• by Kate Kaye , December 6, 2002

Some say you’re only as good as the tools you use. Imagine being hired to construct a chest of drawers with an empty tool chest.

That’s what all sorts of online service providers have been up against due to the negative perception of the very technologies they employ to do their jobs. A recent self-regulatory effort by a cooperative group of network advertising companies, The Network Advertising Initiative (NAI), aims to counteract the industry’s somewhat underhanded reputation by developing a set of “Web Beacon” guidelines.

Essentially, Web Beacons are strings of code used to transfer data and track Web usage; for instance, cookies that enable site or email personalization, or technologies that track unique visitor traffic or user interaction would all fall under the Web Beacon heading.

“It’s clear that Web Beacons are ubiquitous online today,” comments J. Trevor Hughes, NAI’s executive director. “The top 50 sites may have 20 different operations occurring on various pages of a site that may be associated with Web Beacons; they’re incredibly important and also an incredibly mundane tool.”

Despite their proliferation, many of the NAI’s members (mainly ad serving firms and analytic research reporters) were struggling with the negative perception of Web Beacons as surreptitious tracking devices. Analytical service provider members such as Coremetrics and WebSideStory rely on these tools to do even their basic reporting. Still, according to Hughes, some of their customers have said “no” or have been “hesitant” about employing Web Beacons.

“Some people might have, two years ago, been afraid of having disclosure of Web Beacons,” explains Bennie Smith, chief privacy officer at DoubleClick, “but our clients felt their customers wanted to know more and felt good about knowing more.”

Recognizing the need for understanding and education, NAI members including 24/7 Real Media, Avenue A’s Atlas DMT and DoubleClick, as well as companies such as Microsoft and Verizon, and industry watchdogs TRUSTe and the Council of Better Business Bureaus’ BBBOnline were all involved in developing the guidelines. Even the US Postal Service played a role. Although not an NAI member, the Postal Service provides goods and services via a robust site that uses Web Beacons; yet, despite its market-driven motives, its government affiliation holds it to a higher ethical code.

After six months, guidelines have been drafted which require notice of Web Beacons on websites and disclosure of how and why they’re used. In addition, compliance requires that a choice to opt-in or -out be given to users when websites transfer personally identifying data to third parties for purposes unrelated to the originally intended use of that information. These third parties do not necessarily include agents that have been contracted to provide tracking services for the website. The guidelines will also become part of TRUSTe’s privacy seal program.

Hughes stresses that “most major sites” provide appropriate notice already. However, in addition to relieving consumer concern, the guidelines could prevent the need for government regulation.

“Often industry is ahead,” observes Zoe Strickland, chief privacy officer of the USPS, “and government can look to industry in terms of guidance.” According to Bethany Matz, staff attorney in the Federal Trade Commission’s Bureau of Consumer Protection, the FTC staff agrees. They “view the Web Beacon guidelines as a useful self-regulatory effort.”