There have been a few developments since my last post related to privacy legislation governing behavioral targeting, so here are a few noteworthy updates. While I thought a draft bill would have been introduced to the House Committee on Energy and Commerce before the end of 2009, I certainly did not hear anyone in the online advertising industry complaining about it.

There have been, however, plenty of complaints registered in recent months over a plan currently being negotiated in the Senate Banking Committee that would create an independent Consumer Financial Protection Agency and reauthorize the Federal Trade Commission as part of pending finance reform legislation.

The plan attracted new attention from the industry last week when the IAB and other trade groups sent a letter to the Committee warning that the FTC could become too powerful under such a plan. Pace Lattin’s view was more entertaining than most news coverage of the topic and my favorite post since the ADBUMB founder launched his new blog, Industry Pace. The current political climate is one likely to see financial reform bill pass, however both The Huffington Post  and Fox Business report that bipartisan support for financial reform may hinge on dropping the CFPA issue.

Meanwhile, efforts in the House by Reps. Boucher and Stearns to introduce consumer privacy legislation that could mandate an opt-in consent for data collection remain in hearings before the Subcommittee on Commerce, Trade and Consumer Protection, most recently Exploring the Offline and Online Collection and Use of Consumer Information on Thursday, November  19, 2009.

Kudos to the entire industry’s aggressive self-regulatory efforts in staving off any harmful legislation so far, and especially the leadership of Randall Rothenberg ,whose recent op-ed piece in The Hill did a great job of defending our collective position on the topic.

On the heels of the 2009 election which included some important mayoral and gubernatorial races and ballot initiatives, I’m pleased to participate in the E-Voter Institute webinar “Looking Into the Crystal Ball: Primaries 2010” on Thursday, November 6, 2009 at noon PT. Attendees will receive a copy of the Institute’s new book About Face: The Dramatic Impact of the Internet on Politics and Advocacywhich includes two chapters I authored on lead generation and the use of video in political marketing online.

In addition to showing the kind of voter information that can be sourced using comScore’s Plan Metrix psychographic data (includes “political activities,” “political outlook” and “political affiliations”), I will be presenting various ways for political marketers to reach and persuade voters online. From basic demo/psycho/contextual/technographic targeting to more sophisticated forms of behavioral targeting and use of third party data to identify voters while keeping within bounds of current regulatory guidelines surrounding online behavioral advertising.

I’ll also be speaking about the impact of creative in persuading voters, the ability to measure the effectiveness of persuasion efforts and the importance of making online advertising just one aspect of a good integrated plan that takes into consideration fundamental political marketing concepts and the integrated use of offline media, search and social media.

If you’re reading this before noon PT on 11/6/09, it’s not too late to join us! Or please forward this link to any of your politically minded marketing colleagues.

Rep. Rick Boucher (D-Va.) has preliminarily outlined legislation he will  introduce to regulate consumer privacy in a thoughtful editorial in The Hill entitled “Behavioral ads: The need for privacy protection.” In a separate interview related to net neutrality, he stated that he hoped the bi-partisan legislation would be introduced before Congress adjourns on October 30.

In the article, Boucher clearly articulates the issues related to how behavioral advertising impacts consumer privacy and he makes a reasonable argument for ways to give consumers assurances  about what data is being collected about them without disrupting the online advertising and e-commerce ecosystem. Particularly encouraging is his recognition of the fact that behavioral targeting tailors ads to consumers’ interests and helps keep Internet content free.  

From the article it sounds like Boucher ”gets it,” but there were plenty of details left unstated and the lobbying efforts of industry associations and companies with a stake in the outcome will no-doubt continue up until the deadline. It will be interesting to read the finer points of the legislation and it looks like a bill may now be just weeks away.

2009 has been an active year for self-regulation efforts on the part of the online advertising industry, led in large part by signals from the FTC that it may act to regulate behavioral advertising to protect consumer privacy. Associated Press coverage of the debate last week is a clue things are heating up, and this week the FTC announced it will host a hearing on the topic on December 7. Battle lines are being drawn between consumer privacy advocates on one hand and industry trade organizations on the other who are mobilizing to assemble self-regulatory guidelines to head off legislation.

It’s a foregone conclusion that Reps. Rick Boucher (D-VA) and Cliff Stearns (R-FL) are drafting an online privacy bill that would govern the collection and use of consumer online behavior. While the debate may go from sub-committee to the full Energy and Commerce committee this fall, it is looking less likely that legislation will be heard by full House of Representatives in 2009.

