographical basis," he says.
That attractive audience is one reason that just about everybody involved in the debate agrees there will be pressure on governments to consider advertisements as a way of defraying costs for e-government. The same questions and concerns will come up in jurisdiction after jurisdiction, and the jurisdictions that now have a toe in the advertising waters will be watched closely. "We're breaking new ground," Honolulu's Harrington says. "Obviously the whole subject hasn't shaken out yet. Issues will be raised in the future we haven't thought about."
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