Key Trade Groups Release Comprehensive Privacy Principles for Use And Collection of Behavioral Data in Online Advertising

Top Trade Associations Embrace First-Ever Broad Industry Self Regulation

New York, NY (JULY 2, 2009) - A group of the nation's largest media and marketing trade associations today released self-regulatory principles to protect consumer privacy in ad-supported interactive media. The new principles require advertisers and websites to clearly let consumers know about data collection practices and let them exercise control over that information.

This unprecedented collaboration represents the first time representatives of the entire marketing-media industry have come together to develop principles for the use of data collection in this important area of the economy. It includes the American Association of Advertising Agencies (4A's), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB). The Council of Better Business Bureaus (BBB), a leading organization dedicated to advancing marketplace trust, is also part of the effort. Along with the DMA, the BBB has agreed to enact accountability programs that promote widespread adoption of the seven Principles.

This self-regulatory program is expected to start in early 2010.

"Consumers deserve transparency about the collection and use of their data for behavioral advertising purposes. I am gratified that a group of influential associations - representing a significant portion of the internet community - has responded to so many of the privacy concerns raised by my colleagues and myself," said Commissioner Pamela Jones Harbour, Federal Trade Commission (FTC). "These associations have invested substantial efforts to deliver a draft set of privacy principles that have the potential to dramatically advance the cause of consumer privacy. I commend these organizations for taking this important first step."

"The practice of advertising has clearly been revolutionized by the emergence of the internet," said Nancy Hill, President & CEO, 4A's. "Today, we can match the content of an ad to the interests of the consumer in ways undreamed of just a few short years ago. We can only continue this interest-based advertising if we maintain the public's confidence. The self-regulatory Principles announced today represent a giant step forward in sustaining that."

"Guided by the seven Principles announced today, the advertising community is developing one of the most comprehensive self-regulatory programs ever undertaken by the business community," said Bob Liodice, President and CEO, ANA. "The fast-changing online marketing environment is best addressed by a self-regulatory framework that is transparent, flexible and accountable to consumers' needs and concerns. On behalf of our 360 members, who collectively invest more than $200 billion annually in marketing communications, we look forward to jointly developing a comprehensive business system that respects and honors these Principles."

"The Council of Better Business Bureaus is delighted to join this effort to provide solid guidelines and meaningful oversight of common sense Principles," said Steven Cole, President and CEO, Council of Better Business Bureaus. "We look forward to working closely with the DMA and our other National Advertising Review Council partners to deliver a quality program."

"These Principles are an important step in developing a meaningful self-regulatory framework for companies advertising online and represent the culmination of many months of hard work," said John A. Greco Jr., President and CEO, DMA. "As a respected voice in Washington, D.C., and on behalf of our 3,400 members, we look forward to integrating these Principles into DMA Guidelines."

"This historic collaboration represents businesses and trade associations working together to advance the public interest," said Randall Rothenberg, President and CEO, IAB. "Although consumers have registered few if any complaints about internet privacy, surveys show they are concerned it. We are acting early and aggressively on their concerns, to reinforce their trust in this vital medium."

"The NAI applauds the creation of these Principles and appreciates the opportunity to have been involved in their development," said Charles Curran, Executive Director of the Network Advertising Initiative, which is committed to establishing responsible business and data management practices and standards. "Our members' long-standing experience under the NAI's code shows the effectiveness of self-regulation. Embracing these Principles will only enhance consumer confidence in the online medium."

Taken collectively, the participating associations represent more than 5,000 leading U.S. companies. According to the "Economic Value of the Advertising-Supported Internet Ecosystem," a recent study commissioned by the IAB, the advertising-supported internet represents 2.1 percent of the total U.S. gross domestic product (GDP). It contributes $300 billion to the economy and has created 3.1 million U.S. jobs. The internet has become a vital part of all businesses, and is a lifeline for the hundreds of thousands of small businesses and publishers that have no cost-effective means of reaching so wide an audience.

Development of these Principles was announced in January 2009. They come as a direct response to calls by the FTC to develop more robust and effective self-regulation of online behavioral based advertising practices that foster transparency, knowledge and choice for consumers.

The Principles are designed to address consumer concerns about the use of personal information and interest-based advertising. They also preserve the innovative and robust advertising that supports the vast array of free online content and the ability to deliver relevant advertising.

This self-regulatory program consists of the following seven Principles:

The Education Principle calls for organizations to participate in efforts to educate individuals and businesses about online behavioral advertising.
The Transparency Principle calls for clearer and easily accessible disclosures about data collection and use practices associated with online behavioral advertising.
The Consumer Control Principle requires service providers to obtain the consent of users before engaging in online behavioral advertising, and take steps to de-identify the data used for such purposes.
The Data Security Principle calls for organizations to provide reasonable security for, and limited retention of, data collected and used for online behavioral advertising purposes.
The Material Changes Principle calls on organizations to obtain consent for any material change to their online behavioral advertising data collection.
The Sensitive Data Principle recognizes that data collected from children and used for online behavioral advertising merits heightened protection. It requires parental consent for behavioral advertising to consumers known to be under 13 on child-directed websites. This Principle also provides heightened protections to certain health and financial data when attributable to a specific individual.
The Accountability Principle calls for the development of programs to further advance these Principles, including ones to monitor and report instances of uncorrected non-compliance with these Principles to appropriate government agencies. The CBBB and DMA have been asked and agreed to work cooperatively to establish accountability mechanisms under the Principles.