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FTC May be Backing off Do Not Track

5/24/11

By Ken Magill

With multiple do-not-track bills in Congress and one in California, the future of online advertising hasn’t been in such jeopardy since banner clicks plummeted to near zero in the late 90s.

However, the Federal Trade Commission may be showing signs of relenting on the do-not-track issue.

“I think they are backing off,” said Linda Woolley, vice president of Washington operations for the Direct Marketing Association.

“We [recently] went to the FTC and said ‘we did everything you asked us to do two years ago and haven’t gotten a lot of positive feedback on this,’” she said. “They said to us: ‘The comments you’re construing to be negative, we didn’t really intend to be negative, and we actually think you guys have done a great job on this.’”

What Woolley and the FTC were referring to is the online ad industry’s efforts at self regulation and in particular, the Advertising Option icon a coalition of marketing and advertising associations introduced in October.

Dubbed the Digital Advertising Alliance, the coalition includes the Interactive Advertising Bureau, the American Association of Advertising Agencies, the American Advertising Federation, the Association of National Advertisers, the Direct Marketing Association and Network Advertising Initiative.

The icon—a blue triangle—allows consumers to click on it, find out which of the 60 participating advertising networks have placed cookies on their computers, and opt out of any or all of them.

“If you opt out of all the networks, you will functionally be opting out of 85 percent of all behaviorally targeted ads,” said Woolley. “Obviously, we want to get to 100 percent.”

For the record, my computer has 55 networks’ cookies on it. And apparently like most people, I did not opt out of any of them.

“Most people click on the icon, find out what’s going on and they don’t opt out of the ads,” said Woolley.

Woolley and other ad industry representatives contend a do-not-track mechanism for online ads is impractical and unnecessary.

“The fear is that marketers have dossiers on people,” she said. “Marketers don’t have dossiers on people.”

She added that if Congress were to pass a law regulating the use of online marketing data—which she is not advocating—it should outlaw its use for making “eligibility decisions.”

“If the law said you can’t use marketing data to decide if someone should get health insurance, you can’t use it to figure out if someone will be a good employee, or you can’t use it to figure out if someone’s a security risk, we would be right there with them,” she said.

Woolley added that even though the FTC seems to be softening its position toward the online ad industry, she is still concerned that a do-not-track bill may become law.

“The thing you can’t underestimate is that Senator [Jay] Rockefeller [D-WV who introduced a do-not-track bill earlier this month] is chairman of the Senate Commerce Committee, which is a very powerful chairmanship,” she said. “This wasn’t just some lowly person on a committee introducing a bill. It was the chairman and we have to pay attention to that.”

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