While the Network Advertising Initiative (NAI), a cooperative of online marketing and analytics companies committed to building consumer awareness and establishing responsible business and data management practices and standards, has existed since 1999, its policies and lack of ubiquitous participation and enforcement ability have not been enough to curtail the FTC’s scrutiny on our industry’s practices.
The proliferation of data usage for targeting and providing relevant consumer experiences has been a vital component to the progression and growth of the online advertising industry since the emergence of ad servers and data collection in the mid-to-late ’90’s. The argument has always been that no personally identifiable information (PII) is being collected or used and therefore the anonymous data is harmless and in no violation of any privacy guidelines or ethics. However, data collection and applications used to be limited to far fewer players. Today every ad network, marketing technology firm, and now all the major media agencies have developed or are in the process of developing the capabilities of collecting and applying consumer data in the quest to better identify and target specific consumer audiences.
Of course this benefits the entire ecosystem – including consumers. Publishers are utilizing their inventory more efficiently, marketers are able to reach the audiences we want and consumers have a more relevant experiences.
The Privacy Man
Behavioral targeting has been in the FTC’s cross hairs for the last few years (not to mention the unrelenting cries of consumer advocacy groups). It was only this past February when the FTC issued a last warning that the industry self regulate or the man will do it for us. In fact they issued a report on recommended self regulation principles for the industry. Here are the highlights:
Transparency and Consumer Control: Simply put, clear & concise disclosure of targeting practices and a method for consumers to opt-out. Fair enough.
Reasonable Security, and Limited Data Retention, for Consumer Data: Data should be stored in a reasonably secure manner based on the sensitivity of the data, and only retained for the duration required to fulfill a business or legal need. I can see the data storage duration becoming an issue on both sides.
Affirmative Express Consent for Material Changes to Existing Privacy Promises: Express consumer consent must be provided in order to use previously collected data in any manner that materially deviates from the policy in place and disclosed at the time of collection. This includes instances when a company merges with or is acquired by another company with different data collection and usage practices.
Affirmative Express Consent to (or Prohibition Against) Using Sensitive Data for Behavioral Advertising: Any “sensitive” data collected for the purpose of BT must be done so on an opt-in basis. BT data is rarely “sensitive”, however, several otherwise seemingly anonymous data points can be combined and used to create PII, which by definition is sensitive. I can see some conflict arising out of this guideline.
The FTC also (accurately) states that self regulation only works when there is a process in place to “monitor compliance and ensure that violations have consequences.” Commissioner Jon Leibowitz, in a separate statement also warned “A day of reckoning may be fast approaching.” “The jury is still out about whether self-regulation alone will effectively balance companies’ marketing and data collection practices with consumers’ privacy interests.”
Congressional meetings on the subject have been escalated as recently as last month.
The Ad Industry Finally Responds
The biggest hurdle to self regulation was that no industry trade group was prepared to bear the responsibility nor the cost of enforcement. Over the last year the IAB went from not having the desire nor the ability to monitor and enforce any BT guidelines, to seriously contemplating the proposition, to finally collaborating with the Direct Marketing Association, the American Association of Advertising Agencies, the Association of National Advertisers and the Better Business Bureau to establish and issue formal guidelines and enforcement mechanisms.
Advertisers, agencies, publishers, search engines, ad networks, ISP’s, and marketing technology firms will all be held responsible to disclose data collection and usage practices in a “clear, prominent, and conveniently located” manner on their own sites and at the time of data collection.
It is the disclosure at time of data collection that is the interesting development. This disclosure will include an icon or text link that consumers can click on to go to a (soon to be developed) 3rd party site that provides education on industry-wide data collection and usage options. This may be an easy addition at the ad server level. Effectively this moves some of the disclosure that may already exist buried in websites’ privacy policies, and brings it front and center. It does beg the question of how long we’ll need to do this? Two years? Five years? At some point are consumers just educated and BT practices become as normal to them as they are to us? An icon on every other ad served online? Well, according to critics and advocacy groups even that is not enough. Cries for do-not-track lists and more stringent opt-in practices abound, so it is vital that the industry start by appeasing the FTC and enforce violations.
Enforcement – The Scarlet Letter Approach
Enforcement includes reporting of violations to government agencies and the general public. There is certainly motivation for the industry to police violators and ensure that the few proverbial bad apples do not spoil it for the rest of us. Will this be enough to ward of the privacy-man and ensure self-regulation survives? We sure hope so. The strong arm of the law may be less than favorable or practical for the industry.
Filed under: Behavioral Targeting, Data Driven, Datanomics, The Marketing Industry, Trends | Tagged: Behavioral Targeting, FTC, IAB, Privacy, Self Regulation | Leave a Comment »
Yesterday was the second OMMA Social conference hosted by the fine folks from MediaPost. I moderated a panel that focused on strategy titled “As Social Media Grows, How Not to Miss the Forest for the Trees”.Marketers and agencies tend to focus on the “shiny new thing” – first it was MySpace, then Facebook, now Twitter, and there were even the moments of Second Life (ugh) and other platforms and digital sub-channels. At some point in the not too distant future it will be something else. Additionally, platforms like Wikipedia and Flickr and YouTube and Delicious all have a place in our arsenal of presence, as do some of the smaller second tier social sites, but most marketers don’t seem to methodically determine objective and develop strategies, but rather run into these channels simply because consumers are there and they need to follow. Aftrer all fishing where the proverbial fish are is what us marketers do, right? But without a strategy for the long term fundamental shift in how brands can engage consumers in social media, taking into account the multi-disciplinary nature of these platforms, companies may be headed in the wrong direction due to shortsightedness.
Many of my readers may already be aware of my life outside of the digital marketing industry. As publisher of 
Yesterday I emceed my second set of DigiDay conferences (
File Under “It’s About Freakin’ Time”! Thank you IAB for taking a step towards automating one of the mundane tasks that should not exist in our industry any longer!Hopefully it is not a witch hunt to try and pin discrepancies on the 3rd party ad servers, which has been the case for many years.
As many readers of this blog know, I often expose my inner media geek. Since leaving the agency world two years ago, I’ve had the opportunity to share all of the secret digital media sauce amassed throughout a carreer at the healm of an innovative, nimble and successful digital agency.
Over the last couple of weeks Sprite (Coca Cola) launched an interesting reality-type program on YouTube called 
Adjectives sound familiar?
For those who are wondering why I am writing about the TV industry today, the annual TV upfronts is an important event that affects the entire media ecosystem, and ignoring the largest macro-economic event in the media industry is not a wise move.
Yesterday I had the honor of being the emcee for two half day conferences, DigiDay Mobile & DigiDay Social. During hard economic times, the turnout for these conferences was actually almost shocking. I was amazed to see a standing room only crowd as early as 7:45am. This was the first mobile and social media conference for DM2 Events (soon to be renamed DigiDay Events, I believe), run by Nick Friese, formerly of MediaPost & OMMA.
