Politically Direct Summer 2009: Online Advertising Community Answers Call for Self-Regulation

July 28, 2009 — In response to calls from the Federal Trade Commission (FTC) to develop more far-reaching self-regulatory guidelines for behavioral advertising, DMA and a coalition of key trade groups have released comprehensive privacy principles for the use and collection of behavioral data in online advertising.

The new principles are the result of the work of an unprecedented collaboration representing the entire marketing-media community. For the first time, the majority of the advertising community has come together to develop principles for the use and collection of data in this important area to the economy.

This cross-industry self-regulatory task force consists of the American Association for Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association, the Interactive Advertising Bureau, and the Council of Better Business Bureaus. These ground-breaking efforts began in January 2009 and will most likely be implemented in early 2010.

Online behavioral advertising increasingly supports convenient access to content, services, and applications over the Internet, all of which consumers have come to expect at no cost. In reality, however, content that consumers access online is not free. It is paid for by advertisers, as is most content broadcast through traditional channels such as television and radio.

Utilizing behavioral advertising on the Internet, advertisers will stand a better chance of reaching the most appropriate audience for their products, which makes this form of advertising all the more valuable.

For the consumer, behavioral advertising not only facilitates access to valuable content on the Internet, but also enhances the consumer’s online experience by providing relevant marketing messages and information while reducing random advertisements. Increased relevance to consumers benefits all, as it enables the content provider to reach interested parties with more contextual value, while producing less advertising (and its associated overhead).

Although behavioral advertising on the Internet has become a powerful economic driver of e-commerce, questions have been raised regarding what kind of information should be collected from consumers, how it should be used, and what choices consumers have regarding these practices. In response to these concerns, the self-regulatory task force has developed a program consisting of seven key principles.

Accountability programs to encourage the widespread adoption of these principles will be promoted through the joint efforts of the Council of Better Business Bureaus — a leading organization dedicated to advancing marketplace trust — and DMA, with its 35 years of establishing best practices through DMA’s Guidelines for Ethical Business Practice: a set of mandatory guidelines for DMA members with a proven track record of success.

1. The Education Principle calls for organizations to participate in efforts to educate individuals and businesses about online behavioral advertising. To promote this educational effort, over the next 18 months, the digital media industry will launch a major, widespread online campaign, educating consumers about online behavioral advertising, its benefits, and how they can exercise choice.

2. The Transparency Principle calls for clearer and more easily accessible disclosures to consumers about data collection and use practices associated with online behavioral advertising. It will result in new, enhanced notices on the page where data are collected through links embedded in or around advertisements, or on the Web page itself – where online behavioral advertising occurs.

3. The Consumer Control Principle provides consumers with expanded ability to choose whether or not data are collected and used for online behavioral advertising purposes. This principle requires “service providers” (including 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 to take steps to de-identify the data used for these purposes. Consumers will be able to exercise choice by clicking on a link provided on the page where data are collected.

4. The Data Security Principle calls for organizations to provide reasonable security for, and limited retention of, data collected and used for online behavioral advertising purposes.

5. The Material Changes Principle calls on organizations to obtain consent for any material change to their policies regarding online behavioral advertising data collection and use policies and practices for data collected prior to such change.

6. The Sensitive Data Principle recognizes that data collected from children to be used for online behavioral advertising merits heightened protection, and requires parental consent. This principle applies to behavioral advertising aimed at Web-users known to be under 13 who visit child-directed websites.

The principle also provides heightened protection to certain health and financial data when such data is attributable to a specific individual, including consent for the collection of Social Security numbers or medical records about a specific individual for online behavioral advertising purposes.

7. The Accountability Principle calls for the development of programs to advance these principles, including programs to monitor and report instances of uncorrected non-compliance to appropriate government agencies. To fulfill this principle, DMA and the Council of Better Business Bureaus will work cooperatively to establish accountability mechanisms.

Going beyond the “Self-Regulatory Principles for Online Behavioral Advertising” proposed by the Federal Trade Commission in February 2009, these principles also address public education and industry accountability issues raised by the Commission.

The release of these principles comes at a pivotal time for the entire online advertising community, as pressure has mounted on Capitol Hill with recent Congressional hearings investigating online behavioral advertising and data security.

DMA and the self-regulatory task force look forward to continuing to work with the FTC as the principles are implemented, encouraged by commentary on the release of the principles from FTC Commissioner Pamela Jones Harbour.

As the principles were released, Harbour commented, “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. I commend these organizations for taking this important first step. I am hopeful that successful implementation will follow. In the meantime, I encourage the entire privacy community to continue a dialogue that places the interests of consumers first.”

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