IAB Prepares to Sharpen Self-Regulatory Fangs

The Interactive Advertising Bureau is preparing to sharpen its self-regulatory fangs. As its CEO hits Congressional hearings and its Washington, D.C. office adds a new attorney, the IAB is determining how best to enforce standards for protecting consumer privacy and other guidelines. The group also aims to enlist an army of small publishers to deploy in state battlegrounds. It’s all part of an ongoing effort to ward off unwanted government regulation.

“We think it’s time to expand some self-regulation,” said IAB VP Public Policy Mike Zaneis. “We’re looking to see if we should partner with a third-party enforcement group,” he continued, noting the trade organization hasn’t signed any agreements, but is in regular communication with potential third-party auditors Truste, Media Ratings Council and the National Advertising Review Council.

“For much of the past year the IAB has been in discussions with several of the major media and trade organizations including the ANA and four A’s [Association of National Advertisers and American Association of Advertising Agencies] to discuss the importance and the feasibility of a broad self-regulatory mechanism to protect consumer privacy rights and expectations in interactive advertising supported media,” said IAB President and CEO Randall Rothenberg. “We have every anticipation that fairly soon we’ll be able to announce that kind of agreement.”

Together, those organizations and others defended behavioral targeting in filing a joint document with the Federal Trade Commission in April. They noted, “self-regulation and leading business practices comprise the most effective framework to protect consumers and further innovation in the area of privacy and behavioral advertising.”

“We have a system that ain’t broke at all so I’d be very careful of going across that bridge from research, inspection, exploration, into regulation without very careful scrutiny,” cautioned Rothenberg last week during a House Small Business Subcommittee hearing on online advertising.

In the face of increasing regulation and proposed state and federal legislation regarding consumer data privacy and security, spyware, ISP ad targeting and e-commerce taxation, the IAB is girding to attack government intervention it deems unwarranted, uninformed, or too vague.

“We saw these bills coming down the pike in the states and what the FTC was doing and it just didn’t look good,” Rothenberg told ClickZ News.

The group has hired an attorney to work alongside Zaneis in Washington on state, federal, and regulatory matters. It also recently opened its membership to small publishers. “We’re organizing the long tail of the industry,” Rothenberg explained, “whether it’s bringing them to Washington or organizing them in their state legislatures.”

However, as the IAB urges lawmakers and regulators to keep off its lawn, the fact is the organization currently has no official means of enforcing the guidelines it has put forth over the years. Some members may prefer to keep it that way.

Among other members, Jarvis Coffin, CEO of Web publishing company and IAB member firm Burst Media, isn’t so sure the IAB should be in the policing business. “I don’t think what the industry needs is a long arm of the IAB; what the industry needs to do is act responsibly.” He added, “As a member of the IAB, I wouldn’t vote to make them any sort of paralegal authority either.”

Despite potential member backlash against establishing enforcement mechanisms, some believe the only way the IAB will be able to convince the powers that be of its self-regulatory capabilities is to do just that.

“If the IAB has a set of self-regulatory standards and they’re not policing it, and no one else is policing it, then it’s not being policed,” said Don Mathis, president of Epic Advertising, owner of IAB member firm AzoogleAds. When Epic still went by the Azoogle name last year, the company agreed to pay the Florida Attorney General’s Office $1 million following its investigation of the firm for unfair and deceptive trade practices relating to online ringtone offers. Azoogle also agreed to work with the AG’s Office to assist in other investigations, and recently hired two former AG Office staffers to serve under its general counsel.

Because of his own experience working closely with government entities, Mathis believes the IAB should do the same, rather than opposing them. “If you’re promoting the concept to a legislative body that onerous legislation can slow down the growth of an industry, that’s something I can support philosophically,” said Mathis. Yet, he continued, “From a pragmatic aspect, the reality is, the ability to police the industry isn’t what it should be on either [the industry or government] side, and maybe the right answer is to work with agencies to achieve that.”

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