July 31, 2009, 12:00 AM

Marketers seek to stave off regulation with online privacy guidelines

After calls by the U.S. Federal Trade Commission for stronger voluntary advertising industry action to protect the privacy of Internet users, four major advertising and marketing organizations gathered in January to take action designed to ward off regulation.

After calls by the U.S. Federal Trade Commission for stronger voluntary advertising industry action to protect the privacy of Internet users, four major advertising and marketing organizations gathered in January to take action designed to ward off regulation. Last month, the groups issued voluntary guidelines for protecting consumer privacy when marketing to consumers based on their online behavior.

Consumer advocates made clear they consider the guidelines inadequate and will continue to push for legislation limiting collection and use of data about the behavior 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.

Accountability programs

The Council of Better Business Bureaus agreed to work with the DMA to develop programs to monitor compliance with the 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 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 and used as individuals move around the Internet.

Praise from the FTC

FTC chairman Jon Leibowitz welcomed the release of the principles, while leaving open the possibility of additional regulation. “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,” Leibowitz said in a statement. “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,” Grant says, “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.”

don@verticalwebmedia.com

Online privacy principles

From the Interactive Advertising Bureau, Direct Marketing Association, American Association of Advertising Agencies and Association of National Advertisers

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.

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.

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