• by Wendy Davis , Staff Writer @wendyndavis, April 11, 2008

Comments on the FTC's proposed behavioral targeting and privacy guidelines are due today, and a broad array of online companies, advertisers and advocates are weighing in with suggestions.

Ad industry players are urging the FTC not to impose any new regulations -- and also argue that the proposed voluntary guidelines are too restrictive. A filing by a consortium of marketing organizations -- including the American Advertising Federation, American Association of Advertising Agencies, Association of National Advertisers, Interactive Advertising Bureau, Magazine Publishers of America and U.S. Chamber of Commerce -- says that the FTC shouldn't be proposing guidelines without proof that consumers are harmed by behavioral targeting.

They also argue that the new proposals would hurt marketers' ability to continue to subsidize free content with ads.

Privacy advocates, on the other hand, want to see rules that will require companies to honor Web users' preferences about whether they wish to be tracked online and to receive targeted ads.

To a large extent, the Center for Digital Democracy and U.S. Public Interest Research Group helped kick off the current debate in November 2006, when they filed an FTC complaint seeking a probe of behavioral targeting. Since then, the CDD, along with other privacy groups, have forcefully advocated for increased protections for consumers. Today, the CDD will file new papers with the FTC, seeking specific rules about using behavioral targeting techniques to target children, teens, or to target people based on medical or financial data.

The Network Advertising Initiative has already made some concessions on the margins. This week, that organization released its own new proposed standards, including a ban on behavioral targeting to children under 13 and an opt-in regime for "sensitive" data like medical conditions.

But consumer advocates still want to see new rules, rather than rely on voluntary compliance with trade groups. "The proposed FTC staff principles, while well meaning, simply don't go far enough in ensuring that every U.S. citizen and consumer is afforded meaningful protections in the digital marketing era," the CDD states in comments submitted today.

Google, meanwhile, is especially concerned that the standards could affect search ads. In comments to the FTC, Google said it's testing personalized search results, and argued that search ads shouldn't be considered "behavioral" even when the ads displayed to users are based on their search history.

"We are currently experimenting in our Search service with providing ads based on both the current query and the immediately previous search," Google wrote. "For example, a user who types 'Italy vacation' into the Google search box might see ads about Tuscany or affordable flights to Rome. If the user were to subsequently search for 'weather,' we might assume that there is a link between 'Italy vacation' and 'weather' and deliver ads regarding local weather conditions in Italy."

Google rival Microsoft, on the other hand, said it supports the FTC's goals and that the proposed guidelines should be extended "to include the full array of online advertising activities."