Ad industry moves forward on self-regulation of targeting

NMA 7th April 2011

A self-regulatory initiative for behavioural advertising will launch next week in an effort to protect the £4bn online ad industry from an implementation of EU law that could decimate it.

The Online Behavioural Advertising Framework is a way for ad firms to meet the requirements of the revised e-privacy directive coming into force on 25 May. It includes an icon to feature on all targeted ads from those companies that have signed up, which will be promoted via a pan-European ad campaign.

The revised e-privacy directive, an amendment to the EU’s Privacy and Electronic Communications Directive, will require all online businesses in the UK that collect, store and use data on visitors to their websites to gain consumer consent.

The self-regulatory framework – developed by a broad coalition of advertising, marketing and online businesses including the IAB, the World Federation of Advertisers, the European Advertising Standards Alliance, the Direct Marketing Association and ISBA – has gained signatures from the top ten UK ad networks, with more to follow including AdPepper, Jemm Media and Unanimis.

It aims to meet the notion of user consent through transparency and control. Users receiving behaviourally targeted and retargeted ads will be alerted by a privacy icon which, when clicked on, gives information on what behavioural targeting is, how the practice is achieved, and what users can do to opt out of receiving such ads through a central website, Your Online Choices.

The current expectation is that the framework will be accepted by the European Commission. The Coalition Government’s Communications Minister Ed Vaizey recently said the approach was “the sort of industry-developed solution that we see as critical to the UK’s ability to meet the requirements of the directive”. The framework has to be approved by all 27 member states of the EU, however.

It will set out obligations for signatories, including a three-phase certification and auditing process which will require them to provide clear and accessible information on behavioural targeting practice and opt-out mechanisms. A ‘trading seal’ denoting compliance will be awarded.

The policing of online behavioural advertising (OBA), as the EU calls it, is likely to fall to the Advertising Standards Authority, which so far has had involvement through the European Advertising Standards Alliance. According to Lynsay Taffe, ASA director of communications, marketing and public affairs, this would mean making sure that businesses are compliant and that inappropriate or sensitive OBA is penalised by naming and shaming, and removal of the trading seal.

The European Commission has also set out stringent KPIs for the framework that include the industry raising awareness of OBA through an online education programme.

Stephan Noller, chairman of the IAB Europe Policy Committee, said, “We promised the Commission we’d raise awareness massively. This will be the biggest campaign ever across the EU, across all OBA ads served every day. We expect a lot of people to visit the Your Online Choices site.” According to Noller, the EC has demanded the industry demonstrate the extent of OBA ad impressions.

Industry-wide support will be vital to protect the millions of pounds generated by behavioural targeting. However, the framework only covers third-party advertisers, not companies collecting, storing and using consumer data on their own sites, according to Ruth Boardman, partner at legal firm Bird & Bird and head of its international privacy and data protection group.

The principles around the framework could be extended to other areas, she said. “This is the best option for compliance if you’re engaged in third-party OBA. The principle of enhanced notice [transparency] and choice could also be applied to areas that fall outside the framework. For example, it could also form the basis of compliance for first-party OBA, or indeed non-OBA-linked cookies.”

new media age’s own research, carried out by Foviance, shows that the practice of using cookies to track user behaviour is widespread, not just by third-party advertisers, but brands and retailers too. An average site visit saw around 90 cookies delivered.

Angus Glover Wilson, chief privacy officer of Tagman – which works with brands including Virgin Atlantic, Boden and French Connection to track user behaviour across digital marketing channels to help them more fairly apportion reward – said that, as best practice, it was already enabling users to opt out. “When 25 May comes round, it’s safer to be at least honouring what’s considered best practice and making sure you know exactly which vendors are which and where they fit into legislation requirements,” he said.

When it comes to responsibility for third-party OBA, the ASA is likely to take a holistic view, but will examine each case separately. Taffe said, “It might be that we name more than one party. Media owners and agencies both have responsibility, but which it rests with primarily will come out between the networks and the advertiser. Best practice will place obligation on all parts of the industry.”

Matt Whaley, founder of ad network Jemm Media and chair of IASH, pointed out that while networks are “jumping through hoops” to meet compliance, this should be extended to third-party data providers such as Bluekai. “Anyone dealing with an ad has a responsibility and should sign up to the framework,” he said. “Anyone tracking user data should also be involved. It’s interesting that the only data provider to have signed up is AudienceScience.”

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