Behavioral Marketing & Self Regulation

In December of 2007, the Federal Trade Commission released staff notes on proposed guidelines for industry self-regulation in the practices of behavioral marketing online. On January 13, several advertising industry organizations formed a consortium effort to work with the FTC in order to begin the process of self regulation.

Behavioral marketing is the practice of collecting data on individual users’ online activities in order to provide targeted advertisements which will better match the individual user’s interests. The internet has already revolutionized the collection and analysis of marketing data which was inaccessible to marketers previously, simply because of the digital trail that users create automatically as they move about the web. How that information is collected and used can create privacy and security concerns within the online realm.

Criticized as reactionary

Critics of the advertising industry accuse the consortium effort of coming together hurriedly to stave off official legislation. Self regulation allows a greater degree of latitude and self-determination for behavioral marketing practitioners, as opposed to any legal mandates which might soon be coming, especially now that the White House administration is proving itself to be quite net-savvy.

Media self-regulation is not unheard of. The Motion Picture Association of America and the National Association of Theater Owners (MPAA & NATO) formed a voluntary, self-regulatory body which first created and then enforced the movie ratings system back in 1968. That move was done in response to social concern over the topics and content which was being shown in motion pictures. The movie rating system is still utilized today, providing a precedent for voluntary self-regulation by media forms.

Privacy over content concerns

In a sign of the changing times, the current social and legal concerns on the internet are more preoccupied globally regarding collection and manipulation of personal data, and the preservation of privacy and security on the web than with any sort of content-based ratings system. While the proliferation of content-filtering services shows that content remains a priority for many, the sheer accessibility of the web as a publishing media seems to make any kind of self-regulation of content nearly impossible to enforce.

Not so with regard to the field of advertising and marketing, industries who have legacy organizations from print-only days that are already well-entrenched in the culture of professional advertising. The organizations which are coming together as part of this new initiative to establish industry guidelines in compliance with the FTC recommendations are the American Association of Advertising Agencies (AAAA), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB). The Council of Better Business Bureaus (BBB) is also part of this effort, a sign that internet-based business continues to occupy a priority position in every industry across the board.

Potential internet experience changes

While this industry effort may seem constrained to the practices of the professional marketers and advertisers online, the truth of the matter is that any of the guidelines which will be developed will potentially change the online experience for all users. While the guidelines proposed by the FTC staff certainly have protection of the public interest at heart, by stepping up to the plate with self-regulation efforts there is still potential latitude for the industry as it seeks to set its own standards. To that end, the FTC has called for open commentary on the proposed guidelines. If you wish to weigh in on the process, be sure to contact the FTC with your own concerns.

The deadline for public comments to be submitted to the FTC has been extended to February 22, 2009.

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