NEW YORK Internet advertising could look and feel a whole lot different in 2010.
Looking to get out in front of potential regulation from the U.S. Government, a consortium of marketing and media trade organizations has unveiled a set of self-regulatory principles for behavioral targeting. Among other things, the rules call for nearly every Internet ad that uses consumer data to clearly identify that it does so — either via a universal logo or associated Web link.
The principles are being jointly issued by the American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association, the Interactive Advertising Bureau and the Council of Better Business Bureaus. These are the same groups that vowed to work together on these issues last January. The groups have laid out seven principles that would theoretically take effect by early 2010.
The set of influential trade organizations — which are also being joined by various ad networks (including the Network Advertising Initiative) and Internet service providers — have been working in concert since last year in response to a similar set of principles issued by the Federal Trade Commission in late 2007, which urged the industry to regulate itself. Since that time, the urgency to get out front of this issue has increased since a new administration took office in amid a highly pro-regulatory environment.
The groups have not been timid in their approach to self-regulation. For example, the aforementioned Transparency Principle “requires the deployment of multiple mechanisms for clearly disclosing and informing consumers about data collection and use practices associated with online behavioral advertising,” per the groups’ jointly issued report. “Compliance with this principle will result in new links and disclosures on the Web page or advertisement where online behavioral advertising occurs.”
In other words, next year consumers will likely see some sort of behavioral targeting disclosure notice or link alongside Web-based ads. Plus, the group’s “Education Principle” calls for a massive promotional campaign to educate consumers about behavioral targeting, with IAB publishers committing at least 500 million free ad impressions over an 18-month period. A Web site will be established to serve as a consumer information hub on behavioral ads.
If this initiative goes as planned, Web consumers will be given numerous opportunities to opt out of behavioral targeting — as a result of the group’s “Consumer Control Principle.” Both Web sites and third-party data collectors will be required to provide easy ways for users to choose not to have their data collected.
Other principles cover issues such as data security, accountability and principle enforcement — which will likely be handled by the BBB.
Stuart Ingis, counsel at the law firm Venable LLC — which specializes in global marketing law and has worked with the IAB in the past — said he believes the principles go above and beyond what many in the industry expected, and thus should be well received by the FTC. “This is really stepping up,” he said. “We think we’ve moved the ball here considerably for consumers. We studied every word of the [FTC’s 60-page self-regulation report] and it’s all in there. We think this meets and in some cases exceeds their recommendation.”
So far, the FTC appears to approve. “These associations have invested substantial efforts to actually deliver a draft set of privacy principles which have the potential to dramatically advance the cause of consumer privacy,” said FTC commissioner Pamela Jones, in a statement. “I commend these organizations for taking this important first step. I am hopeful that successful implementation will follow.”
Still, Ingis downplayed the role regulatory fear played in bringing this project to fruition, saying that such pressure only sped up a process that was inevitable. “This is forefront thinking,” he said. “All the players realize how important this is.”
Indeed, Web publishers clearly have a vested interest in protecting behavioral targeting — as some worry that regulation could cripple their ad businesses down the road.
Anne Toth, Yahoo’s head of privacy and vp of policy, who provided testimony on behavioral targeting practices before Congress last month, issued a statement praising the initiative: “At Yahoo, interest-based advertising supports our ability to deliver world-class products and services for free to users, and we earn the trust of our users each and every day by respecting and protecting their privacy.”
Going forward, the various groups will hammer out logistics, such as what form the behavioral targeting notification mechanism will actually take.
What about consumer reaction? Won’t tons of Web users start opting out of behavioral targeting as soon as they have the option? Ingis doesn’t think so. “There will be some [who take an active opt-out approach],” he said. “There are people who will make that choice. But it will be small.”