The critical role of websites in ad-targeting disclosure: PrivacyChoice’s submission for the FTC Roundtables

December 5, 2009

In advance of the FTC Privacy Roundtable Series starting next week, I was pleased to contribute an analysis of ad-targeting policies and practices based on information in the PrivacyChoice database.

My submission supports what everyone already knows: the current self-regulatory approach is not working to provide consumers with meaningful disclosure and choice when it comes to online behavioral advertising. This does not necessarily mean that government regulation is necessary; it does mean that it’s time for a new approach.

Here’s the most important finding:  NAI members are outnumbered by non-NAI members on popular websites. Although NAI members have huge reach in terms of ads served, companies outside the circle of best practices still gather and use a great deal of information about consumer activities and interests. This led me to conclude in the report:

Website publishers are not fully considering privacy impacts when they enable ad targeting on their websites.

Recommendation: Websites employing ad targeting should provide enhanced disclosure and choice at the webpage and website level. This supports greater accountability among websites and advertisers and provides the easiest and most complete user experience.

The key to an effective self-regulatory approach is to ask websites to be more directly involved in disclosure, as first called for by the IAB and BBB guidelines published in July. This will have two benefits:

  1. With targeting disclosure linked from each page, websites and advertisers will make more careful decisions about who collects user data on their site and what policies they follow. Transparency and accountability leads to better behavior, and this will naturally flow back through the ad ecosystem. Once it really matters to their business, more and more targeting firms will clarify their policies, clean up their practices and seek certification by organizations like the NAI and TRUSTe.
  2. Websites, advertisers and ad networks will finally have a framework within which to engage consumers on the value exchange involved in targeted marketing. If you remove the mystery and empower consumers with the information they need to make real choices, you will find far fewer than you expect will choose to opt-out. If you explain the benefits and create an environment of transparency, we may be surprised by how many actually opt-in.

Ad-hoc educational campaigns and informative icons will be helpful for consumers. But it would be folly to expect that icons in ads will eliminate the need for websites to step up to better disclosure. Standing alone, in-ad disclosure doesn’t provide an acceptable consumer experience. It depends on the consumer to have separate interactions for each ad, gives no single view of all relevant companies and opt-out choices, and does not easily provide visibility on multiple companies that may be involved in selection of each ad.

Better website-based disclosure doesn’t have to be painful for websites. An approach like the PrivacyWidget is simple (it installs in minutes), and doesn’t involve a massive technical undertaking to automate disclosure from within the bowels of the ad-delivery chain. Disclosures can be easy to find and use, without a big allocation of page real estate and without impairing a site’s user experience. With an open platform that embraces easy experimentation by websites, we can shore up disclosure now while also preparing for increasing complexity as ad exchanges, demand-side platforms, and other technical advances increase the number of companies engaged in online targeting.

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5 Responses to “The critical role of websites in ad-targeting disclosure: PrivacyChoice’s submission for the FTC Roundtables”

  1. […] Very Important ReportMastercard's exemplary opt-outFlash cookies and behavioral tracking: a proposalThe critical role of websites in ad-targeting disclosure: PrivacyChoice's submission for the FTC Rou…Hall of Shame: Tracking networks without […]

  2. […] labeling actually mislead consumers?The NAI's Very Important ReportMastercard's exemplary opt-outThe critical role of websites in ad-targeting disclosure: PrivacyChoice's submission for the FTC Rou…Flash cookies and behavioral tracking: a […]

  3. […] Top Posts Google's Teracent: The worst consumer opt-out?Hall of Shame: Tracking networks without opt-outsThe NAI's Very Important ReportCould behavioral-ad labeling mislead consumers?The critical role of websites in ad-targeting disclosure: PrivacyChoice's submission for the FTC Rou… […]

  4. […] January 18, 2010 As mentioned in the release notes for the PrivacyWidget and earlier posts, PrivacyWidgets can provide a platform for the value-exchange between consumers and advertisers […]

  5. […] Anyway, the letter lambastes AdMob’s current privacy policy, claiming that it “provides inadequate notice and little ability to opt out of its data collection and targets children 13 and over” and asserts that things are only going to get worse once Google takes over. By contrast, our far more reasonable friends at PrivacyChoice raise some very fair questions about Teracent’s current privacy policies, decrying “The worst consumer opt-out“—but unlike Chester, an anti-advertising zealot, the PrivacyChoice folks realize that, when big companies like Google and Apple buy small companies like AdMob, Teracent and Quattro Wireless, they face enormous pressure bring their new acquisitions privacy practices up to their own standards.  And where the new acquisitions are operating in a new area, like location-advertising, big players will likely decide on higher, not lower, privacy standards. As PrivacyChoice notes: No doubt Google is working to assimilate Teracent into its own (much better) consumer privacy practices. But Teracent’s shortcomings provide a good reminder of the chasm in quality between the best and worst consumer privacy practices of ad-targeting companies. Until websites and advertisers start to attend to these matters in their own choices, this disparity in commitment to best practices will remain a central challenge to effective self-regulation. […]

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