The Department of Commerce’s Internet Policy Task Force recently initiated a comprehensive review of the nexus between privacy and innovation in the Internet economy, seeking public comment from all Internet stakeholders. The Department intends to analyze the comments received and then issue a report that will contribute to the Administration’s domestic policy and international engagement in the area of Internet commerce.
The NAI yesterday filed comments with the Department addressing specific questions posed in its Notice of Inquiry as applied in the context of online behavioral advertising. Our comments discuss how the free flow of data has been critical to innovation on the Internet by enabling advertising models that permit increasingly diverse content and services to be offered to consumers free of charge. We then address some of the Department’s questions with respect to the U.S. privacy framework going forward, with particular emphasis on the importance of self-regulation. Finally, we describe privacy-enhancing technologies that have recently been developed by the NAI and its member companies to offer consumers greater transparency and choice with respect to the collection and use of data for online advertising, including the development of technical specifications for in-ad notice, ad preference managers developed by various NAI member companies, and the NAI’s durable opt-out protector.
The NAI’s comments can be found here. We look forward to working with the Department and other policymakers in addressing these important issues.
–Meredith Halama, NAI Assistant General Counsel, Policy
The NAI and IAB have released the CLEAR (Control Links for Education and Advertising Responsibly) Ad Notice Technical Specifications. Read the CLEAR Ad Notice Technical Specifications and the accompanying release.
The CLEAR specification provides a template for data that can travel with an ad (metadata), which provides information about the companies involved in that ad placement, whether behavioral information was used, and how to exercise choices regarding such advertising. The information conveyed through metadata will give publishers, advertisers, and ad networks the flexibility to adopt innovative approaches to enhanced consumer disclosures.
As the digital advertising industry moves to deploy a clickable icon in or near online ads, the CLEAR specification provides a technical foundation that will enable consumers who click the icon to receive detailed information about ads based on their interests and behaviors.
Industry agreement on this specification is an important step forward towards implementation of enhanced notice, and the NAI looks forward to working with other leading associations to begin testing and deployment.
–Chuck Curran, NAI Executive Director
Yahoo! is one of several NAI member companies that have introduced tools that give consumers an enhanced ability to view and manage their online advertising preferences. We’ve provided links to some of these tools on the right side of the NAI Blog page (“Member Initiatives: Ad Interest Managers”).
Anne Toth, Yahoo!’s VP & Head of Privacy, recently appeared on ABC News to discuss Yahoo!’s Ad Interest Manager. The Yahoo! ad interest manager lets users select or de-select the types of preference categories used to show them relevant advertising. As Anne said, “It’s about empowering the consumer to manage their online experience, and make it even more relevant to them.” Preference management tools like Yahoo!’s give users transparency into the ad categories used to provide them with online advertisements. As the NAI’s recent study shows, more relevant advertising is an important revenue source for Web content and services providers offering consumers such services free of charge.
Check out the video here.
Today the NAI is releasing a first-of-its-kind study about the economic value of behavioral advertising. The study was conducted by former FTC Consumer Protection Bureau Chief Howard Beales, based on data from twelve NAI members with total ad revenue of $3.32 billion in 2009. Read the study and the NAI’s accompanying press release.
The study finds that behavioral-targeted ads sell for twice the price and offer twice the effectiveness of ordinary run-of-network advertising. This added revenue flows back to publishers: the survey found that more than half (54.6%) of revenue went towards the purchase of advertising inventory. The study also finds that behavioral advertising revenue accounted for an average of 17.9% of the survey respondents’ overall revenue.
The Beales/NAI study highlights the importance of behavioral targeting to the advertising model that supports free online content and services for consumers. The growing significance of behavioral advertising as a source of revenue for Internet content and services providers underscores the need for careful consideration of policies that would affect the current advertising marketplace and the innovation it supports.
We hope that this new economic data will help inform the public policy debate, and the NAI will be filing the study as a comment for the FTC’s “Exploring Privacy” Roundtable process.
Chuck Curran
NAI Executive Director
For its third town hall on online privacy issues, the FTC asked for comment from the online advertising industry and other interested parties on how we could achieve accountability for best practices or standards for commercial handling of data. The NAI filed comments on that issue last week that we thought might be of interest. NAIFTCThirdRoundtableComments
Our comments focus on how the NAI’s self-regulatory program helps ensure compliance by the 40 companies who have pledged to abide by the NAI’s code for online behavioral advertising. We also review how the NAI’s compliance process serves as an effective “first line” of accountability that helps the government by allowing it to focus its enforcement efforts on emerging privacy threats and true “bad actors.” We also discuss the breadth of participation in the NAI’s compliance program by companies in the OBA marketplace and how such broad participation in self regulation promotes continued technological innovation for consumer privacy protection and the adoption of best practices. We encourage you to take a look and see what you think.
–Chuck Curran, NAI Executive Director
The NAI is a coalition of leading online advertising companies that are committed to building consumer awareness and reinforcing responsible business and data practices.
In the past year the NAI has grown substantially, and we now include 40 companies, including all ten of the largest online advertising networks.
Both the NAI and its member companies are working on a variety of significant initiatives to enhance consumer transparency and choice for online behavioral advertising. We’re starting this blog as way for both the NAI and its member companies to share their perspectives about the online advertising industry; data and privacy practices; emerging technologies; and public policy.
Toward that goal, we’d like to share a few of the resources and tools available through the NAI site.
First, the NAI may be best known for its “opt-out” tool through which consumers have a centralized mechanism for choosing whether they want to opt out of online behavioral advertising by some or all of the NAI’s member companies.
· NAI Opt-out Tool: http://www.networkadvertising.org/managing/opt_out.asp
The NAI offers an FAQ answering common consumer questions:
· NAI FAQ: http://www.networkadvertising.org/managing/faqs.asp
To educate consumers about online advertising, we’ve also established a page with helpful videos and links:
· NAI Education: http://www.networkadvertising.org/managing/learn_more.asp
There are other links available on this blog detailing the NAI’s work on compliance issues, technological initiatives by NAI member companies, as well as a listing of blogs from other industry and advocacy organizations who are part of the dialogue about best practices for online advertising.
The NAI and its members look forward to continuing this important conversation.
Rob Gratchner, Microsoft
NAI Board Chairman
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