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FTC proposes regulating online targeted ads

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Washington, D.C.—In a blow to advertisers tailoring their messages to viewers based on their online viewing habits, a new Federal Trade Commission report calls for the implementation of a “do not track” option, that would allow Internet users to opt out of all behaviorally targeted advertising.

The FTC, citing fears about the misuse of private consumer data, suggested that a universal opt-out feature, similar to a pop-up blocker, be made part of all Internet browsers. The commission also recommended the creation of a do not track registry, similar to the current National Do Not Call Registry regulating telemarketing.

The recommendations strike at the heart of a self-regulatory program introduced in October by several marketing and advertising organizations, including the American Association of Advertising Agencies, Direct Marketing Association and Interactive Advertising Bureau.

That program allows advertisers to provide information about their behavioral ads as they are served, giving viewers the ability to opt out. The marketing groups are hoping to ward off federal regulation by demonstrating the industry’s ability to regulate its own practices and safeguard consumer privacy.

“I think our job is going to be to make sure Congress knows three things,” Linda Woolley, exec VP-government affairs with the DMA, told BtoB: “First, that users already are darn comfortable using the Internet, and second that they should be careful about killing the golden goose of Internet advertising, especially in this economy.

“And lastly, the phrase ‘do not track’ sounds catchy and analogous to ‘do not call,’ but it’s not at all similar for a zillion reasons,” she said. “It will be our job [to be sure] that policy makers know these things.”

Today, the U.S. House Energy and Commerce Committee is scheduled to hold a hearing on the FTC’s do not track recommendations and other privacy issues. The FTC itself will hear industry and consumer comments through Jan. 31, 2011, before issuing another report.

Congress would have to pass enabling legislation before the FTC would have the power to enforce the do not track recommendations.

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