Ad Industry Attempts to Self-Regulate Behavioral Advertising

Online advertisements are becoming more personalized based on your behavior. Googling about cougar migrating habits in South America? Likely, ads will show up for cougar breeding habits in your local area code. It’s called behavioral advertising, advertisers use it to customize ads based on your online activity–a method that many consider an invasion of privacy. Soon, however, we may gain some control over how we’re tracked on the Internet.

On Monday, the ad industry launched a self-regulatory program to make behavioral advertising more transparent. Under the new standards, advertisers will include an icon next to ads that track online behavior. Users can click the icon to view a disclosure statement or opt out of being monitored. Companies taking part in the program will display the “Advertising Option Icon” shown to the left, in exchange for a $5,000 fee.

The program is part of a widespread effort by advertisers to make privacy policies more understandable, and to avoid federal regulation. This particular effort, led the industry’s largest trade associations (American Advertising Federation, Direct Marketing Association, etc.), follows pressure from the FTC for more self-regulation in behavior advertising. Two online privacy bills are already floating around Congress that could have a big impact on Internet ads too.

But this is not the first time the ad industry has attempted to hamper criticism of its privacy policy. Google, for example, has made available its Ads Preferences Manager, which enables users to understand why certain ads are shown, to change which ads are shown, or to opt out of the system entirely.

Yet for every 15 people who actually visit the Ads Preferences Manager, only one decides to turn off behavioral ads. Maybe the industry needs a sharper sales pitch?AC