Ad Groups to Rally Against Federal Privacy Rules

With the launch of a major new self-regulatory framework, advertising groups will be out to prove they're working in good faith to protect consumers' privacy on the Web.

A broad coalition of advertising-industry trade associations plans to launch a new umbrella organization on Monday built around a set of principles to protect consumer privacy online and to demonstrate to federal regulators and Congress that the industry can police itself, according to several sources with knowledge of the effort.

At the center of the new initiative, called the Digital Advertising Alliance, is an icon that will begin appearing alongside ads served on sites across the Web meant to alert consumers that certain information is being collected about them and used to pair ads with users' interests.

The so-called "forward i" logo will be intended to serve as a "universal icon that everyone has to follow," according to a source in the ad industry, who explained that the major trade associations will hold its members accountable for implementing the new system of notice. The icon consists of the lower-case letter "i" inside a forward-pointing triangle, resembling a play button that users can "press to go forward to get more information," the source told InternetNews.com.

"We're trying to be over-literal with the icon so everyone can understand it."

Clicking on the icon will bring up a bevy of information about an ad's origins, including the various networks and servers involved in its placement, and give consumers the ability to opt out of ad networks' profiling systems.

Inaugural members of the new group include the Interactive Advertising Bureau, the American Association of Advertising Agencies and the Direct Marketing Association, among others.

The Digital Advertising Alliance will be headed by Stuart Inges, a partner at the Washington law firm Venable who has led past industry efforts to develop self-regulatory principles.

Broadly, the new organization is meant to establish a commonly accepted mechanism for alerting consumers about the ways that marketers tailor ads to users' activity on the Web, a practice known as behavioral targeting. The hope is that the new tools, along with a set of operating principles grouped around themes like consumer education and transparency, will be sufficient to deter broad-reaching legislative or regulatory efforts to enforce online privacy protections, which industry groups warn could choke off the fast-growing online advertising sector.

Two executives involved in the Digital Advertising Alliance described several meetings with staffers and senior officials at the Federal Trade Commission, saying that the response from the agency had been highly positive.

The timing of the group's launch is no coincidence. Within the next several weeks, the FTC is expected to issue a major report outlining recommendations for protecting consumer privacy online amid a robust advertising industry in which personal data is a form of currency. Chairman Jon Leibowitz and staffers have recently raised the prospect of a nationwide do-no-track list for online advertising, similar to the Do-Not-Call registry that governs telemarketers, a prospect that is anathema to the industry.

Lawmakers in both chambers have also floated legislative proposals, though with Congress adjourned until after the midterm elections, the bills are not expected to move this session.

The more immediate threat is at the FTC, which has historically taken a self-regulatory approach, deferring to the industry to define and adhere to its own best practices, much to the chagrin of privacy advocates such as Jeff Chester, executive director of the Center for Digital Democracy.

In an interview, Chester said that he is skeptical that the Democratic leadership at the FTC will be moved by the new coalition's icon and its self-regulatory principles, saying he expects it to recommend rules for advertisers to make more meaningful disclosures about how information is collected, used and shared.

"For the first time really in more than a decade, the FTC wants to get to the bottom of this problem," he told IntenretNews.com "I think there's a recognition at the FTC that self-regulation hasn't worked and can't work."

But the Digital Advertising Alliance establishes its own monitoring and enforcement mechanism for advertisers and networks to ensure compliance with the disclosure and opt-out requirements.

The effort is launching with a firm called Better Advertising certified as the inaugural provider of monitoring and compliance technology. Better Advertising will process consumers' requests to opt out of behavioral tracking through the program and verify that they have been honored, and will provide information about more than 300 advertising companies when users click through the forward i icon for more information about the ads on a website.

That information is culled from Better Advertising's Ghostery plugin for Internet Explorer, Firefox and Chrome, a popular browser extension that aims to help demystify the tangle of players involved in serving advertising on the Web.

The Better Business Bureau has also signed on to the Digital Advertising Alliance to oversee monitoring and compliance. The BBB will proactively monitor advertisers and networks to ensure they are living up to the letter and spirit of the notice and opt-out requirements, and, starting early next year, could begin issuing complaints to noncompliant firms. If an advertiser fails to adequately address the complaint, the BBB will report back to the relevant trade association, which could then terminate the offending company's membership.

At next week's launch, the major ad networks, all members of participating trade associations, will be on board and begin serving ads with the forward i icon, as will many major advertisers, sources said.

Appearing alongside the forward i icon will be a snippet of text meant to alert users of the icon's significance. Publishers and networks will have their choice of displaying the words "Interest-based ad," "Ad choice" or "Why did I get this ad?"

The choice of the language will be left to the advertiser.

Kenneth Corbin is an associate editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.


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