E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Enforcement begins on behavioral ad industry self-regulation effort.
A program designed to reassure consumers about their online privacy is taking effect this week.
The Direct Marketing Association, a trade group, says it is ready to investigate marketers that do not display the Advertising Option icon on online ads that they serve to consumers based on their prior online behavior. The icon links consumers to information about online behavioral advertising and allows them to opt out of receiving ads based on their online behavior.
The Advertising Option program is a self-regulation effort launched by a consortium of advertising trade groups in October that includes the Interactive Advertising Bureau, the Association of National Advertisers and the American Advertising Federation. As of yesterday, the DMA says it is now enforcing the rules it set out in October.
The trade group says that by self-regulating, the direct marketing industry can take action more quickly and respond to consumer needs better than the U.S. government can. Online advertisers are hoping that by regulating themselves they can forestall government action, which is under active discussion in Washington. In December, both the Federal Trade Commission and the U.S. Department of Commerce separately proposed rules that would limit how online marketers could collect or use consumers’ browsing information. Similar initiatives are under consideration in Europe.
The DMA is now monitoring online marketers to make sure they comply with the rules. It also is investigating consumer complaints. The trade group includes both DMA members and non-members in its self-regulatory scope. “We are now moving forward with monitoring and enforcement to make sure that businesses are using interest-based advertising responsibly across the entire advertising and marketing ecosystem,” says Linda Woolley, executive vice president of government affairs at the DMA.
There are no financial penalties for non-compliance but the group says its 3,600 member companies are required to use the Advertising Option icon under the terms of their membership. If a member company isn’t in compliance, the DMA will launch a confidential investigation and contact the advertiser to advise the company how it can become compliant. If the company doesn’t cooperate, the DMA may make the investigation public and suspend or cancel a company’s membership.
“We will work diligently to foster compliance and accountability across the industry,” says Lawrence M. Kimmel, CEO of the DMA. For online marketers who spend $2 million or more a year on behavioral advertising, there is an annual $5,000 fee to use the icon.