Six Firms Respond to Self-Regulatory RFP for Behavioral Ads

Ad industry groups are rushing to develop technologies to monitor compliance with their own self-regulatory guidelines in a quest to evade government regulation of behavioral advertising. Six companies have submitted proposals for third party systems to monitor for compliance with self-regulatory principles established in July by a coalition of ad industry groups and The Council of Better Business Bureaus.

Now, members of the coalition organizations — The Interactive Advertising Bureau, the Direct Marketing Association, the American Association of Advertising Agencies, and Association of National Advertisers — with oversight from the Better Business Bureau’s advertising review body, will choose which proposal or proposals fit the bill.

Submissions in response to a request for proposal issued in December for the monitoring systems were due January 8.

“One of the concerns about any self-regulatory approach the FTC has voiced…is a lack of broad compliance strategies, and what we’re trying to do is address those concerns,” said Lee Peeler, EVP of the BBB, and president of its National Advertising Review Council (NARC).

“We’re looking for relative cost and effectiveness in terms of providing a credible third party oversight,” he told ClickZ News. NARC was established in 1971 to assist in advertising self-regulation, and is administered by the BBB.

The request for proposal asked for systems to “externally monitor online behavioral advertising activities to verify compliance with the Principles by those industry members who have committed to following them and to detect non compliance and to promote adoption of the Principles by other industry members that have not been participants of members.”

The RFP required proposed systems to distinguish behaviorally-targeted advertising from other forms, identify the entities serving those ads, identify collection of behavioral data, and determine whether consumer opt-outs from behavioral tracking and targeting are maintained.

Peeler said the coalition may approve multiple proposals for implementation, and hopes to make its decision in one or two months. “We need to move along swiftly,” he said.

“Prior to final selection, respondents should be prepared to demonstrate the operation of the system and to provide adequate proof that the system can be fully implemented technically,” stated the RFP. “We want to make sure the proposed technologies actually work,” explained Peeler, who would not reveal the names of the companies that submitted proposals.

Better Advertising is one of the firms that submitted a proposal. “Our system meets all the requirements that came from the RFP,” CEO and Founder Scott Meyer said. The company’s primary objective is to serve the need for third party monitoring of compliance with online ad regulations.

The company has yet to use its proposed system in beta, and expects to do so in Q2 of this year, according to Meyer. The firm announced this week it had acquired Ghostery, a technology that notifies users when their Web interactions are being tracked, and by what companies. The technology will be used to complement the Better Advertising system that’s in development.

Though the firm has yet to determine a business model, Meyer said Better Advertising has seen “strong interest on the part of the buy side.” One option is to charge advertisers, agencies, and others for the monitoring services. The benefit of such a system for advertisers and agencies is avoidance of risk, said Meyer, adding, “brands bear the brunt” of consumer concerns with data collection and security. “But there’s also a real opportunity to elevate the reputation of the online ad industry,” he continued.

The coalition’s principles also call for all entities collecting and using data for behavioral targeting to disclose the practice in a “clear, prominent, and conveniently located” manner at the time of data collection. That will be enabled through a standard icon — presumably appearing in ads — that Peeler said is currently in development.

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