There is a new industry program supported by the Direct Marketing Association (DMA), the Interactive Advertising Bureau (IAB), the American Association of Advertising Agencies (AAAA), and the Association of National Advertisers (ANA) to encourage more transparency with respect to behavioral advertising. The new program requires participating companies to display an “advertising option icon” (pictured below) within or in close proximity to advertisements and web pages that allow data to be collected for behavioral advertising. The icon will provide consumers with information about marketers that are collecting their information for behavioral advertising. The goal of the icon is to provide consumers with more control over their online privacy.

The advertising option icon will be displayed on participating marketers’ advertisements. Upon clicking on the icon, a consumer will be redirected to a web page that describes the company’s data collection procedures and how they may be used for behavioral advertising. Consumers will be given the option to opt-out.  The industry groups are currently attempting to get more companies to register and agree to comply with the program. As more companies register, the opt-out list will be compiled and made available to consumers so that they can view all marketing firms that have tracked them and opt-out of any or all of their programs.

Behavioral advertising is often used by online marketers to more effectively target their advertising campaigns. This form of advertisement is accomplished through the use of cookies and other technologies to track consumers’ behaviors, searches, and interests. For example, a consumer that frequently searches for information about televisions and visits websites about new television technologies may have advertisements from television manufacturers and cable companies appear in ad spaces on their screen. Many marketers view behavioral advertising as an effective technique that screens advertisements so that they only target consumers who may have an interest in their products. Many consumers, on the other hand, view it as an invasion of privacy. This new plan strikes a balance between both views.

Although compliance with the program is currently optional, beginning in 2011, the Council of Better Business Bureaus (CBBB) and the DMA will be monitoring companies’ compliance with the plan and may, where necessary, report those companies that fail to comply to the Federal Trade Commission (FTC). Additionally, companies that agree to comply with the program, but fail to do so may be in violation of Section 5 of the FTC Act.

The advertising option icon marks a new step toward consumer privacy and an effort by the online marketing industry to self-regulate. The decision of the FTC to step-in more heavily may rest on the outcome of plans such as these.

Arent Fox previously reported on industry groups coming together to form the policies that eventually lead to this new program. You may access that article here. Arent Fox will continue to monitor this issue. Please contact Anthony V. Lupo, Sarah Bruno, or Eva Pulliam with any questions.