October 4, 2010, 4:41 PM

‘Ghostery’ is watching: Online ad industry pushes privacy self-regulation

The voluntary policies pave the way for industry enforcement early next year.

Lead Photo

Scott Meyer, CEO of the Better Advertising Project

The Digital Advertising Alliance, a group of advertising industry trade associations, formally announced today the details of a program for assuring advertisers’ compliance with privacy principles for online ads that target consumers based on their browsing behavior.

The self-regulatory program calls upon online advertisers to abide by the seven principles related to consumer privacy that the Digital Advertising Alliance released last year to correspond with tenets proposed by the Federal Trade Commission. The principles cover practices such as letting consumers opt out of programs that automatically collect data about their online shopping behavior and providing transparency into how advertisers collect and use that data.

The program also calls for online advertisers to mark their online ads with the triangular “Advertising Option Icon,” which consumers can click to view an advertiser’s privacy policies.

“Marketers, agencies and media companies need to talk to their audiences,” says Randall Rothenberg, president of the Interactive Advertising Bureau, one of the advertising groups that comprise the Digital Advertising Alliance. “They need to describe what they do, how they do it and the value it brings. Transparency and choice are essential in reinforcing that trust, and trust is a critical underpinning of growth—for the marketing and media industries as well as for the entire economy.” 

With new ad-tracking technology provided by Better Advertising Project Inc., a company formed specifically for the self-regulatory program, the Council of Better Business Bureaus and the Direct Marketing Association, a trade group for direct-to-consumer marketers and retailers, will begin monitoring compliance with the program early next year. The program hasn’t announced any policies regarding fines or other repercussions for failure to comply.

The technology from the Better Advertising Project, which so far is the only firm authorized by the program to provide ad-tracking technology, comes in three components, according to CEO Scott Meyer:

● An assurance platform that the company sells to advertisers and advertising agencies, which enables advertisers to place the Advertising Option Icon on the thousands of ads that may run through advertising networks and properly show their advertising policies to consumers. Better Advertising charges clients on a cost-per-thousand ad impressions model, which amounts to “pennies per thousand,” Meyer says.

● The Ghostery ad-monitoring application, which consumers can download for free from Ghostery.com to install on a web browser. While viewing web pages, the Ghostery application indicates in a box in the top right-hand corner the name of any advertiser currently tracking the page viewer’s browsing activity.

● An industry compliance platform, which Better Advertising is providing at no charge to the BBB and the DMA to monitor advertisers’ compliance with the self-regulatory program.

Although each of these components operates on its own technology platform, the Ghostery application will be used to feed information to the industry compliance tool, Meyer says. The Ghostery application has already been downloaded by 2.3 million consumers, including 300,000 that participate in an online panel that compiles data on advertiser compliance.

As the BBB and DMA begin to use the compliance monitoring system, they will use data from the Ghostery panel along with other data sources, Meyer says. Better Advertising Project is backed financially by venture capital firm Warburg Pincus LLC, where Meyer worked as an entrepreneur in residence as he founded the company. Meyer is also a former online executive at The New York Times Co., where he helped launch the publisher’s NYTimes.com news web site and was CEO of the company’s About.com consumer information site.


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