Some NAI Members Don't Fully Comply With Behavioral Targeting Standards

The Network Advertising Initiative’s 2009 annual compliance report found that some of its members, which are primarily ad networks, were not in line with its guidelines for the collection and use of personal data for online behavioral advertising. While most were in complete compliance, the organization found shortcomings with 10 out of 35 member companies.

Those 10 companies, which were not identified, had either failed to adequately disclose the periods of time for which they retain personal data or failed to enforce contractual agreements requiring their partner sites to let consumers know their information is being used to deliver targeted ads.

A spokesman for the NAI said the 10 networks that failed to disclose the period for which they retain data had rectified the problem and were now in compliance.

“This review shows how a strong self-regulatory program can help companies continuously improve their privacy standards by adopting best practices from across the industry,” said NAI Executive Director Charles Curran said in a written statement.

The purpose of the report is to ensure that NAI member companies, which include the likes of Google, Yahoo, and AOL, adhere to the organization’s self-imposed guidelines for behavioral targeting and stave off government oversight. These guidelines include what data they can use, who they can target (e.g., no one under 13) and how consumers must be notified.

Enforcing contracts that require publishers to tell consumers that their data is being used for behavioral ad targeting is a trickier matter. The NAI is working with its members “to develop a comprehensive partner notice implementation plan to further expand notice and choice across the large number of publisher Web sites that work with NAI companies,” according to an NAI press release.

Whether self-regulation will continue to satiate critics remains to be seen. The Federal Trade Commission turned up the heat on ad networks that practice behavioral targeting in 2009, unveiling new principles in February, when Commissioner Jon Leibowitz warned that, “A day of reckoning may be fast approaching” for such networks.

The report also stated that nearly 300,000 unique visitors had gone through the NAI’s opt-out process on its Web site in 2009 to ensure their data wasn’t used for behavioral advertising. Nearly one million unique visitors came to the NAI Web site this year overall, the report said.

This is the first year that the NAI produced the report in-house, a move mandated by a 2008 update of the group’s guidelines. The idea is for the NAI to increase enforcement over its member companies and take greater control in communicating the report’s findings.