Ad Biz Tries to Convince Senate Dems Self-Regulation Works

Industry's Liodice unveils new data in ad choices program

The advertising industry Thursday rolled out the big guns and new data to defend its self-regulation program for online behavioral advertising to skeptical lawmakers on the Democratic-controlled Senate Commerce Committee.

They had to. Chairman Jay Rockefeller (D-W.Va.) is pushing for a Do Not Track bill. He and the other committee Dems have expressed skepticism in several privacy hearings that the ad industry can police itself to protect online consumer privacy. They’ve embraced recommendations from the Administration that there needs to be baseline privacy legislation establishing a privacy code of conduct or bill or rights.

Taking the witness stand for advertisers, Bob Liodice, president and CEO of the Association of National Advertisers said that the ad choices program, covering 90 percent of the interactive advertising business, was working, giving consumers choice to opt-out of unwanted online ads.

More than one trillion of the ad choices icon is being served each month. More than one million consumers have opted out of ads. To promote the program to consumers, the ad industry’s education campaign and website designed by McCann Erickson Worldwide is generating more than one million uniques a month.

“We have demonstrated the industry can come together,” Liodice said. “With the system we have, we are able to get to cases and principles that the Federal Trade Commission may have missed,” he added.

But Microsoft’s breaking ranks with the industry with its default Do Not Track browser, fueled the skeptics’ conclusion that something more universal needs to be done.

“It’s unclear whether industry self-regulation, by itself, is a viable way to allow users to manage and control data collected and used about them by third parties,” said Alex Fowler, Mozilla’s chief privacy officer, who noted that the ad industry’s self-regulation program was developed only because the government put pressure on it.

Fowler also called the ad industry’s ad icon “confusing” and ineffective. “According to the industry’s own research the number of users who use the icon is low: 0.0035 percent clock, and only 1 in 20 of those actually opt out,” Fowler said.

The industry only got its act together when the government put the pressure on, added Peter Swire, professor of law for The Ohio State University. “We’re seeing industry digging in and doing something right now,” he said.

Liodice characterized the Digital Advertising Alliance’s work on developing the ad choices program differently. “Our self-regulatory mechanism has evolved with the encouragement of the Federal Trade Commission. And with their collaboration, we completed the system,” Liodice said.

GOP members echoed the industry’s fears that the government privacy regulation of the Internet may not be able to keep up with the fast-moving Internet.

“We must proceed cautiously and carefully before diving into any legislation,” said Kelly Ayotte (R-N.H.). “Legislation could be outdated before the ink dries.”

At the end of the hearing, Rockefeller remained unconvinced. “It’s not in their self-interest,” he told reporters. “I don’t trust these companies to do what’s right when they’re up against the bottom line.”

Despite Rockefeller’s enthusiasm for a Do Not Track bill, even he admitted it’s highly unlikely because it’s a low priority on the Senate Leader Harry Reid’s (D-Nev.) scale. “I would like to see a Do Not Track bill this afternoon. If we go to next year, it won’t be because a lot of people don’t want it to happen. It’s so easy, it’s so right. I want the bill,” Rockefeller said.