The system is part of a broader push by Madison Avenue and the Internet industry to develop stricter self-regulation, in part to protect consumers’ privacy online. The self-regulatory push is aimed at warding off federal regulation of the $23 billion-a-year online-advertising industry.

“What we are really talking about here is trying to make the interactive advertising supply chain much more visible, more transparent to consumers, so that they have a much better ability to understand what is going on, and act on it,” says Randall Rothenberg, chief executive of the Interactive Advertising Bureau, a trade group of more than 460 media and technology companies, including Google Inc. (GOOG), Microsoft, Facebook and Yahoo. A coalition of trade groups, including the Council of Better Business Bureaus and Direct Marketing Association trade group, is leading the effort.

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Noting the new guidelines have created a “firestorm of controversy within the ad-supported interactive-media industry,” Interactive Advertising Bureau President Randall Rothenberg suggested the FTC rescind the new guidelines.

“These revisions are punitive to the online world and unfairly distinguish between the same speech, based on the medium in which it is delivered,” he wrote in an open letter to the FTC on Thursday. The online-advertising trade group suggested the FTC try a do-over, after opening up the issue for discussion with bloggers and online advertisers…

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That’s one takeaway you can draw from a new study commissioned by an Internet publishing trade group, which concludes, astonishingly, that Internet publishing is an important and vibrant industry.

The data are being served up via the Interactive Advertising Bureau, which tells us the advertising-supported Web industry “directly employs more than 1.2 million Americans with above-average wages in jobs that did not exist two decades ago, and another 1.9 million people work to support those with directly Internet-related jobs.”

Note the “advertising-supported” modifier in the above paragraph, because that’s the real thrust of the IAB’s study/press release: The trade group is trying to get Congress and Washington to let members like Google (GOOG), Yahoo (YHOO) and Time Warner’s (TWX) AOL regulate themselves when it comes to hot-button issues like behavioral targeting.

Hence this quote from IAB boss Randall Rothenberg: “By understanding the total contribution of the Internet to the U.S. economy, we can more accurately assess the impact of potential legislative changes on the Internet’s operations, particularly the consequences of any actions that would alter ad-supported business models.”

OK. Fine. But regulation is tomorrow’s problem. Today, let us celebrate the fact that some of us have jobs! And also, according to the IAB, we’re providing the following:

• Universal access to an almost unlimited source of information
• Increased productivity (output per unit of capital or labor, or increased consumer utility at a lower cost)
• Innovation in business practices, consumer behavior, commerce and media
• Empowerment of entrepreneurs to start small businesses, find customers and grow
• Environmental benefits derived from saving natural resources lowering pollution through the reduced use of petroleum-based fuels and paper

Cool, right? And all this time I thought I was just blogging. You’re welcome! And please keep reading.

[Image credit: respres]

The opportunity: The Interactive Advertising Bureau’s numbers for the fourth quarter of 2008–remember all the way back then? If you do, then you won’t be shocked to see that Web advertising slowed way, way down during the last three months of the year. And it did much worse than that at some shops, like Time Warner’s (TWX) AOL.

If you’re a professional optimist, like the IAB’s Randall Rothenberg*, you’ll note that ad dollars are still moving from offline venues to the Web, which makes sense, because that’s where people’s eyeballs have moved. For the year, Web ads grew 10.6 percent, while the overall ad market contracted by 2.6 percent.

But the sourpusses among us will note that Web ads ground to a halt at the end of the year. The IAB says U.S. Web ads grew a mere 2.6 percent during Q4, to $6.1 billion. The year before, they had grown at a 24 percent clip.

Here’s a sector-by-sector breakdown of last year’s market. No surprise: The lion’s share of the business goes to Google (GOOG), as it does every year. (Click to enlarge).

Side note: The video ad market, which was supposed to be a geyser, still has yet to be unleashed, despite the best efforts of YouTube, Hulu, et al. Advertisers spent just $734 million on digital video–about three percent of the market. Positive spin: That’s more than twice the amount they spent in 2007.

* Prior to his career as a professional optimist, Randall used to do excellent work reporting on the ad business. Highly recommended: “Where Suckers Moon,” his 1994 book that went behind the scenes during the creation of a Subaru campaign. Great stuff.