April 4, 2011, 3:21 PM

Study shows lagging compliance with an online ad privacy program

The study finds inconsistent compliance with the industry’s attempt at self-regulation.

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Online advertising networks’ adoption of AdChoices, a program that lets consumers opt out of having ads targeted to them based on online browsing behavior, is uneven, according to a study published last week by Carnegie Mellon University researchers. The program is the online ad industry’s attempt to self-regulate and stave off government intervention that could make it harder for ad networks to track online shopper activity.

The study, “AdChoices? Compliance with Online Behavioral Advertising Notice and Choice Requirements,” analyzed the policies and practices of 66 online advertising network providers that are members of the Network Advertising Initiative. The NAI is a marketing trade association that requires its members follow guidelines set forth by the Digital Advertising Alliance, an umbrella group of seven trade associations that developed the AdChoices rules, and which is often called the DAA.

Carnegie Mellon University researchers studied how NAI members presented their policies and opt-out options across advertisements on the 100 most popular U.S. web sites as measured in February by Quantcast. The researchers conducted site reviews in February and March. They found that 35% of NAI members provide a “clear, meaningful and prominent link” on each page where behaviorally targeted ads appear; the link directs consumers to information about which companies are collecting data, or links to the Digital Advertising Alliance’s web site. Among the 35%, however, link placement is inconsistent. Some place it on or near the advertisement and others place it at the bottom of the page, for example.

83% of NAI members fulfill the DAA’s privacy notice requirement, which means the online ad network has a privacy policy that describes its actions. How completely these actions are described, however, varies from member to member. All NAI members note their online behavioral advertising activities, how the collected data are used and provide a way for consumers to opt out. 56 NAI members—or 85%—note how long they retain the collected data for behavioral advertising purposes.

88% of NAI members provide a definition of what opting out means, which fulfills the DAA’s requirement, but definitions vary. For 22 members, opting out means the ad network will collect no data and no longer track the consumer; five say opting out means the ad network will collect less data; and 31 say opting out means consumers would no longer see behaviorally targeted advertisements. Four of those 31 members who say consumers will no longer see behaviorally targeted ads explicitly state that behavioral data are still collected.   

The authors say their findings raise concerns, noting that the DAA published its policies 20 months ago and officially launched the program last fall. “Although we have observed an increasing rate of compliance, overall compliance has been slow,” they write. They further note that some opt-out mechanisms in place failed to work when the researchers tried to use them.

The NAI earlier this year said 472,000 unique visitors used its on-site, opt-out tool, but did acknowledge that some member companies had issues related to systems changes. The NAI says it now recommends that member companies formalize their written guidelines to protect opt-out choices during system changes. The NAI and the Direct Marketing Association, which is the DAA member association responsible for enforcing the AdChoices program, did not immediately respond to requests for comment on the study.

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