New rules to govern targeted ads in US

03 July 2009

NEW YORK: Online behavioural advertising will soon be subject to a new set of self-regulatory guidelines in the US, after the Association of National Advertisers, Direct Marketing Association, 4A's and Interactive Advertising Bureau released a joint report outlining the "principles" that should govern such schemes.

The Self-Regulatory Principles for Online Behavioral Advertising report will apply to over 5,000 organisations that are members of these organisations, varying from Google, Microsoft and Yahoo to Disney, McDonald's and General Electric.

One of the recommendations issued by the four trade bodies – and which are due to come into force next year – is to create a single website that will educate consumers about what targeted ad systems are, and how they work.

Companies tracking data will also be required to openly divulge the fact they are gathering statistics, either via an on-screen ad or through a website.

A specific logo or phrase will be established for use by all participating web properties to show internet users where they can locate more information about behavioural data collection, and to opt out of this process if they wish.

Furthermore, consumers will have to actively agree to the monitoring of "sensitive" material, such as that based on financial or health matters.

Similarly, marketers should not trace information related to children they know are "under the age of 13 or from sites directed to children under the age of 13 for online behavioral advertising."

Internet service providers will also have to receive active consent before they begin to follow any form of online activity for advertising purposes.

To police these arrangements, a new system will also be established whereby companies and members of the public can submit complaints about possible abuses of these rules.

The report says "programs will also, at a minimum, publicly report instances of noncompliance and refer entities that do not correct violations to the appropriate government agencies."

Anne Toth, vice president of policy for Yahoo, argued the scheme "raises the bar on transparency."

What is "really notable" about the proposals, she added, was "how many organizations are involved" and their overall "scope of involvement."

Charles H. Kennedy, a lawyer at Morrison & Foerster, said "these principles are especially strong in the area of notice or transparency."

He added, however, that they were "a little less clear" on the idea of "consent and how it's going to be obtained and what it's going to consist of."

Data sourced from New York Times/Reuters; additional content by WARC staff