Europe should adopt US behavioural advertising icon, and quick

Out-Law Analysis | 04 Feb 2010 | 4:19 pm | 3 min. read

OPINION: When US trade bodies announced a badge scheme for behavioural advertising this week it looked like a good way to help web users navigate a difficult new area and a good way to relax the regulators.

While UK and EU bodies say they are looking at introducing it here, they should hurry if they want to avoid more stringent Brussels-imposed regulation. The scheme looks simple and effective. Advertisers and media owners should jump on it, fast.

The launch of the US scheme was accompanied by new research on consumer attitudes to online behavioural advertising (27-page PDF).

More than 2,600 US adults were told that information about their visits to websites may be used by advertisers to decide which online advertisements they see. Almost half of respondents (46%) expressed discomfort with that practice. (Curiously, this was far fewer than in the last study (27-page PDF) on the subject, which suggested that 84% of US adults object to behavioural advertising when asked slightly different questions).

When told that websites would explain how their information would be used and give them a choice not to receive customised ads, the number of respondents expressing discomfort fell to 30%, according to the new study.

There is nothing inherently sneaky or bad about behavioural advertising except, perhaps, that users haven't been told about it until now. That secrecy is corrosive. Addressing the use of behavioural advertising in a privacy policy is not enough, yet that has been the industry's approach until now. Few people read these policies, but does anyone at all read the privacy policy of a site when they don't even realise that they're sharing information? That's why I've argued before that behavioural ads should be labelled.

The new study concluded that the right solution was an icon and a short phrase placed next to the ad, like so:

When the icon and phrase are clicked, consumers get information about the ad and the opportunity to opt out of behavioural advertising in future. It's a pragmatic, fair and usable way to make behavioural advertising transparent.

One of the US trade bodies behind the move is the Interactive Advertising Bureau, which represents site owners and advertising agencies. Its UK head of regulatory affairs Nick Stringer and European IAB vice president Kimon Zorbas have told us that they will be working with their members to extend the scheme to the UK and Europe.

It is vital for the future of behavioural advertising that they work quickly. If they don't, regulators will intervene and may over-react. That would be harmful to the publishing and advertising industries and potentially harmful to consumers because a regime that upsets the advertising ecosystem could force more sites to charge for their content.

Not all invasions of privacy are equal yet there is reason to fear a disproportionate response from Brussels, following recent meddling with cookie laws. Compared to controversies like the UK's retention of DNA profiles or, this week, the introduction of full-body scanners at Heathrow Airport, the potential harm caused by behavioural advertising is mild. A recent incident illustrates this.

A woman had used the Marks and Spencer (M&S) website to look for Champagne. She was shocked to see weeks later that ads for Champagne were appearing on a website for pre-teen girls being used by her five-year-old daughter.

The ad was published through a retargeting system, shown to that computer because it had previously been used to look for those products.

The woman contacted Alcohol Concern, which alerted M&S. The company acted quickly to remove all alcohol ads from its retargeting campaign.

This is an example of an unwanted consequence of using behavioural tracking to decide which ads should be sent to which computers. But it is also an example of a company acting quickly, transparently and responsibly to solve a problem that did appear.

Advertising a product for adults on sites aimed at children is not an inevitable consequence of behavioural advertising. This incident was merely a mistake and the harm caused by such isolated incidents will be negligible. The greatest potential harm that I can see in behavioural advertising is in discriminatory pricing. But that could breach existing laws, which is the subject of an investigation by the Office of Fair Trading, so it may be that new rules are not necessary.

Companies should learn from M&S and realise that problems dealt with in a mature and open manner rarely escalate. They should adopt that same responsible attitude pre-emptively to their behavioural ads and urge the IAB in the UK and Europe to move quickly on a labelling system.

By Struan Robertson, editor of OUT-LAW.COM. The views expressed are Struan's and do not necessarily represent those of Pinsent Masons. You can follow Struan at Twitter.com/struan99.