Online groups introduce labeling for targeted ads

Five advertising trade groups, including the Direct Marketing Association (DMA) and the Interactive Advertising Bureau (IAB), have launched a new program that will label online advertisements that their members serve based on the Web-surfing habits of consumers.

The five groups on Monday launched, which gives online advertisers and networks information about the new advertising option icon. The groups are pushing members to use the icon, which will be tied to an opt-out mechanism for targeted advertising, alongside online advertisements.

The action by the five groups comes as some members of the U.S. Congress have explored privacy legislation that would set rules for the collection of personal data by online advertisers. The U.S. Federal Trade Commission also issued revised guidelines for behavioral advertising in February 2009, and it is again looking at new standards.

Some privacy groups have called on Congress or the FTC to require online ad networks to get opt-in permission from consumers before collecting information to be used for targeted advertising, but the new advertising icon would add another way for consumers to opt out.

Online advertising groups have taken several steps in the past to self-regulate, with the Network Advertising Initiative, for example, offering an opt-out cookie for targeted ads across its members' networks. The new icon is in line with the report, Self-Regulatory Principles for Online Behavioral Advertising, which the online ad industry released in July 2009.

The new icon builds on "DMA's long-standing commitment to consumer choice and its history of effective self-regulation across all marketing communications," Larry Kimmel, the CEO for DMA, said in a statement.

The NAI is already providing notice about targeted advertising on or near millions of ads each day, said Andrew Weinstein, an NAI spokesman. "This approach will ensure there is a consistency to the visual icon, messaging and opt-out process across all of the participants in the online advertising industry," he said. "There is a growing consensus among industry organizations that using a single icon will be easier for consumers to understand and use."

The groups are working with members of Congress and the FTC to address issues they have raised, Weinstein added. "We believe that this program fully responds to the FTC's call for more robust and effective self-regulation of interest-based advertising," he said.

A decade's worth of self-regulatory efforts by the online advertising industry have failed, said privacy advocate Jeffrey Chester, executive director of the Center for Digital Democracy. "This last-minute attempt to head off soon-to-be-released FTC privacy safeguards, as well as federal legislation, is too little, too late," he said. "The new websites created for this effort fail to inform consumers about how they are tracked, profiled and targeted online."

The new effort allows the collection of much financial and health data of consumers, with only the "narrowest" exemptions, Chester added. The new guidelines tell ad companies not to collect financial account information, Social Security numbers or prescription information without a consumer's consent.

"None of this new effort involved consumer and privacy groups, so it's fox watching the corporate-run hen house," Chester said. "This effort, like the others, is designed to head off new FTC proposals coming in a few weeks. The FTC is expected to support real consumer protection controls that would minimize data collection, ensure real transparency and consumer control."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is

Copyright © 2010 IDG Communications, Inc.

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