Industry Groups Band Together In Push for Privacy Self-Regulation

The Jan. 7 re-introduction in the New York State Assembly of the so-called Online Consumer Protection Act is just one reason for those in the online ad industry to support self-regulation tenets, said Mike Zaneis, VP of public policy for the Interactive Advertising Bureau (IAB).

Another, he said, is ongoing pressure from the Federal Trade Commission (FTC).

In that vein, the IAB announced that it and four other organizations — including The Council of Better Business Bureaus (BBB) — are working together to develop privacy guidelines relating to behavioral advertising data collection and use. The IAB and the BBB, along with the American Association of Advertising Agencies (AAAA), the Association of National Advertisers (ANA) and the Direct Marketing Association (DMA) have actually been meeting for many months.

“We decided it was time for us to formally announce our existence and the fact that we are bringing together the entire industry to talk about privacy principles,” Zaneis said. He pointed out that the coalition of marketing and advertising associations, as well as the BBB, “for the very first time” brings together not just the IAB’s members, including publishers, portals, search engines and ad networks, but also ad agencies and marketers.

Zaneis said the groups are reacting to the FTC’s call for self-regulation principles in the behavioral advertising space. He noted the FTC, which introduced a draft of its proposed principles about 13 months ago, is expected to soon release an updated version.

Meanwhile, the re-introduction of New York State Assemblyman Richard Brodsky’s bill went mostly un-noticed, said Zaneis. The measure would prohibit Web site publishers and advertising networks from collecting personally identifiable information online, require them to disclose data collection and use practices on their sites, require site publishers to say, on their sites, that they use ad networks, give consumers the ability to “opt-out from any profiling activity” and require ad networks to make reasonable efforts to protect all data they collect.

“The reality is that every publisher and advertiser and ad agency would be defined as a third-party ad network even if they were simply delivering an ad to a Web site,” said Zaneis. “It would put really unpractical notices on those players even when they were only collecting non-identifiable information and using it in aggregate form… It would undermine the operations of the Internet.”

Zaneis and his colleagues strongly believe the online ad industry’s players dare not ignore the potential impact of the measure as well as the FTC action and any other similar government efforts. “There certainly is an imminent threat at both the state and federal levels,” Zaneis said.

The coalition isn’t alone in working toward self-regulation. Last month, the Network Advertising Initiative (NAI) released a final version of its code of conduct for behavioral ads. Among other things, the NAI document restricts the kind of information that can be collected for ad targeting without explicit permission from end users.

“Their principles work well for ad networks but not for publishers and portals,” said Zaneis. “We are very supportive of the NAI. What our group seeks to do is learn the lessons NAI learned as it updated its principles, but the scope of what we are doing is much larger. We are trying to take self-regulation to the entire industry.”

In a statement, ANA President and CEO Bob Liodice said well-executed self-regulation “strikes a balance that both protects the public interest and allows marketers to provide relevant advertising, which is particularly critical during this period of economic downturn.”