NARC Hopes To Curtail Privacy Laws With Bigger Board

Randall Rothenberg of NARAs part of a far-ranging effort to head off new online privacy laws, the National Advertising Review Council said Tuesday that it added Interactive Advertising Bureau President and CEO Randall Rothenberg to the board of directors.

Also joining the group's board are Direct Marketing Association President and CEO John Greco, Jr., and the Electronic Retailing Association President and CEO Julie Coons, bringing the total number of board members to 11. The new appointments mark the board's first expansion since the group was formed in 1971.

In the past, the group has scrutinized Web ads for truthfulness, but has not tackled whether online ads violate people's privacy. But with the new board members, the council hopes to develop self-regulatory standards for marketers that use behavioral targeting, often defined as tracking people as they navigate the Web and serving them ads based on the sites they've visited.

C. Lee Peeler, president of the marketing group, said the council hoped to derail a push for new laws restricting behavioral targeting. "Self-regulatory programs bring the combined wisdom of the industry, and in this case a number of industries, to bear on the issues that have been raised," he said, adding that self-regulation would be more flexible than laws imposed by the government. "If something doesn't work, it can be changed a lot faster than government regulations can be changed."

Founded by the American Association of Advertising Agencies, American Advertising Federation, Association of National Advertisers, and Council of Better Business Bureaus, the National Advertising Review Council sets self-regulatory policies for advertisers.

The board's growth goes along with a broad industry initiative to develop self-regulatory guidelines for online ad targeting. Two weeks ago, the Association of National Advertisers, the American Association of Advertising Agencies, the Interactive Advertising Bureau, and the Direct Marketing Association announced they had formed a coalition to develop behavioral targeting guidelines and lobby against new laws. That initiative is being supported by the Council of Better Business Bureaus.

These ad industry moves come following months of intense scrutiny of online advertising in Washington, including several congressional hearings about whether behavioral targeting violates Web users' privacy.

Much of that activity stemmed from news that behavioral targeting company NebuAd had started working with Internet service providers to serve users ads based on the sites they visited. Privacy advocates were concerned because the platform was potentially more intrusive than older forms of Web targeting, given that ISPs have access to users' entire clickstream data, including all sites visited and search queries. NebuAd said it tracked users anonymously in that it didn't collect users' names or addresses, but advocates noted that individuals have been identified in the past based solely on their search queries.

NebuAd's emergence led influential politicians like Ed Markey (D-Mass.) to reiterate calls for reform. He said that behavioral targeting companies like NebuAd should only collect information and serve ads to users who had opted in to the platform, and that companies using other forms of "anonymous" behavioral targeting should notify users about the practice and let them opt out. NebuAd retreated from its plan last year, shortly after former CEO Bob Dykes resigned.

Last year, in addition to the congressional activity, the Federal Trade Commission continued to consider whether to issue new voluntary guidelines for online marketers. In late 2007, the FTC proposed new self-regulatory guidelines, but has not yet finalized the recommendations. As proposed, the standards generally call for marketers that use behavioral tracking to notify consumers and allow them to opt out.

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  1. Lee Peeler from NARC, January 28, 2009 at 12:58 p.m.

    This article unfortunately scrambles together two separate stories in a way that leaves a misimpression about both.

    Let’s try to set them straight.

    First, the expansion of the NARC Board of Directors

    The Board of Directors of the National Advertising Review Council (NARC) sets policies and procedures for advertising industry self-regulation. The addition of three new members to the NARC Board is an historic move, resulting from an in-depth review of NARC self-regulatory programs, that predates any involvement in behavioral advertising issues.

    The addition of the CEOs of the Electronic Retailing Association (ERA), Interactive Advertising Bureau (IAB) and Direct Marketing Association (DMA), recognizes their longstanding support of self-regulation and the expertise that they bring to addressing the challenges of self-regulation.

    The ERA, for example, is the sponsor of a highly successful NARC program that addresses the truth and accuracy of direct-response retailing advertising claims; the DMA has for years maintained highly regarded self-regulatory programs in the direct-marketing area and the IAB is one of the acknowledged leaders on a wide range issues in the digital marketing revolution.

    The NARC Board, made up of top leaders from the Association of National Advertisers, American Association of Advertising Agencies, American Advertising Federation and Council of Better Business Bureau, has a longstanding history of stewardship of advertising self-regulation. For almost 40 years, NARC programs have promoted the highest standards of truthfulness and accuracy in all forms of advertising and promoted strict standards for truthfulness and appropriateness in advertising to children. The expansion of the Board complements this existing expertise.

    To suggest as the article does that this expansion is driven by the current concerns about behavioral advertising is factually incorrect.

    Second, behavioral advertising.

    As the article notes, the ANA, AAAA, IAB, DMA and CBBB have announced a joint effort to try to develop a cross-sector set of industry guidelines. While the article refers to this as an effort to “derail a push for new laws restricting behavioral targeting,” the actual impetus is the Federal Trade Commission’s call for the industry to develop self-regulatory principles and the belief that a self-regulatory approach has significant advantages to regulation especially in a fast-moving, highly dynamic area like behavioral advertising.

    If issues of behavioral advertising are presented to the NARC Board, the expanded membership will strengthen the ability of the Board to address them, just as it will strengthen the Board’s ability to deal with a host of other issues in the digital marketing area like blogging, viral marketing and advertising on new media like Second Life, just to name a few.

    In sum, the expanded membership is important for many reasons, and is not as the Media Post article states, driven primarily, principally or directly by the separate effort to develop a self-regulatory program in the area of behavioral advertising.

    C. Lee Peeler, President & CEO, National Advertising Review Council
    Executive Vice President, Council of Better Business Bureaus

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