Ad Groups Move to Regulate Web Tracking

Key industry groups involved in Internet advertising are adopting a sweeping slate of consumer privacy measures in an effort to forestall legislation surrounding ad-targeting based on tracking online user behavior.

The groups include the American Association of Advertising Agencies (the 4A’s), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB). The groups also said the Council of Better Business Bureaus (BBB) had signed on to work with the DMA in implementing accountability programs to promote widespread adoption of the new guidelines.

The groups said it’s the first time that representatives of the entire advertising ecosystem — agencies, advertisers and ad technology players — have joined forces to develop rules for the use and collection of consumer data.

Their work has resulted in a set of principles that aim to better communicate to consumers exactly what information advertisers are collecting on them and provide ways for them to manage collected information, or to opt-out of tracking.

Those principles, in turn, will guide the development of industry practices, the groups said. The effort is expected to go into effect at the beginning of next year.

“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,” Nancy Hill, president and CEO of the 4A’s, said in a statement. “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.”

It’s a move that comes amid increasing scrutiny among U.S. legislators for online ad practices — especially those concerning user-tracking and the retention of behavioral data. Last month saw further efforts by Congress to probe the online ad industry’s practices when it comes to compiling information about users’ Web activities to serve targeted ads.

Meanwhile, the House is inching forward on a privacy bill that could mandate specific “baseline protections” for consumers’ online data, according to comments made by Rep. Rick Boucher, D-Va., the chairman of the Subcommittee on Communications, Technology and the Internet, who’s likely to introduce the bill before the end of the year.

As a result of the growing legislative momentum, the industry is striking the first blow — but moving to clamp down on its own activity.

“Although consumers have registered few if any complaints about Internet privacy, surveys show they are concerned about their privacy,” IAB President and CEO Randall Rothenberg said in a statement. “We are acting early and aggressively on their concerns, to reinforce their trust in this vital medium that contributes so significantly to the U.S. economy.”

Self-regulation principles

The principles introduced today by the trade groups take aim at a number of areas where consumer advocates and lawmakers have criticized industry practice.

With the guidelines in place, the groups said consumers will be able to choose to opt out of data collection through a link on the Web page where data is collected.

Online ad firms also must provide reasonable security for collected data and “limited,” though undefined, retention periods. Behavioral ad data collected from children also requires parental consent, while non-anonymous health and financial data will require higher protections, according to the principles.

One guideline in particular impacts ISPs and application developers, requiring them to obtain user consent before engaging in online behavioral advertising. They’re also required to “take steps” to anonymize the data they collect.

That principle calls to mind the controversy surrounding NebuAd. The firm — now no longer operating in the U.S. — aimed to supply ISPs with a hardware appliance enabling them to track their subscribers’ online activity, and then sold the collected data to participating Web sites, which could then target ads to individual users.

The guidelines also call for organizations to help educate consumers and businesses about online behaviorally targeted advertising. According to the groups, the industry will commit at least 500 million online ad impressions to an educational campaign running through next year.

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