British IAB codifies behavioural advertising

British IAB codifies behavioural advertising

The economic slowdown makes it imperative for operators to boost their ad revenue, while consumers are more urgently seeking reassurance that their personal details won't be distributed to all and sundry and they won't be bombarded by adverts.

The IAB's "good behaviour" announcement follows a number of significant recent developments in online advertising:

  • British mobile operators have disclosed that they will sell consenting customer's behavioural data to advertisers.
  • Research company Forrester reports that 26% of European online advertisers used behavioural-based advertising systems in 2008.
  • The online market in the UK could generate £200 million for advertisers, according to the IAB.
  • Online advertising Phorm is rolling out its Webwise behavioural data service as a user opt-in through service provider BT, even while the European Commission is investigating complaints that BT gave Phorm a trail run without the consent of customers.
  • Privacy groups are edgy about the confidentiality of the collected data, critical of the opt-in option for users and worried that the IAB code may not be binding on all.
  • Technology from the likes of Motorola will offer increasingly slick ways to target ads at mobile users.

Ten online companies, including the biggies like Google, Yahoo!, Microsoft, AOL and Phorm, have already signed up for the IAB's code of conduct. By doing so they have undertaken to apply three vital elements – notice, consent and education – before they collect any data based on user searches for websites or information.

  • The code requires them to notify the consumer that behavioural data is being collected.
  • The consumer must be given the option to decline behavioural advertising.
  • The company must publish clear and simple information about its data collection policy – most probably as an explicit inclusion in its privacy policy.

Both pre-emptively and in reaction to consumer group complaints, the IAB is at pains to emphasise that advertisers will not be able to identify individual consumers. Nate Elliott, a principal researcher at Forrester, says: "There is no personally identifiable information. They don't have your name, address or phone number. Instead search terms are linked to a random cookie number in a general geographic area."

He points out that search engines like Google have been using a form of behavioural advertising for years. That column of ads that appears down the side of a Google results page is linked to the search terms

Even so, privacy advocates are grumbling about behavioural data collection for at least three main reasons. They point to the general principle of service providers recording their customer's' online behaviour, and they specifically criticise the perceived inconvenience of having to opt out of receiving targeted ads. In addition they worry that the IAB's new code isn't be binding on all of the IAB members.

  • On data collection: "The bottom line is that if I'm prepared to tell advertisers where I browse and what adverts I want then all well and good, but I don't want them snooping on me," says privacy campaigner Richard Clayton.

Nick Stringer, head of regulatory affairs at the IAB, responds: "The IAB has gone to great lengths to ensure that the industry protects and educates consumers on their rights and choices."

  • On opting in or out: The nuisance factor is the concern here for people who want to opt out. Behavioural advertising seeks out users by identifying an opt-in cookie and the device's IP number. If you use more than one device you have to opt out (or in, if you want the ads) on each one. This however may be no more inconvenient than having to log in at Facebook if you use a friend's computer or mobile.
  • On tying IAB members to the code: There has been criticism that members are not obliged to sign up. This is true enough; the IAB itself states: "These principles are self-regulatory in nature," a guide – not a prescription – on how members should interact with their customers in the matter of behavioural advertising. However, the IAB will also require members who do sign the code to make it very clear to users that the company does adhere to the code.

Meanwhile things are moving quickly in the realm of behavioural advertising technology. Motorola, for example, is working on mobile phone software which will search for words in text messages and generate appropriate ads. Send an SMS to a friend saying you're hungry, and up may pop an advert for a nearby restaurant.

"We have a technology which allows us to search, to understand not only where the person might be but also what their interest might be," says Kenneth Kellar, Motorola's chief marketing officer.

He adds that similar voice-recognition software for mobile phones could be developed.

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