The advertising community has worked hard these past four months to roll out an online privacy self-regulation program. So when Sen. John Kerry, D-Mass., introduced his Commercial Privacy Bill of Rights yesterday, executives were disappointed that the bill favors government regulation over the idea of letting the industry police itself. Some even think the bill could do more harm than good.
"If there is a blanket mandate on privacy overall, it changes the model completely…Ads will be pointless," said Steve Minichini, president of interactive marketing for TargetCast.
Few people were comfortable lambasting the bill outright (since there is still plenty of opportunity to lobby for changes), but the consensus was that legislation is premature, that the industry's self-regulation program hasn't been given enough time to work.
The bill gives the Federal Trade Commission "far too much discretion in drafting and implementing rules," said Mike Zaneis, general counsel for the Interactive Advertising Bureau.
Just the idea that the FTC may be stepping in could have unintended consequences for the DAA's self-regulation program, Dan Jaffe, executive vice president of the Association of National Advertisers, argued.
"We've set up a system; now they are going to replace it with the FTC. It basically undermines the momentum that is behind the [self-regulation] effort. If people don't know what the rules will be, then they tend to wait," Jaffe said. "This is exactly the kind of area where Congress should wait and gain more information. That point has not been reached."
A privacy self-regulation program led by the Digital Advertising Alliance picked up momentum last December when both the FTC and the Commerce Department scolded the industry for not moving fast enough. Since then, more than 5,000 companies have agreed to comply with the program, said John Montgomery, COO of GroupM Interaction and the chairman of the American Association of Advertising Agencies privacy committee.
"It's dangerous to mess with something that is working so well," Montgomery said. "What harm has been caused by behaviorally targeted advertising?…They smother us with the same blanket as credit card fraud and identity theft."
By law, the FTC already has enforcement authority if a company that has agreed to comply with the DAA's self-regulation program backslides.
"The consequence of those that fall out of the guidelines is that no advertiser will give them money," Minichini said. "That's more scary than any FTC kind of penalty for falling outside government-mandated guidelines."