• by Mark Naples , May 13, 2005

Anyone who reads this space knows how seriously I take online privacy and consumer impressions of our industry. And, anyone reading last week's column knows how much I want to keep regulators and legislators out of our business as much as possible - even with legislation - just perhaps not such restrictive legislation, which now seems inevitable.

The best chance our industry has of sustaining its continued growth while diminishing online privacy concerns - perhaps the one thing that has tethered our industry from the few remaining recalcitrant consumers out there - is the Network Advertising Initiative (NAI).

On Thursday, at the Museum of Television and Radio in New York, the NAI hosted an industry event dedicated entirely to online privacy and spyware and attended exclusively by C-level executives and decision makers - perhaps 250 of them. This was a crowd comprised of essentially anyone vital to the online privacy debate.

The speakers and panelists ranged from the General Counsel to the U.S. House Committee for Energy and Commerce, David Cavicke, and the Director of the Federal Trade Commission's Bureau of Consumer Protection, Lydia Parnes, to Christine Varney, who founded the NAI and is a partner at Hogan and Hartson in Washington - along with privacy officers who shared occasionally adversarial (albeit mostly collegial) panels with consumer advocates.

One such panel featured WhenU CEO Bill Day and Claria executive vice president and privacy officer, Reed Freeman, flanking Ari Schwartz, associate director of the center for democracy and technology and a frequent, extremely visible critic of these and other companies in the adware business.

This was not an ordinary industry event.

But, online privacy is not like any other industry issue - it's sort of become our business' stigmata to many, the stain we can't seem to remove. The theme of the conference, as NAI Executive Director Trevor Hughes announced in his opening remarks, is that bad business practices hurt the entire commerce engine online. "eCommerce in the Age of Spyware" was the conference's title, and what this gathering made clear is just how essential the NAI has made itself to the sustainability of our industry.

It's not just the gathering of so many divergent, national forces and hearing them sing the praises of the NAI - from member companies to Congressional staffers - it's the leadership role exhibited by the representatives of the NAI-member companies, especially in the face of criticism from some of the opposition.

It is this leadership, more than any other factor, which has removed the most onerous provisions of the Spy Act and turned the tide of public opinion away from being directed against companies like DoubleClick, WhenU, and Claria and actually made these and other NAI member companies into the best hope our industry has for the crafting of best practices.

Of course, this is how it should be. But, anyone who's ever participated in trade associations - or representative government for that matter - has to applaud the job done by Trevor Hughes and the NAI. I expect the senior membership of the organization to gather at NAI headquarters in York, Maine this summer and hammer out meaningful best practices language - and then make it stick.

As Claria's Reed Freeman said during his panel, "Anything that adds transparency and control to the consumer's experience is a good thing for the adware industry in the long term."

And it was DoubleClick's chief privacy officer, Bennie Smith, who surmised that the industry needs to focus on executing on three action items in order to continue deserving the privilege of self-regulation. What were Smith's action items?
1. Each company on the buy side and the sell side in this industry needs to invest what's needed to get this right. For some companies, this means hiring a privacy officer. For others, it means stopping expedient business practices in favor of more sustainable tactics that may not make the quick buck. As one adware executive stated, this may halve their adware downloads. But it needs to be done if it means increasing confidence.
2. Each company on both sides of our industry needs to participate in this process. I put out a clarion call on the Spy Act last summer, and this is another call. Don't just hire a privacy officer, join the NAI if you haven't yet, and participate in this process.
3. The negative press related to privacy of late is fomenting an increase in distrust among consumers, requiring our industry to communicate to them in ways we never have before. We need some carrot messages around cookies, since consumers only hear the stick messages that appear on their spyware-removing programs. Consumers - by and large - don't much trust our industry. But, we have to trust consumers - something that only makes sense if we arm them with more transparent business practices.

Think about it - the industry's two most visible black hats on privacy-related issues from two different epochs were two of the real leaders at this event.

It was David Cavicke, the U.S. House Committee Counsel who called legislation a "crude instrument" that can do as much harm as good, and should probably be sunset in a few years anyway, owing to the pace of technology rendering it obsolete by then. With the leadership of the NAI, and the efforts of its membership, our industry shouldn't have to be subject to such crude measures.

Whether we ultimately are subject to them or not is up to us.