Privacy, Ad Targeting, the Government

Let’s be blunt. What the Federal Trade Commission (FTC) has been telling the online ad industry is simple:

Either you create and put into practice effective ways to regulate the use of consumer data and give the public tools to control the privacy of that data, or we – and probably Congress – will impose restrictive regulations and laws on your industry.

As reported yesterday by The New York Times, one segment of the online ad industry – the Future of Privacy Forum – has implemented a first step in this process: The I-Button. This little icon (see above) is designed to be added to online ads that use demographic and behavioral data for targeting, to inform Internet users why they’re seeing that ad.

Whether or not enough marketers and publishers adopt the I-Button to make it into an industry-standard is still up in the air. But the lawyer for the five trade groups (including the IAB and the 4As) that put together the first draft of the seven self-regulatory principles called for by the FTC told the Times that “he expects that within a couple of months, many of the companies will begin running it.”

Still, as Jules Polonetsky, the co-chairman and director of the Future of Privacy Forum, described the I-Button: “This is not the full solution, but this moves the ball forward.”

The importance of addressing privacy concerns cannot be underestimated. The debate around privacy and audience data is getting increased heat from both the FTC and Congress, as well as the public. At the extreme end of user negativity, no more than 24% of respondents in a study from the Annenberg school want ads personalized by their online activities.

And 67% of the respondents in the same survey agree that consumers have lost all control over how their personal information is collected.

For more on the topic of privacy and data usage, look for my report, “Audience Ad Targeting: Data and Privacy Issues,” to be published on February 11th.