 |
Nick Stringer
Nick joined the IAB – the UK industry body for digital advertising - as its first head of regulatory affairs in April 2008. He leads the sector, both in the UK and at EU level, in working for the optimal policy environment for digital advertising, in particular on privacy issues, and helping to boost the understanding of digital media and its benefits within regulatory and political circles.
Read the full biography here. |
Rewards for Good Behaviour
Why responsible online ad targeting is essential - the IAB view
6th August, 2010
Advertising is the lifeblood of the digital economy in the UK, EU and globally. It supports much of the content and many of the services sought online by UK consumers such as search, webmail, social networking sites, price comparison sites, productivity suites, blogs, video / photo sharing and the majority of news, information and entertainment sites.
It’s a strong, powerful and essential market for the UK. In 2009, advertising spend online was £3.5bn (IAB / PwC) and £1 in every £4 advertiser pounds is now spent on the medium. In addition, advertising on mobile devices is emerging rapidly. In 2009, advertisers spent £37.6m on mobile (IAB / PwC). Advertising is a key driver for online commerce, now worth £50bn to the UK economy and continuing to grow 14% year on year.
Given the role advertising plays in the digital environment, it is increasingly important that marketing messages are customised. This enables a more valuable business model as well as aiding the internet user’s surfing experience. A growing way of delivering greater customisation online is the use of behavioural or interest-based advertising, when advertisements are served upon previous web browsing activity in order to provide internet users with more relevant and useful market messages. For example, a user’s device is served an advertisement on golf equipment because – over a period of time - the user using that device has visited different golf websites. It really is as simple as that.
The IAB estimates that behavioural or interest-based advertising (including so-called re-marketing) makes up approximately 50% of all online display advertising. This is £350m in terms of advertiser spending in the UK and looks set to increase further in the coming years. There are three key benefits for advertisers, web publishers and internet users:
| |
1. |
Interest-based advertising makes digital advertising more effective, allowing businesses to reach consumers who are more interested in their products and services. This boosts online commerce and aids the consumer’s everyday choices and preferences. This was recognised in the Office of Fair Trading’s recent market study on targeted advertising and prices: it found that “behavioural advertising has the potential to dramatically increase the effectiveness of advertising spend”. Research by the Network Advertising Initiative (NAI) in the US also found that, in 2009, behavioural advertising secured an average of 2.68 times as much revenue per advertisement as non-targeted “run of network” advertising.
|
| |
2. |
The UK Government’s 2009 Digital Britain report concluded that behavioural targeting was an important business model to help web publishers “convert creativity into value”, enabling them to invest in the content and services and make them available to consumers, and help ‘monetise’ areas of their websites that receive less internet traffic.
|
| |
3. |
Interest-based advertising makes marketing more relevant to internet users, providing them with advertising that helps their online experience and aids everyday preferences and choices. Importantly, it provides internet users with fewer advertisements that are of little or no interest to them. Research by the IAB supports this: 50% of internet users would prefer to receive advertisements that are more relevant to the things they are interested in, whilst only 9% would not (IAB / Toluna 2009).
|
Addressing privacy concerns
|
At the IAB we recognise the privacy concerns relating to behavioural or interest based advertising. We believe a balance is needed between the provision of a more relevant and customised digital experience and safeguarding user privacy.
In the UK, we have begun the process by building upon the legislative framework and making the practice of behavioural or interest based advertising more transparent and providing internet users greater control over this experience. Consumer research supports this approach: in November 2009 the IAB, in partnership with legal firm Olswang, found that consumers’ level of comfort significantly increased when greater information is provided, such as what information is actually collected and used and how it can be switched off.
Good Practice in Online Behavioural Advertising
|
In March 2009, the IAB published a set of Good Practice Principles for the UK market, aiming to establish a clear set of rules to govern the collection and use of data – both personal and non-identifiable – to deliver behavioural or interest-based advertising. Participants including the leading providers, such as major advertising networks (eg Google, Yahoo!, Microsoft and AOL) and technology companies (eg Audience Science). A full list of signatory businesses plus a copy of the Principles can be found here
There are three core Principles that businesses are committed to:
a. Clear and unambiguous notice:
|
A business collecting and using online information for behavioural advertising must give clear and unambiguous notice to users that information is being collected for this purpose. This notice will need to include details on what type of information is collected and how the information is used. The Principles offer the option of doing this in a privacy policy or signposted to the privacy policy or a designated web page from a link alongside the advertisement.
A company collecting and using online information for behavioural advertising must provide a mechanism for users to decline or opt out of behavioural advertising. Where personally identifiable information (eg registration data) is obtained, informed consent must be obtained, as is required by strict data protection law. In addition to this, there may be occasions – as required by law or regulatory guidance - where businesses will need to obtain specific consent (eg information collected by a provider at an ISP level) and provide a clear and unavoidable statement to the internet user about the product and ask the user to exercise a choice whether or not to be involved.
The IAB has a dedicated opt out page at www.youronlinechoices.co.uk/opt-out. This is currently an amalgamation of existing opt out links by those businesses that are currently complying with the Good Practice Principles. We are currently building a dedicated opt out ‘tool’ for the site which will offer a more user-friendly ‘one click’ option.
A company collecting and using online information for behavioural advertising must provide users with clear and simple information (such as an educational online video) about their use of information for this purpose and how users can opt-out. The IAB has done this by building a dedicated website for consumers providing further information on behavioural or interest-based advertising, its benefits and how privacy is safeguarded.
The Good Practice Principles have been welcomed and endorsed by the UK Information Commissioner’s Office (ICO). They are specifically referred to in its recent code of practice on personal information online, and also by Ofcom and the UK Government (e.g. the Digital Britain report). The Office of Fair Trading also supported them in its recent market study on targeted advertising and pricing.
Developing good practice in this area is the first step in our work and the IAB is committed to keeping this under review as commercial practices evolve and as technology changes. A Framework for all EU markets is being developed, involving an unprecedented level of co-operation amongst all sides of the advertising industry, including advertisers, agencies and web publishers, with a view to enhancing transparency and user control. This will evolve the UK self-regulatory good practice and align it with other initiatives, such as those in the USA.
The industry faces a serious regulatory risk from EU policy-makers who seek to impose mandatory restrictions whilst failing to understand the technology and its importance to the wider EU economy. It is industry’s job to ensure that policy-makers understand that it is self-regulation – and not overly restrictive regulation – that will best meet the balance needed to empower internet users whilst safeguarding privacy.
Nick Stringer
Comments on this article
Want to share your thoughts...?
NOTE: Please note that this board is moderated, and comments are published at the discretion of the site owner.
|
Back to 