• by Wendy Davis  @wendyndavis, June 11, 2008

The Interactive Advertising Bureau is stepping up its campaign against a pending New York law that would regulate online advertising.

In its latest move, the organization announced a new, discounted membership of $500 a year for online publishers with less than $1 million in revenue, in hopes of spurring more small companies to join.

In the past, membership cost at least $5,000 a year, so the new price is a significant discount, but the IAB is still considering the extent of the rights that the new class of members will have. For now, however, the organization hopes that small publishers will participate in a lobbying effort against the proposed New York bill, said Mike Zaneis, vice president for public policy at the IAB.

"There are thousands of small Web sites that are based in New York City and throughout the state," Zaneis said. "You can imagine them organizing and coming to tell their point of view about why these regulations would hurt their business model."

The most recent version of the pending New York law, which was revised last week, says that no online publishers or ad networks may collect personally identifiable information in order to send targeted ads to users without their consent. The legislation also defines that term as data that "by itself can be used to identify, contact or locate a person," including name and address.

The pending act also would require online advertisers and publishers that send ads to users based on their Web activity to give people the opportunity to opt out-of such targeting. Assemblyman Richard Brodsky is sponsoring the measure.

Currently, many big ad networks say they do not collect data that would personally identify people, but rather gather information about Web-surfing habits anonymously, store that information on cookies placed on people's computers anonymously, and then use those cookies to serve ads to users who fall within particular marketing buckets.

Many large ad networks also belong to the Network Advertising Initiative, which already requires members to give people the opportunity to opt out of receiving targeted ads.

But Zaneis said that the bill still could hurt small publishers because it's not clear that they all use ad networks that belong to the Network Advertising Initiative or that allow Web users to opt-out of targeted ads.

The introduction to the bill makes it clear that the intention is to regulate serving ads based on data collected as a result of tracking users. "There is a fundamental rift between tracking technology and consumers' right to control what data is collected and where it goes," the bill states. "This act establishes provisions to allow consumers the ability to simply opt-out of being monitored on the Internet."

The IAB's efforts to defeat this particular bill might end up being moot, because the New York legislature will recess on June 23. If no action is taken on the bill in that time, it will die. In that event, Brodsky intends to introduce new legislation, but it won't be taken up until 2009.