Attacking Self-Regulation Agents Is Counter-Productive

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argue_smallADOTAS – The U.S. Federal Trade Commission (FTC) has demanded far more transparency when it comes to online behavioral (or interest-based) advertising. So the interactive industry is heeding that call and putting a great amount of focus on consumer privacy. Online advertisers have more options than ever when it comes to meeting industry guidelines, thanks to a crop of companies including mine — Evidon — that provide compliance technology and services.

But, even as the compliance sector grows, Technorati Senior Vice President Scott Spaulding recently argued on Adotas that making a profit off this service damages the ad industry. The heart of his argument is that a nonprofit advocacy group should oversee privacy compliance services because the current companies aren’t looking out for a marketer’s best interests. This viewpoint is sadly misguided and entirely off base.

Some argue that marketers don’t want to pay extra to include the “Forward I” icon and links to privacy resources within their ad units, going so far as to cite inaccurate and inflated CPMs. The numbers referenced by Spaulding are so high that even his low end is orders of magnitude higher than the actual going rate for services that include the ad choices icon.

Yes, other compliance services can increase that cost, albeit modestly, and to a level nowhere near what he cites. At its most basic element, compliance is not expensive.  And, it’s as much an investment in the future of our industry as anything else.

It’s also important to understand the history, which Mr. Spaulding missed.  Going back to 2009, the coalition of trade associations that became the DAA (the IAB, ANA, DMA, 4A’s, AAF) with the support of the Council of Better Business Bureaus and the Network Advertising Initiative, decided for-profit companies should manage the compliance technology.

That’s long before anyone in our industry knew what was coming. Leaving the technology platform in the hands of one non-profit association, such as the Interactive Advertising Bureau (IAB) or the Network Advertising Initiative (NAI), would imply levying a tax on the industry, and tasking one of our trade associations with a burden well beyond its charter. No one wants that.

In fact, neither one of those organizations, nor any other in our industry, is prepared to handle this mission. The IAB is mostly sellers, not buyers. Were the IAB to manage compliance, there would be even less of a marketer’s perspective. The NAI, meanwhile, has built a completely different kind of business over the years, one that relies more on legal efforts rather than technological ones.

Of course, the glaring omission from any argument against compliance platforms is that no marketer is required to pay a third-party whatsoever!  Any marketer, advertiser or publisher can build their own compliance platform, and some are indeed choosing to do that.

But many others are paying for the services of compliance providers because they see the value in what these companies do and these services extend well beyond getting the basic advertising option icon into an ad on a website. There’s a clear benefit in building easy-to-use tools that consumers can use to get more information and opt out.  Being sure that your company is compliant, and having the data to back it up is always more cost efficient than not being ready when it hits the fan right?

All of this aside, Spaulding is clearly in the minority of companies who are missing the big picture. This kind of petulant infighting and muckraking plays right into the hands of the anti-advertising advocates who think that our industry can’t self-regulate.

The goal of this entire initiative – the “I” icon, greater transparency and improved consumer controls – is to keep the industry functioning and growing as it is right now. It’s in everyone’s best interest to present a unified front and be as accurate as possible when discussing the options for self-regulation.

The companies that publicly carry the flag for industry self-regulation are the greatest chance the industry has for avoiding federal regulation. Attacking them is counter-productive, and public mudslinging leaves everyone looking dirty.

If the interactive industry is to continue growing, it needs partners committed to a single goal. If you want to reap the benefits of this blossoming industry, get on board. It’s only through recruitment that our industry can actually achieve the self-regulation it needs.  Whether it’s paying a third-party solution or developing an in-house one, every marketer on the web needs to be on board.  The IAB just announced this week that its members have six months to get with the program.

Only through this emphasis on spreading the message can we truly keep federal regulators and the press from restraining our industry’s growth and providing better, more relevant ads to consumers. As previously stated, competition within the regulatory compliance space is only a good thing. More companies will mean more options for advertisers and publishers, making it easier to get in line with compliance.

At the same time, it also provides a clear message to both the government and consumers: namely, that we, as an industry, are doing what they have made clear we are required to do.  Or else.

1 COMMENT

  1. Colin-I appreciate the need to defend your company and frankly if I was in your position I would most likely write a similar piece. Let’s start with getting the facts out there. If you disclose your full rate card, all of this negative PR your company is receiving from taking advantage of the industry’s mandate for self-regulation could be cleared up if what you say above is true regarding rates. If your CPM’s are $.01 (or less) for every program Evidon runs for advertisers, I will fully retract my piece.

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