Ad Industry Backs Form of Opt-In For Behavioral Ads

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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 Google's and Yahoo!'s of  the world, as well as ISPs.

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 which already has a template in its Children's

Advertising Review Unit.

The seven princples 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: Calls 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: Calls 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 provides 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: Requires "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: Calls for organizations to provide reasonable security for, and limited retention of data, collected and used for online behavioral advertising purposes;

*Material Changes: Calls 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: Recognizes 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 and;

*Accountability Principle: Calls 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 targetted 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.

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