What’s at issue primarily is the collection and use of behavioral data, the control consumers have over their own data and the likely harm, or lack therof, that could come from the data depending upon your position in the online advertising ecosystem.

Here is a roundup of publicly available information regarding where the FTC, key trade groups and Congress stand on the issues as of today.

December 16, 2008

Network Advertising Initiative Announces 2008 NAI Self-Regulatory Code of Conduct for Online Behavioral Advertising http://networkadvertising.org/networks/2008_NAI_Principles_PR_FINAL.pdf

February 12, 2009

FTC Staff Revises Online Behavioral Advertising Principles
http://www.ftc.gov/opa/2009/02/behavad.shtm

June 18, 2009

U.S. House of Representatives – Committee on Energy and Commerce – Subcommittee on Commerce, Trade and Consumer Protection – Hearing on Behavioral Advertising: Industry Practices and Consumers’ Expectations
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1678:energy-and-commerce-subcommittee-hearing-on-behavioral-advertising-industry-practices-and-consumers-expectations&catid=129:subcommittee-on-commerce-trade-and-consumer-protection&Itemid=70

July 2, 2009

Key Trade Groups Release Comprehensive Privacy Principles for Use and Collection of Behavioral Data in Online Advertising http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-070209
http://www.iab.net/media/file/ven-principles-07-01-09.pdf

September, 2009 

Privacy groups release “Online Behavioral Tracking and Targeting, Legislative Primer” http://www.uspirg.org/uploads/s6/9h/s69h7ytWnmbOJE-V2uGd4w/Online-Privacy—Legislative-Primer.pdf

Here are a few recent articles related to online behavioral advertising you may find of interest:

Four Privacy Protections the Online Ad Industry Left Out
http://bits.blogs.nytimes.com/2009/07/06/four-privacy-protections-the-ad-industry-left-out/?ref=technology

FTC Hires Privacy Blogger
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=111800#comments

Fresh Views at Agency Overseeing Online Ads
http://www.nytimes.com/2009/08/05/business/media/05ftc.html

The FTC Takes On Targeted Web Ads
http://www.businessweek.com/technology/content/aug2009/tc2009082_486167.htm

Privacy Groups Aim for FTC to Help Guide Online Privacy Law

http://www.clickz.com/3634859

Knowing firsthand the logistical and political issues creating industry guidelines can create, I’ve been impressed by our ability as an industry to move quickly in response to the FTC’s mandate earlier this year for more industry self regulation around behavioral advertising. A consortium including the IAB, DMA, 4As, BBB and the ANA this week published its Self-Regulatory Principles for Online Behavioral Advertising. Though many details and the motives of various segments of the industry are understantibly excluded, the document is evidence that the industry is truly aligned behind these important trade organizations.

Much more water needs to travel under this bridge, and it’s difficult to know if the principles as outlined will keep federal legislation at bay, but they are straightforward, comprehensive, well-intended and easily digested.

Speaking from my own bias, I am encouraged that service providers required to get permission to track behavioral data does not appear to include display advertising networks. Whatever happens next, I’m confiden our collective education efforts will result in Congress understanding that companies that do not have access to personally identifiable information should not be held to the same opt-in behavioral targeting standard as those that do.

I’m impressed by how the Interactive Advertising Bureau has stepped up to answer the call for industry self regulation and the creative ways it is demonstrating to Congress and the FTC the importance of online advertising to the U.S. economy. In a a report out today entitled “Economic Value of the Advertising-Supported Internet Ecosystem,” the IAB suggests online advertising is responsible for employing 3.1 million Americans and generating $300 billion, or 2.1 percent of the U.S. GDP.

Coinciding with the release of the report, this week the IAB is hosting a series of meetings and a press conference in Washington, D.C. dubbed the “IAB Long Tail Alliance Fly-In.” The event is intended to put real faces to the individuals and small businesses that benefit from online advertising and comprise a portion of the revenue and jobs cited in the Economic Value report. Some of those faces are represented in this video called “I Am the Long Tail.”

The report and this week’s activities in D.C. are a testament to Randy Rothenberg’s leadership and have created a strong foundation for demonstrating that our industry takes seriously the call for self-regulation. But the rubber will meet the road when the IAB and other trade groups with whom it has partnered publish more formal recommendations about how to allay consumer and regulator concerns surrounding behavioral targeting and consumer privacy protection.