As the saying goes, why work hard when you can work smart?  Advertisers have adopted this approach by abandoning the one-size-fits-all approach and tailoring ads to specific target audiences.  One obvious example is your inbox:  If you receive emails from companies like Gilt Groupe or Rue La La, it is a safe assumption that you are interested in finding great fashion at discount prices.  Perhaps then you will notice a banner ad for similar sites like Net-A-Porter, or Overstock.com.  That ad was chosen for you based on your previously-expressed interests in similar sites.  Browser tools like cookies that store information on the websites you visit help advertisers form a profile to predict which advertisements would be most relevant to you.  This profile information allows advertisers to more effectively reach their desired audiences, and results in you seeing ads that (should be) interesting and relevant to you.  Such practices are called interest-based advertising, targeted advertising, or online behavioral advertising (OBA).  As defined by the Digital Advertising Alliance, OBA is “the practice of collecting data from a particular computer or device regarding web viewing behaviors over time and across non-Affiliate websites for the purpose of using such data to predict user preferences or interests to deliver advertising to that computer or device based on the preferences or interests inferred from such Web viewing behaviors.”

But with identity theft, hacking and cyber data breaches that are often front-page news, how can consumers be sure that OBA data is collected and used in a responsible manner?  What are the options for consumers who do not wish to have their online activity tracked and compiled for third-party use?  What are the pros and cons of OBA-generated profiles?

The Digital Advertising Alliance (DAA) is an organization dedicated to de-mystifying OBA practices and seeks to establish standards for companies engaging in this type of advertising.  The DAA is a consortium of leading advertising and marketing associations that share a commitment to establish best-practices in OBA, thus increasing consumer confidence in OBA’s use and application (see a list of participating associations here).  Like the National Advertising Division, the DAA is a self-regulatory group that seeks to monitor advertising practices and ensure transparency.  In 2009, they released the Self-Regulator Principles for Online Behavioral Advertising (Principles) which emphasize:

– Education for consumers and businesses about online behavioral advertising and the Principles.

– Transparency about data collection and use practices associated with OBA, providing consumers with clear, meaningful and prominent notice through multiple mechanisms.

– Consumer Control over whether data is collected and used or transferred for OBA purposes, provided through easy-to-use consumer choice mechanisms.

– Appropriate Data Security for, and limited retention of, data collected and used for OBA purposes.

– Obtaining consumer consent before a Material Change is made to an entity’s OBA data collection and use policies unless that change will result in less collection or use of data.

– Limitations of the collection of Sensitive Data collected and used for OBA.

– Accountability for entries collecting and using data for OBA purposes, including mechanisms for enforcement of the Principles.

In further emphasizing the Principles of Consumer Control, Education and Transparency, the DAA has created the Advertising Choice Icon, as part of their Ad Choice Program.  You may have noticed this, a small blue triangle with an “I” in its center, in the corner of a banner, pop-up advertisement, or pages where your browsing data will be used for advertisers.  It is a disclosure technique used by advertisers to indicate that OBA is occurring and showing consumers that the advertiser participates in the DAA Program.  When you roll your mouse over the AdChoice Icon, a clear disclosure statement appears detailing the data collection, explaining how consumers can control the tracking options and how to limit or deactivate data collection.  The AdChoice Icon has a twofold benefit:  consumers become aware of the companies and sites that are tracking them, and understand available options to prevent their privacy.  By disclosing such information, companies and sites increase consumer confidence in their products and services, and hope that this transparency will bolster their bottom lines.  The AdChoice Program boasts a long list of participating companies (see a complete list here) such as advertising agencies, retailers and advertising networks.   Its website – http://www.youradchoices.com/ – lists detailed instructions on how to customize browser settings and educate both companies and consumers on the advantages of OBA.

But don’t mistake the DAA as a regulator in name, not spirit.  Partnered with the Better Business Bureau’s Advertising Self-Regulatory Counsel, there have been several instances where the organizations have requested clarification of a company’s OBA practices to ensure there is no consumer confusion.  Recent examples have been with the brand-new Facebook Exchange platform, where a company with its own advertising data could then reach out to consumers when they log on to Facebook.  It was determined that Facebook could improve the transparency of its practices in this medium by making subtle changes to its ads, like adding the AdChoices Icon and changing some disclosure language (read the whole decision here).  Another example is BlueCava, an advertising company that identified and tracked users across devices and associated (or “householded”) them together.  The Advertising Self-Regulatory Counsel found that BlueCava did not clearly state to consumers that it was tracking their activity across devices, nor did they specify if opt-outs would be honored across devices.  BlueCava responded to this inquiry by synchronizing its opt-out features across devices and amending its disclosures to clarify its practices (read the decision here).

The DAA has also been a vocal advocate of OBA practices in light of the popular do-not-track movement (as I have detailed in a previous post), and with privacy concerns at an all-time high, remains dedicated to providing consumers comprehensive information so they can make educated choices about how to tailor their online experiences.