• by Wendy Davis  @wendyndavis, February 8, 2008

The Interactive Advertising Bureau Thursday issued best practices guidelines for online lead generation, saying its recommendations will help the industry grow while building trust with consumers. But the guidelines immediately sparked criticism by another trade group, the Online Lead Generation Association, which says the recommendations don't adequately protect consumers from being bombarded with unwanted e-mail ads.

The IAB's voluntary guidelines state that Web publishers should ask consumers for permission to share their e-mail addresses with other marketers. But the IAB is not recommending that publishers name the specific marketers it will share information with.

OLGA, however, argues that publishers should tell consumers which other marketers will receive their e-mail addresses and obtain consent for each. Otherwise, the group says, consumers might find themselves "receiving hundreds of emails a day as a result of one offer sign-up."

"Consumers lose confidence in signing up for an offer because they don't know for sure where their names are going," said Jere Doyle, a member of OLGA and president and CEO of online marketing company Prospectiv.

OLGA had unsuccessfully pressed for language stating, "Data should not be shared with or sold to un-named or anonymous third party marketers."

Gayle Guzzardo, who chaired the IAB Lead Generation Committee, said the IAB rejected the suggestion that publishers should name each marketing partner, because doing so might put publishers at a competitive disadvantage.

"We thought it would be not in the best interest of the publishers to specifically list every partner that they work with on their registration page," said Guzzardo, senior vice president, product management at Q Interactive.

She added that the IAB principles mark a critical step towards protecting consumers online. "These guidelines took the industry forward by leaps and bounds," she said. "They clearly state that publishers cannot share consumer data without clear disclosure to the consumer and that is outlined many times within the document."

"The document certainly is not final," she added. "It's a living and breathing document and as the marketplace changes, the document will change along with it."

The IAB's 13-page best practices guidelines also has a host of other provisions, including recommendations that advertisers and publishers obtain legal advice about online lead generation, have clear privacy policies and give consumers notice when the privacy policy changes.

In addition, the IAB guidelines address the use of the word "free" in ads--a subject that has recently drawn Federal Trade Commission scrutiny. Here, the IAB guidelines distinguish between ads that require consumers to make a purchase before receiving free merchandise, and those that require participation in a program, but don't force consumers to spend money.

The IAB recommends that disclaimers indicating a purchase is required should appear in the same color, font and size as the word "free." But where a purchase isn't required, the IAB recommends the disclaimer be in the same color and font as free, but is silent as to the size of the print.

That distinction is critical for ValueClick, which has representatives on the IAB committee that developed the guidelines and is currently in settlement talks with the FTC over the use of "free" in its ads. ValueClick's John Ardis, vice president for corporate strategy, says that the company's offers for free merchandise tend to require consumer participation, such as signing up for a trial membership or newsletter, and not purchases. Therefore, the IAB guidelines would suggest that ValueClick disclaimers appear in the same color and font as "free," but not necessarily the same size.

It's unclear whether the FTC intends to make that same distinction. The agency recently settled charges against two companies, Adteractive and Member Source Media, who allegedly lured consumers to sign up for paid subscriptions with promises of "free" iPods and the like. Those settlements require that purchase-required disclaimers appear in the same color, font and size as the word "free."