Maintaining the Momentum and Credibility of OBA Compliance and Self-Regulation

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ADOTAS – The most pressing compliance issue facing the online advertising industry today is ad privacy — how to communicate targeting practices to consumers and offer opt-out choices, thereby increasing ad relevancy and benefiting consumers, advertisers and publishers.

It has been about a year since an industry coalition, consisting of the IAB, CBBB, ANA, 4A’s, NAI, and DMA, launched the Digital Advertising Alliance (DAA) and its self-regulatory program for online behavioral advertising (OBA). The program’s goals were twofold — increase transparency and choice around OBA and protect innovation against potentially damaging Congressional legislation or Federal Trade Commission regulation.

Since the DAA’s launch, hundreds of advertisers and ad platforms have joined the program; trillions of notices/icons have been served; and much of the proposed legislation in Congress now advocates self-regulation’s notice and opt-out choice model, as opposed to the European opt-in directive.

TRUSTe jumped headfirst into this effort, working with the DAA as an OBA compliance vendor from the very start. TRUSTe invested in a massive serving infrastructure, and today we serve billions of icons per month with the largest footprint of any third-party OBA compliance provider.

While the DAA’s self-regulatory program has demonstrated that it can positively influence the legislative debate, the dangers of disruptive legislation and regulation still exist. As an industry, we must put the pieces in place for a sustainable compliance model – one that can maintain value for the industry over the long haul – even as circumstances evolve. A long-term, credible OBA compliance model benefits the industry and protects consumers, and an understanding of the following three tenets are critical to get us there.

Unique Implications for the Ad Industry

First and foremost, compliance is a must-have item. It is not an option but a requirement for anyone in the digital ad ecosystem. Compliance is a necessity just to be on the ad playing field.

Second, compliance has a network effect. The more that participate, the stronger it becomes. Conversely, one rogue player — or a limited subset — can also weaken the compliance program, bringing negative media attention and regulatory scrutiny to the entire model. Subsequently, when implementing, selling, buying, developing or participating in a compliance model such as OBA self regulation, it is critical that all the players adhere to the highest standards of openness and accuracy, avoiding the temptation of using fear and exaggerated claims to compel compliance adoption.

Without such high standards, the long-term value and credibility of OBA self-regulation is reduced for the entire industry.

An Open Compliance Model Is the Most Sustainable

A successful compliance program requires a common set of conceptual principles to be adhered to by the participants. At the same time, a successful compliance program must be flexible and open, enabling alternative ways for participants to meet the principles. This open model enables businesses to work within their own particular constraints, fosters innovation, and allows for changes to address evolving technology, business, government and consumer concerns.

In its Aug. 15, 2011, letter to the Council of the Better Business Bureaus (the enforcement arm of the DAA), the FTC underscores that compliance systems such as the DAA program should not “crowd out” other approaches providing consumer transparency and choice. In other words, there can be many roads to the same compliance destination.

Open compliance ensures the long-term credibility of OBA self-regulation. Because no one party owns them, the conceptual principles are less likely to be replaced by agendas driven by specific technologies, vendors or private entities.

Compliance ‘Monopolies’ Are Counterproductive

In the fast-changing worlds of digital advertising and consumer privacy, constant innovation is a prerequisite to a successful and sustainable compliance system. Exclusive or monopolistic compliance control over the ad ecosystem stifles innovation and can lead to a situation where there is a single judge, jury and executioner for OBA compliance.

One party would control what constitutes compliance, oversee enforcement actions, and also provide compliance solutions. This one party would have all the power necessary to exact any term, any price and any technology over the entire industry. This would almost certainly lead to less innovation, not to mention higher costs for participating companies.

The remedy for this monopolistic danger is again dogged support for an open compliance model.

In just one year, the online advertising industry established a broad self-regulatory program for OBA that turned the tide against potentially harmful regulation and legislation. We need to maintain that momentum and build an enduring open compliance model that protects the industry for the future. TRUSTe’s decade-plus journey through compliance and privacy has taught us that these three tenets are essential for the long-term viability of OBA compliance and self-regulation.

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