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Google, Yahoo, AOL Join Self-Regulation Push for Behavioral Ads

  |  October 3, 2010   |  Comments

More than 50 of the largest Web ad firms will take part in a potentially far-reaching program launching today.

selfreg-iconA potentially far-reaching behavioral ad choice initiative backed by the largest ad and marketing associations is set to be made public today. More than 50 of the largest publishers, ad networks and third party data firms will participate, including Google, Yahoo, AOL's Advertising.com, and Valueclick. But if the program is to succeed in its mission to give consumers more control over how and whether they're targeted online, it must also get smaller networks and publishers on board.

A less likely outcome of the program: warding off government intervention in the online ad industry in the form of privacy legislation and increased enforcement powers of the Federal Trade Commission.

Following release of its principles for online behavioral ads, a coalition of ad industry organizations operating as The Digital Advertising Alliance will unveil a new icon intended to be displayed on ads targeted using behavioral data, as well as other forms of targeting in some cases. The symbol will link to more information about how the ad was targeted, and allow users to click to opt out of targeting by participating publishers and ad networks.

The first step involves networks and publishers registering with the program and licensing the icon. That means agreeing to abide by the group's principles and, in many cases, paying a total of $15,000 to use the icon for a year and enable a third-party opt-out mechanism allowing users to cut off ad targeting by companies of their choice.

At the start, all members of the Network Advertising Initiative, which includes over 50 ad networks, publishers, and data firms, have agreed to take part in the program.

Once a company registers, consumers will begin to see the small "Advertising Option Icon" appear on its behaviorally targeted ads. Some companies may choose to have the symbol show up when ads are targeted in other ways such as demographically or geographically. The symbol is different from the one initially floated by the alliance; legal precautions led icon designers to alter it.

"We wanted to make sure we had an icon we could license and have the right legal protection," said Stu Ingis, a Partner at Venable, a law firm working with the industry coalition.

While third party ad networks will be charged $15,000 to participate - $5,000 to license the icon and $10,000 to enable the opt-out mechanism - developers of the program have reduced the cost for small companies. The icon cost will be waived for firms involved in serving less than $2 million in behavioral advertising, while a sliding fee scale will apply for enabling the opt-out.

"We want ubiquity across the program," said Ingis.

The fees will go towards operating and staffing costs for the Digital Advertising Alliance, the not-for-profit corporation formed by the ad groups. At first, staffers will be tasked with calling companies to notify them of the program. Currently, the alliance has two people working on a contract basis, and member trade groups have dedicated employees to the program. The alliance was formed by the American Association of Advertising Agencies, the American Advertising Federation, the Association of National Advertisers, the Direct Marketing Association, and the Interactive Advertising Bureau.

When users visit the opt-out site, it will display an automated list of ad networks that have dropped ad cookies on their machines. They'll also be able to opt out of any other participating networks. According to Ingis, the alliance aims to ensure that the opt-out is persistent. "The goal is it's enabled unless you change your preference." He said that may not be possible, at least at first, because "some browsers make that a problem."

Though the guidelines don't directly address flash cookies, alliance members said using flash cookies to reinstall cookies that users have opted-out from would be viewed as a violation of the principles.

In terms of enforcement, explained Lee Peeler, president and CEO of the National Advertising Review Council and an EVP at the Council of Better Business Bureaus, the alliance will determine whether a company committed a violation and recommend a compliance solution. Then, he said, "You would refer it to the government."

Firms including Better Advertising Project will provide services to help companies comply. BAP is expected to provide the monitoring technology for the program. TRUSTe, which has been testing a similar program using its own logo for four months, plans to submit an application to become a service provider as well. TRUSTe announced its own notice symbol featuring its recognizable logo around the same time as the ad industry coalition revealed the earlier version of its own.

At the time, TRUSTe President Fran Maier suggested, "Our seal already means something to consumers." Now, TRUSTe will use the alliance's icon, assuming the firm is approved to provide compliance and reporting services.

"We believe we've now solved that," said Peeler, referring to the potential confusion that may have been caused by multiple icons.

In addition to assisting companies with required compliance reporting, TRUSTe will insert ad tags and help educate consumers for clients, said Chris Babel, TRUSTe CEO. The firm is also partnering with media verification services DoubleVerify and AdSafe Media to easily enable those services for clients using its "TRUSTed Ads" compliance program.

Hiring firms like BAP or TRUSTe will not be required, Peeler said, adding, "But there certainly is a marketplace for them."

As industry implements a self-regulatory initiative some never expected to come to fruition or to have buy-in from so many key organizations and companies, government intervention looms. Capitol Hill insiders still expect congress to enact comprehensive privacy legislation, which will most likely give the FTC enforcement authority over violators. The commission is also expected to release a report of findings gathered during its most recent series of privacy roundtable sessions.

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ABOUT THE AUTHOR

Kate Kaye

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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