In the midst of scrutiny of the online lead generation advertising sector by the Federal Trade Commission and other authorities, the Interactive Advertising Bureau's Lead Generation Committee plans to unveil best practices guidelines for publishers this week.
"The release will certainly shed light on the fact that we are taking the FTC's and the [Florida] Attorney General's suggestions very seriously," said IAB Lead Generation Committee Chair Gayle Guzzardo, SVP, product management at Q Interactive. "In response to that and other industry feedback, we created the document."
The FTC in recent months has penalized firms in the space including Adteractive and debit card marketers EDP Technologies Corporation. Industry watchers say the FTC has set its sights on several players in the lead generation sector. It is publicly known that Valueclick is among them.
Many of these cases have hinged on allegedly deceptive use of the term "free" in ads and offers on publisher sites. The Florida Attorney General's Office recently required AzoogleAds and World Avenue to "contribute" $1 million each after charging them with unfair and deceptive trade practices relating to "free" online ringtone offers.
Lead generation practices that offer incentives to users for providing contact information, or promote "free" items like iPods or gift cards without disclosing related terms and costs are increasingly under fire by industry watchdogs and regulators.
"These guidelines are going to make it more difficult for the fly by night companies to survive," said Guzzardo. The sector has been besmirched by lesser-know firms that engage in unscrupulous lead gen practices to make a quick buck, often leaving consumers with bills for ringtone or magazine subscription services they've unwittingly signed up for.
The new IAB guidelines reference the FTC.gov site for guidance when it comes to use of the term "free" in lead gen advertising, added Guzzardo, who noted terms and costs associated with offers should be displayed on publisher pages in close proximity to the word "free."
According to the FTC's November settlement with Adteractive, the firm must conspicuously mention payments or obligations required of consumers in order to obtain gifts and prizes.
The publisher best practices guide also deals with privacy policies and usage of consumer data. The document also includes guidelines for business interactions among publishers, agencies, and advertisers, specifically in terms of data ownership and lead origin.
In October, around the time the Lead Generation Committee began developing the best practices guidelines, the IAB challenged lead gen advertisers to adopt its data transfer practices by April 2008. The guidelines call for encryption of lead generation data when transferred, and the use of a common, secure platform for doing so.
There is currently no timeline for implementation of the new best practices guidelines, nor will the IAB enforce them, according to Guzzardo. "The end goals are to increase consumer trust, improve lead quality and ultimately increase spending in the category by advertisers," she said. "The IAB is going to push our players to adopt them, and then hope there's feedback of iterations we can make," she continued.
Despite some minor differences between the IAB's Lead Gen Committee and the Online Lead Generation Association, OLGA was among the trade organizations asked to comment on the IAB's best practices guidelines before publication.
"They were definitely open to our suggestions," said OLGA Board Chairman and Opt-Intelligence CEO Dan Felter.
Though OLGA agrees with most of the guidelines, Guzzardo noted one sticking point. OLGA proposed publishers should have to list every partner they share data with directly on lead gen registration pages. The IAB group decided against this, believing it could cause competitive disadvantages for publishers with relationships they may not want their competitors to be aware of.
"What we ended up with is that publishers should list directly on their registration page that they will share data with third parties," said Guzzardo. "I think there will be some publishers who will have to make some changes," she continued, "but the changes are going to put all of us in a better place."
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.
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