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Do proposed guidelines for online ads cut the mustard?
Will consumers really have a choice?

By Elinor Mills

Published: Monday 25 February 2008

The Interactive Advertising Bureau (IAB) has proposed new privacy guidelines related to online advertising that offer weaker consumer notice and choice requirements than the US Federal Trade Commission (FTC) wants.

A-Zs…

1. Security from A-Z…

2. Biometrics from A-Z…

3. Broadband from A-Z…

4. Wireless from A-Z…

5. Green IT from A-Z…

The guidelines were released ahead of Ecosystem 2.0, the IAB's annual meeting. They will be submitted to the FTC before 1 March, the IAB said.

In proposed privacy principles unveiled in December, the FTC said websites should provide a "clear, consumer-friendly and prominent statement" that data is being collected for targeted ads. Consumers also should be given the ability to choose whether to have their information collected for targeted advertising, and companies should collect sensitive data for behavioural advertising only if the consumer expressly consents to receiving such ads, the FTC said.

Meanwhile, the IAB guidelines would make it less obvious for consumers that their data is being collected for advertising, with a notice buried somewhere on the website where the privacy practices are kept. Also, the IAB favours directing consumers to other places where they can opt out if they don't want their information gathered or used for advertising.

The IAB asks that companies provide consumers with "meaningful notice" in a "consumer-friendly manner" about data collection, using "easily accessible links" to privacy policies, and other voluntary steps to educate the consumer.

Companies collecting or using consumer information for online advertising should provide choice, "where appropriate", to the consumer, as well as provide consumers "relevant education regarding cross-industry opportunities to opt out of the collection or use of" consumer data, the IAB guidelines recommend.

Companies also should use "appropriate" security procedures and practices and should respond "appropriately" to consumer complaints, as well as educate consumers on the benefits of interactive advertising.

In explaining the differences between the FTC wishes and the IAB guidelines, Randall Rothenberg, IAB president and chief executive, said the organisation wanted to offer flexibility to site publishers and marketers, who he is sure will do the appropriate thing or risk losing business.

Rothenberg said in a statement: "IAB members understand the relationship between consumers and companies is built on trust. As a result, IAB members have long been committed to guarding consumers' information and privacy.

"Based on the industry's experience, we believe the FTC is too rigid on the matters of notice and choice. Our principles strike the appropriate balance between protecting consumers' security and allowing industry to provide the free services and content they desire."

But privacy advocate are not happy with the IAB guidelines.

Jeff Chester of the Center for Digital Democracy said the IAB should prohibit data collection without full disclosure and prior consent of the consumer.

Chester said: "These new principles won't provide any real protections for consumers. The failure of the IAB to acknowledge key issues related to sensitive data (something the FTC does in its proposed principle set) - including children, teens, financial and health - is another example of how the online ad trade group is failing to do what is required to protect consumer privacy."