Report: Ad Networks Adhering to Strict Privacy Guidelines

Consumers must opt-in for collection of sensitive data, like health

In a perfect world, the Network Advertising Initiative's annual compliance report would have come out before 60 Minutes trashed the data tracking and collection on the Web for interest-based advertising.

The report details how 88 Internet ad networks like Google, Yahoo, AOL and Microsoft comply with the organization's strict self-regulatory privacy code to ensure that consumer choices are honored and data privacy is protected. It dispels, in part, many of the myths that tracking on the Web is completely lawless and unregulated.

While the 88 ad networks don't cover all of the ad networks that place advertising on the Web, the NAI's members are the largest and represent a significant portion of the marketplace. Next year, the report will include 100 ad networks.

"In completing the compliance process, we demonstrate to regulators, business partners and consumers that membership in the NAI is not a mere promise to meet high standards," said Doug Miller, global privacy leader of AOL and chairman of the NAI board of directors.

To comply, ad networks met very specific standards of the organization's self-regulatory code, which requires the companies to publicly post data collection and retention practices and give consumers the opportunity to opt out of tracking.

Companies also agree to only use data for marketing purposes and comply restrictions with the restrictions on personally identifiable and sensitive information, such as health.

Last year, responding to trillions of monthly impressions of the industry's ad choices icon on ads, more than 3.9 million consumers visited NAI's site where they could opt out of tracking.

But not all data collected is opt-out. For the most sensitive data, consumers must opt in.

For example, NAI-compliant ad networks do not collect sensitive health information unless a consumer opts in to allow it.

This year's updated code will go even further, requiring ad networks to use opt-in consent for sexual orientation. The new mobile code, slated to go in effect in 2015 requires opt-in consent for location data.

Marc Groman, the president and CEO of the NAI said he is troubled by reports like the one that aired on 60 Minutes last Sunday. "Asking questions is a good thing, but I'm concerned when there is a lack of precision or when a report presents a one-sided story," he said.

Not that there isn't room for improvement in the industry. "It's not intended to solve everything. There will always be bad actors that push the envelope and engage in practices that disturb people," Groman said.

Even if the Federal Trade Commission were granted broader authority by Congress to police privacy, the agency wouldn't be able to roll up all the violators, explained Groman, a former FTC official.

"When self-regulation works effectively, it's a win for consumers and industry and regulators that have limited enforcement resources," Groman added.

Recommended articles