Advertising and Marketing

Ad Industry Backs Form of Opt-In for Behavioral Ads

New self-regulatory guidelines offer Web users more control over online behavorial advertising 7/02/2009 05:01:00 AM Eastern

Major advertisers and their agencies have agreed to give Web
surfers more control over behavioral advertising. They also say that control
should apply to ads serviced by the Googles and Yahoos! of the world, as well
as Internet service providers.

That is according to new self-regulatory guidelines issued
today by the major advertising trade associations, the American Association of
Advertising Agencies (4A's), the Association of National Advertisers (ANA), the
Direct Marketing Association (DMA) and the Interactive Advertising Bureau
(IAB).

The guidelines include "requir[ing] 'service
providers,' a term that includes Internet access service providers and
providers of desktop applications software such as Web browser 'tool bars,' to
obtain the consent of users before engaging in online behavioral
advertising."

That would be at least some variant on the
"opt-in" model of consent, though just what variation is unclear
since obtaining consent for each ad could produce a problematic surfing
experience. It could be obtaining an all-or-nothing consent for behavioral
advertising, or perhaps an "all-or-something," with the ability for
surfers to pick or exclude categories. The devil will be in the details as the
guidelines are implemented.

The groups said the guidelines would be in place by the
beginning of 2010 and enforced by industry bodies created by the DMA and
Council of Better Business Bureau, the latter of which already has a template
in its Children's Advertising Review Unit.

The seven principles of the Self-Regulatory Program for
Online Behavioral Advertising essentially correspond to the Self-Regulatory
Principles for Online Behavioral Advertising (hence the almost identical name)
proposed by the Federal Trade Commission in February 2009
.

At the time, then commissioner and now Chairman Jon
Leibowitz warned that "the industry needs to do a better job of
meaningful, rigorous self-regulation, or it will certainly invite legislation
by Congress and a more regulatory approach by our Commission."

The ad industry's new self-regulatory principles are:

"Education:
[C]alls for organizations to participate in efforts to educate individuals and
businesses about online behavioral advertising. To this end, the digital media
industry intends, in a major campaign that is expected to exceed 500 million
online advertising impressions, to educate consumers about online behavioral
advertising, the benefits of these practices and the means to exercise choice, over
the next 18 months.

"Transparency:
[C]alls for clearer and easily accessible disclosures to consumers about data
collection and use practices associated with online behavioral advertising. It
will result in new, enhanced notice on the page where data is collected through
links embedded in or around advertisements, or on the Web page itself.

"Consumer Control: [P]rovides consumers with an expanded ability to choose whether data is
collected and used for online behavioral advertising purposes. This choice will
be available through a link from the notice provided on the Web page where data
is collected.

"Consumer Control:
[R]equires ‘service providers,' a term that includes Internet access service
providers and providers of desktop applications software such as Web browser ‘tool
bars,' to obtain the consent of users before engaging in online behavioral
advertising, and take steps to de-identify the data used for such purposes.

"Data Security:
[C]alls for organizations to provide reasonable security for, and limited
retention of data, collected and used for online behavioral advertising
purposes.

"Material Changes:
[C]alls on organizations to obtain consent for any material change to their
online behavioral advertising data collection and use policies and practices to
data collected prior to such change.

"Sensitive Data:
[R]ecognizes that data collected from children and used for online behavioral
advertising merits heightened protection, and requires parental consent for
behavioral advertising to consumers known to be under 13 on child-directed Web
sites. This Principle also provides heightened protections to certain health
and financial data when attributable to a specific individual.

"Accountability
Principle
: [C]alls for development of programs to further advance these Principles,
including programs to monitor and report instances of uncorrected
non-compliance with these Principles to appropriate government agencies."

The FTC and Congress have put pressure on the ad industry to
better notify consumers when their Web surfing information is being used to
create profiles for targeted advertisers or being re-used for other purposes.

FTC
Commissioner Pamela Harbour, for one, praised the new
principles. "Consumers deserve transparency regarding the collection and use of
their data for behavioral advertising purposes," she said in a release
announcing the guidelines. "I am gratified that a group of influential
associations--representing a significant component of the Internet community--has
responded to so many of the privacy concerns raised by my colleagues and
myself."

Those concerns have been increasingly raised on Capitol
Hill, where House Communications Subcommittee Chairman Rick Boucher (D-Va.) is
preparing an online privacy bill. At a hearing on
the bill two weeks ago, the ad industry telegraphed that they were almost ready
to unveil the guidelines
, but also said a strict opt-in regime imposed from
Washington
could pose a "profound risk" to ad supported services, and could
impair the consumer surfing experience, which could in turn "uproot"
the revenue model.

Jeff Chester of the Center for Digital Democracy and a
leading voice for more government oversight of online marketing, at the time
countered that self-regulation has failed to this point, and that in any case,
it would only be as good as the legislation that stood behind it.

Boucher suggested such self-regulations could be made part
of his eventual bill.

March