Publishers get more self-regulation choices for online advertising

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Since the online ad industry launched its self-regulatory campaign, more providers have come on board to enable icons allowing consumers to opt out of behaviorally targeted ads. But the most effective method to offer consumer ad choice ― and whether it should be government-led ― is still not clear.

The first  display ads featuring the AdChoices icons started appearing last fall from Evidon (formerly Better Advertising). Publishers such as Ziff Davis have also begun to showcase the icons on their pages as part of the self-regulatory program by the Digital Advertising Alliance.
 
In the last month, two more providers have been certified as compliance solutions for the program by the DAA: DoubleVerify and TRUSTe. In addition to providing opt-out capabilities, the services provide reporting about how many people opt out and how many icons are served. While all of the providers follow the standards of the DAA, they also offer some unique features.
 

Where to opt out?

TRUSTe, which announced certification this week, tested its beta service with Publisher's Clearing House. As other tests have demonstrated, most consumers didn't bother opting out: Only about 1 percent clicked on the icon and only about 1 percent of that group changed ad preferences. In a survey given to users after they visited the icon, more than half reported it was helpful ― most indicating that they didn't know about behavioral targeting beforehand, TRUSTe CEO Chris Babel said at Mediabistro's Digital Privacy Forum conference Thursday in New York. Ziff Davis displays the AdChoices icon certified by online advertising industry self-regulation efforts.
 
Because of the consumer lack of understanding about ad targeting, many of the icons offer educational content. Babel told me the TRUSTe service aims to be an educational vehicle for consumers, rather than just a way to opt out of targeting. When consumers are directed into the opt-out widget, they can also view information about behavioral targeting, he said.
 
But are opt-out options really making the issue more transparent for consumers? Consumers who click the icon to opt out are directed to a list of ad networks they've probably never heard of. PreferenceCentral, a solution from Datran Media, offers an interesting  approach by allowing consumers to opt out by brand rather than only by ad networks. Giving consumers a list of ad networks to opt out from is “giving them choice they don't understand,” explained Steven Vine, chief privacy officer at PreferenceCentral. 
 
Two years ago when the regulations were being formed, there weren't so many ad networks, but now there are hundreds of data companies, he noted. “I think our industry needs to start moving away from the ad network choice.” 
 
PreferenceCentral has not yet been officially certified by the DAA; they've gone through the approval process, but haven't signed the contract, Vine said. PreferenceCentral is pushing for the DAA to clarify standards to include features such as a global opt-out function, where consumers can opt out of many networks at once (rather than what's on the page at that time).
 

What's next for behavioral advertising?

All of this self-regulation isn't necessarily going to stop the FTC's “Do Not Track” proposal or other privacy legislation/regulation that has increasing momentum. Marc Rotenberg, executive director of the Electronic Privacy Information Center, a privacy advocacy organization, said proposals to regulate interactive advertising have a lot of support in Washington. He likened Do Not Track to the Do Not Call Registry, which he said is viewed as one of the most successful government programs of all time. "In fact Do Not Call has been so successful that more people have signed up for it than voted in the latest presidential election,” he said at the Digital Privacy Forum.
 
"The view in Washington increasingly is that there is a need for legislation and the privacy of users needs to be respected,” he said. He argued that it won't be a burden that slows innovation in the online advertising world: “With smart regulation and forward-looking principals … We can have some of the most brilliant insight and brilliant solutions possible." 
 
The consensus from many in the industry, including Vine and Babel, seems to be that self-regulation could work without government intervention, but it's not strong enough right now. While publishers are beginning to adopt to the standards, many publishers are still not familiar enough with them. For those that want to adopt the icon, they can either receive it from a provider (most charge a small CPM-based fee, or are free like PreferenceCentral) or can license it from the DAA (publishers with behavioral advertising revenues under $2 million aren't charged a fee).  
 
Vine explained that a Do Not Track option, if executed correctly, isn't necessarily the end of behavioral advertising; it could represent emerging models for targeting online. He noted publishers could offer a Pandora-like solution in which users can choose to receive targeted ads or opt out entirely and pay a fee ― i.e. “pay or be tracked.” 
 
PreferenceCentral's research last year found that giving consumers control over targeting actually makes them more comfortable with targeted ads. In its study, 41 percent of consumers became more comfortable and were 27 percent were more willing to receive targeted, relevant ads in exchange for free content if they were given a control solution.
 
Regulation or not, publishers need to be taking charge, preserving the relationship with consumers to develop valuable trust, noted Jules Polonetsky, director of the Future of Privacy Forum, a privacy think tank supported by the advertising industry and other companies. “Publishers should be making sure ad networks are in compliance [with the self-regulation efforts],” he said. The advertising industry is finally adopting self-regulation, he noted. “It's just it ought to have been done two years ago.” 

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