Privacy Options Come to Online Video Ads

Tremor Video to Offer 'Opt-out' Icon in September

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Prompted by government inquiries, the ad industry has, in fits and starts, given people more control over their privacy via its "ad choices" icon that appears on banner ads across the open web. Now, the industry will offer privacy on video ads.

Beginning this September, online video ad network Tremor Video will feature the privacy icon on virtually all of the ads that appear on its network, mostly 15- and 30-second commercial spots common to TV. Tremor is the largest video ad network, serving more than 700 million ads to more than 20% of the internet audience in May, according to ComScore.

"It's the first time the icon is appearing on in-stream video ads," Jason Krebs, Tremor's chief media officer, said. "We take privacy very seriously, and we want consumers to feel comfortable with the ads they see."

The icon links to a landing page that shows the user which advertisers and technology companies are tracking them with options to select which ones can and cannot continue to do so. Advertisers that have appeared on Tremor's network include Procter & Gamble, Paramount Pictures and Nissan with ad rates running anywhere from $10 for every thousand views to $60, according to the company.

Video advertising has emerged as an important battleground in digital media as publishers look to capture more marketing dollars from mighty TV, which still commands the biggest slice of major media market at 38% compared to the internet's 17%, according to ZenithOptimedia.

At the same time, the ad industry has been under the government gun recently as the Federal Trade Commission has more aggressively pursued companies that violate consumer privacy. The agency has expressed concern that internet companies are not offering people a clear and easy mechanism to prevent advertisers from collecting information about their online habits. Advertisers say they can better serve consumers by showing ads that may be more relevant to their needs and interests.

In an effort to stem legislation, the ad industry created a coalition, the Digital Advertising Alliance, to start a privacy program, which recently gained wider adoption among more advertisers.

The FTC said it will soon evaluate the effectiveness of the industry program based on how widely it has proliferated across the internet and how well consumers understand the options.

For the moment, Tremor is the only video ad network offering privacy controls over video advertising. The New York-based startup acquired video network Scanscout last year for $65 million and its backers don't rule out the possibility of further acquisitions in an effort to consolidate the online video ad market, which doesn't yet have enough scale to compete with television, the long-running goal of internet media.

Tremor -- which is capitalized at $105 million with funding from Canaan Partners, Draper Fisher Jurvetson, Triangle Peak Partners, SAP Ventures, European Founders Fund and others -- could be the target of an acquisition as well, given its reach within the still-growing video ad market. Google, which has been trying to bring in more ad dollars into its YouTube property, reaches only 13% of the internet audience and served 155 million ads in May, compared to Tremor's 700 million ads.

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