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NAI Unveils Revision of Behavioral Targeting Code

Posted by Mort Greenberg on April 11, 2008


The Network Advertising Initiative (NAI) unveiled a draft revision of its eight-year-old self-regulatory code today.

The revamped document governs the permissible use of behavioral targeting by the NAI’s ad network members, which include the likes of Yahoo, Google, and AOL/Tacoda. Among other changes, the new guidelines would restrict targeting to some segments and address concerns that the earlier code’s definition of “Online Preference Marketing,” a dated term for behavioral targeting, failed to encapsulate all current uses of the practice.

The revision comes as the Federal Trade Commission works to establish self-regulation rules that apply to all behavioral ad practitioners. Indeed, the NAI yesterday issued its own response to the FTC’s proposed guidelines in conjunction with its member code. The deadline for responses to the FTC’s document is Friday.

The NAI isn’t the only ad industry group to weigh in with the FTC. Yesterday, a group of 12 associations, including the Interactive Advertising Bureau and the U.S. Chamber of Commerce, penned a collective response to the government proposal. Their comments and those of the NAI were similar in substance to earlier remarks by Google and ad agency ZAAZ, covered by ClickZ earlier this week. In short: the FTC guidelines should more clearly define behavioral targeting, and should distinguish between first and third-party advertising.

In a blog post summarizing its concerns, the Association of National Advertisers (ANA), one of the groups behind the letter, said consumers shouldn’t be allowed to opt out of anonymous user data tracking. “What is the potential consumer harm if non-PII (non-personally identifiable information] is transferred to a third party?” wrote Dan Jaffe, ANA executive VP.

But not all groups are so reluctant to accept opt-out mechanisms for non-PII data. In its new industry code, the NAI calls for “centralized access to consumer choice mechanisms” available both on the NAI’s consumer Web site and on the NAI member’s own Web site.

The NAI document also clarifies sections on “sensitive” consumer segments, specifically warning about targeting on traits like ethnicity, age, and pregnancy status. It offers new rules that would require opt-in consent for “restricted” segments and establish a prohibition against creating segments targeting kids under 13. Restricted segments would include those covering certain health conditions, including HIV/AIDS and cancer, as well as on “personal life” information like sexual orientation and crime victim status.

Also noteworthy is the removal of certain terms, most obviously “profile” and “Online Preference Marketing,” from the revamped code.

With the release, Executive Director Trevor Hughes said the NAI has introduced a 45-day public comment period to capture feedback on the proposal. The deadline for industry, advocate, and public responses is June 12.

Regarding the NAI’s comments on the FTC’s principles, Hughes emphasized the group’s broad position that data-driven targeting neither interferes nor invades the consumer experience.

“Marketing is not harm,” he said. “There’s not a harm of intrusion like we had with telemarketing or spam. You’re not getting more ads, but more relevant ads.”

NAI separately announced an expansion of its membership yesterday. Mindset Media, Yahoo-owned BlueLithium, and Media6degrees were granted entry to the organization, bringing the number of members to 15.


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