New Privacy Guidelines? Not So Impressive.

Most people don’t want their online activities to be tracked by advertisers.  So it should come as good news that the Digital Advertising Alliance just released new privacy guidelines governing the collection of consumer data for “non-behavioral advertising” purposes.

The FTC heralded the new guidelines as “an important step for consumers and for self-regulation.”  But are the new guidelines as important as the FTC claims them to be?

I don't think so. 

I don’t think the new guidelines say anything that we haven't seen before and, in many ways, simply re-state the obvious.  Historically, the Alliance has experienced only marginal success implementing privacy-related guidelines, and I’m not optimistic that the Alliance’s latest set of policies will fare any better. 

Some Definitions. 

“Behavioral advertising” is the art of tracking of a consumer’s online activities over time—including the searches the consumer has conducted, the web pages visited, and the content viewed—in order to deliver advertising targeted to the individual consumer’s interests.  (Think “big brother” meets “super cookies”). 

Most consumers find behavioral advertising surprisingly invasive—but it works.  In fact, studies show that behavioral advertising is at least twice as effective as non-behavioral advertising.  With that kind of ROI, we expect the use of behavioral advertising to increase exponentially over the next few years.

“Non-behavioral advertising” is everything else, i.e., no long term tracking of sites visited, and no cross-referencing a consumer’s online behavior across multiple sites.  It’s the type of relatively minor tracking activity that consumers have come to expect from commercial websites. 

The New Guidelines--An Improvement?.

A few years ago, the Alliance released a set of guiding principles for online behavioral advertising activities.  Those principles, which can be read HERE, were roundly criticized for failing to address the non-behavioral advertising side of the industry.

In response to that criticism, the Alliance released its latest set of principles which can be found HERE.  They are entitled, “Self-Regulatory Principles for Multi-Site Data”—which brings me to the first issue I have with the new principles. 

Why name them something that most people don’t understand?  What is “Multi-Site Data”?  Granted, the term is explained in the text of the principles themselves—but why not replace the term “Multi-Site Data” with “Non-Behavioral Advertising” or something similar?

But I digress.

The new “multi-site data” principles address the privacy issues raised by non-behavioral advertising activities by requiring ad companies to “provide consumers with transparency and consumer control.”

The funny thing, however, is that the Alliance doesn’t define the terms “transparency” and “consumer control.”  Now, one could argue that those are common phrases and, therefore, they are subject to common understanding and definition.  But remember: in advertising, nothing is common.  Advertising is about the uncommon.  It’s about the unique.  In the world of digital advertising, common phrases can easily elude common definition.

But again, I digress.

The new principles state that ad companies should comply with the federal Children’s Online Privacy and Protection Act (also known as “COPPA”).  They also state that ad companies should not collect and use data containing financial account numbers, Social Security numbers or medical records without the consumer’s consent. 

In other words, the principles say that ad companies should follow the law. 

So, is that news?  Am I missing something here?  Since when do we celebrate a proclamation that companies should follow the mandates of HIPAA, or the Gramm Leach Bliley Act, or the Fair Credit Reporting Act, or several state laws (such as California’s Civil Code § 1798.85)?  Have we reached such a low point that we now need to applaud industry principles that merely re-emphasize the importance of acting both legally and ethically?

I understand that the Alliance is merely trying to reign in the improper and over-ambitious advertising schemes employed by some of its members.  But let’s not kid ourselves: the new principles don’t tread too deeply into the waters of consumer privacy.  They are suggestive, not mandatory.  There are no serious penalties for non-compliance.  For that reason, many companies will simply ignore the principles for the sake of increasing their customers’ ROI.

The new principles don’t go into effect until next year, so we will have to wait a while longer to determine whether they are effective or not.  My (early) prediction is “not".