• by Wendy Davis  @wendyndavis, January 18, 2011

Faced with federal regulators' calls for a do-not-track mechanism as well as the threat of new legislation, the Association of National Advertisers on Tuesday asked marketers to follow the industry's self-regulatory guidelines for online behavioral targeting.

"Without broad industry support, our self-regulatory efforts are likely to be supplemented by new restrictions imposed by the government that the advertising community will in all probability not favor," Bob Liodice, president and CEO of the ANA, said in a statement that went out on Tuesday to 30,000 ANA members.

The self-regulatory guidelines require that companies that track consumers online in order to serve them with targeted ads both notify consumers about the system and allow them to opt out. The guidelines were developed by a coalition including the Interactive Advertising Bureau, ANA, American Association of Advertising Agencies and Direct Marketing Association, and supported by the Council of Better Business Bureaus.

The umbrella group Digital Advertising Alliance is licensing use of an icon -- an 'i' inside a triangle pointing to the right -- on ads that use data, while the startup Evidon (formerly Better Advertising) is monitoring compliance.

But whether the initiative will be enough to stave off regulation remains unknown. The Federal Trade Commission recently proposed that Web companies voluntarily create a do-not-track mechanism that would enable users to opt out of all online data collection.

In addition, the Commerce Department recently issued a report urging ad industry groups and consumer advocates to work together to develop enforceable self-regulatory privacy policies based on Fair Information Practices principles.

FTC Chairman Jon Leibowitz recently criticized the ad industry for taking too long to launch the icon initiative -- which was under development for more than one year.

ANA Executive Vice President Dan Jaffe says deploying the icons took a long time because doing so proved technologically complex. "This has not been easy," he says. He adds that setting up the behavioral advertising self-regulatory system has been "far harder" than setting up any other similar programs he has been involved with, including the Children's Advertising Review Unit of the Better Business Bureau (which deals with ads geared toward minors).

Some privacy advocates say they are unimpressed with the self-regulatory effort, including the icon initiative. Jeff Chester, executive director of the Center for Digital Democracy, says his organization plans to file comments with the FTC criticizing the icons. "They don't protect privacy," he says adding that their placement on ads isn't prominent enough to be noticed by many consumers. "They do not permit consumers to make a meaningful choice."