Four major advertising and marketing organizations issued voluntary guidelines today for protecting consumer privacy when marketing to consumers based on their online behavior. Consumer advocates made clear they consider the rules inadequate and will continue to push for legislation limiting collection and use of data about the behavior of Internet users.
The behavioral targeting guidelines were issued by a task force that came together in January in response to calls by the U.S. Federal Trade Commission for stronger voluntary advertising industry action to protect the privacy of Internet users. The four organizations who joined in developing the guidelines are the Interactive Advertising Bureau, Direct Marketing Association, American Association of Advertising Agencies and Association of National Advertisers.
The Council of Better Business Bureaus agreed to work with the DMA to develop accountability programs to promote adoption of guidelines. The self-regulatory program is expected to be implemented early in 2010.
The organizations propose seven principles for marketers to follow. They include requiring marketers to provide expanded notification about the data they are collecting about online users and easier ways for consumers to prevent data about them from being collected and used. The principles also propose increased protection for information about children and for certain health and financial data.
The guidelines could impact online retailers’ ability to present ads to consumers based on their online behavior. In a typical scenario, a consumer may look at a bathing suit at a retailer’s web site and then go to other web sites; the retailer can use an ad network to present that consumer with bathing suit ads on other sites, based on her shopping behavior.
While not requiring consumers to opt in to have such targeted ads presented, as some consumer advocates propose, the guidelines could lead more consumers to opt out by making it easier to do so. Government regulators generally have not expressed concern about targeted advertising within a retailer’s site—for instance, the web merchant promoting a bathing suit to the shopper while she’s still on the retailer’s site—but are concerned about information collected as individuals move around the Internet.
Fetchback, a company that works for retailers, placing an ad when a consumer who has left a retailer’s site goes to another site within its network, has added in recent weeks a link in its ads that allows consumers to get more information about why they are seeing the ad and to opt out of such targeting based on their behavior. The company is following the lead of Google, which began offering such enhanced notification earlier this year, says Chad Little, president and CEO of Fetchback.
He says putting such notification at the point of ad delivery will become the norm, but doubts it will lead to many consumers opting out, because those concerned about privacy can already delete tracking cookies from their browsers. “It will increase the amount of people who opt out, but will it change the underlying economics? I don’t think so,” Little says.
The behavioral targeting guidelines released today are needed because of the way the Internet has revolutionized advertising, says Nancy Hill, president and CEO of the American Association of Advertising Agencies. “Today, we can match the content of an ad to the interests of the consumer in ways undreamed of just a few short years ago,” Hill says. “We will, of course, be able to continue this interest-based advertising only if we maintain the public`s confidence that we are responsible stewards of the data on which it is built. The self-regulatory principles being announced today represent a giant step forward in sustaining that consumer confidence.”
FTC chairman Jon Leibowitz welcomed the release of the principles, while leaving open the possibility of additional regulation. “Although we are still reviewing the details of the new guidelines, I am encouraged that so many trade associations and their member companies have participated in this process,” Leibowitz said in a statement. “The commission’s goal is to promote meaningful consumer protection and choice in this area as well as to ensure that consumer protections are accessible and understandable to all consumers. The FTC will evaluate the new industry guidelines from that perspective.”
However, consumer advocates responded that privacy guidelines should be written into law, and not be voluntary.
“Some of the aspects of the self-regulatory guidelines are encouraging, but on the whole I found them disappointing, and certainly they’re not a substitute for a strong and enforceable law,” says Susan Grant, director of consumer protection for the Consumer Federation of America. She says far more personal information should be considered sensitive and subject to stricter protections, such as sexual orientation, political activity and ethnicity. “We’ve also called for a do-not-track registry similar to do-not-call, so consumers if they wish have an option to say they don’t want to be tracked in one fell swoop rather than having to tell different entities at different times,” Grant says.
Jeff Chester, executive director of the Center for Digital Democracy also rejected the guidelines as not going far enough to protect privacy. “More links to better-written privacy statements don’t address the central problem: the collection of more and more user data for profiling and targeting purposes,” Chester wrote in a blog posting. “There needs to be quick congressional action placing limits on the collection, use and retention of consumer data; opt-in control over profile information; and the creation of a meaningful sensitive data category. Consumer and privacy groups intend to work with Congress to ensure that individuals don’t face additional losses due to unfair online marketing practices.”
Here are the seven principles issued by the coalition of advertising and marketing groups:
* Education: the digital media industry intends to educate consumers about online behavioral advertising with a campaign expected to exceed 500 million online advertising impressions over the next 18 months.
* Transparency: Clearer and more accessible disclosures about data collection and use, including enhanced notice on the pages where data is collected through links embedded in or around advertisements or on the web pages.
* Consumer control: expanded ability for consumers to choose whether data is collected and used for online behavioral advertising, available through a link from the notice on the web page where data is collected.
* As part of greater consumer control, Internet service providers, other service providers and suppliers of software such as web browser toolbars will have to obtain consent of users before engaging in online behavioral advertising, and to prevent data from being linked to an individual’s identity.
* Data security: organizations must provide reasonable security for data collected for online behavioral advertising, and retain it only for a limited time.
* Sensitive data: data about children under 13 should be collected only with parental consent, and there are stronger protections for certain health and financial information.
* Accountability: calls for programs to monitor and report to appropriate government agencies failure to comply with the guidelines. The Direct Marketing Association and Council of Better Business Bureaus have agreed to work together on developing such programs.
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