DAA Takes Self-Regulation Message for Interest-Based Ads to Senate

May 16, 2014

This week, I had the honor of sharing information about our program with the members of the Senate Permanent Subcommittee on Investigations, led by Sens. Carl Levin (D-MI) and John McCain (R-AZ), both in written and oral testimony on behalf of the Digital Advertising Alliance. Our written testimony is posted here.

The focus of the hearing was cybersecurity, malware and its impact on advertising – issues that concern both consumers and the ad business. I was joined on panel with Maneesha Mithal, associate director, division of privacy and identity protection, of the Federal Trade Commission.

Yet – as security and malware was the hearing focus – we truly believe it is necessary to provide the benefits of online advertising as an important context to recognize. While citing recent research from our own study this year, and that from the Data-Driven Marketing Institute, we also said:

“Because of advertising, consumers can access a wealth of online resources at low or no cost. Revenue from online advertising enables e-commerce and subsidizes the cost of content and services that consumers value, such as online newspapers, blogs, social networking sites, mobile applications, email, and phone services. These advertising-supported revenues have transformed daily lives.

“Interest-based advertising is an essential form of online advertising. Interest-based advertising is delivered based on consumer preferences or interests inferred from data about online activities. Consumers are likely to find interest-based advertising more relevant to them, and advertisers are more likely to attract consumers that want their products and services.

“Interest-based advertising is especially vital for small businesses because it is efficient. Smaller advertisers can stretch their marketing budgets to reach consumers who may be interested in their offerings. Smaller website publishers that cannot afford to employ sales personnel to sell their advertising space, and may be less attractive to large brand-name advertising campaigns, can increase their revenue by featuring advertising that is more relevant to their users. In turn, advertising-supported resources help other small businesses to grow. Small businesses can use free or low-cost online tools, such as travel booking, long-distance calling, and networking services, to help them run their companies.”

In the hearing, DAA also sought to educate lawmakers about the online advertising business and how data-driven, interest-based advertising works – and the options for consumers not to receive such ads online. We also wanted to discuss the independent enforcement of all of DAA’s Principles.

In our testimony we wrote,

“Since program launch, there have been more than 30 million unique visitors to the DAA Program Web sites. Over three million unique users have exercised choice using the integrated opt-out mechanism provided at AboutAds.info. Many users visit DAA program Web sites, learn about their choices, and ultimately choose not to opt out. This shows that once consumers understand how online advertising works, many prefer to receive relevant ads over irrelevant ads. Research supports this proposition. A recent poll of U.S. consumers shows that 68 percent of American prefer to get at least some Internet ads directed at their interests and 40 percent of Americans prefer to get all their ads directed to their interests…

“…a key feature of the DAA Self-Regulatory Program is accountability. All of DAA’s Self-Regulatory Principles are backed by the robust enforcement programs administered by the Council of Better Business Bureaus (CBBB) under the policy guidance of the Advertising Self-Regulatory Council (ASRC), and by the [Direct Marketing Association, DMA] under its Guidelines for Ethical Business Practice. In addition to the oversight provided by the CBBB and DMA compliance programs, the [Network Advertising Initiative, NAI] also has a strong compliance program. The NAI’s compliance program, like CBBB and DMA programs, helps members to comply with their self-regulatory obligations, and to hold them accountable…

In the question and answer portion of the hearing, we also confirmed that our program enables “opt out” choices and how consumers can “harden” these choices through our browser plug-ins, Protect My Choices.

Security is a shared desire of advertisers and consumers alike. Everyone can agree that malware and cybersecurity threats have no place in advertising, and we were delighted to see as two DAA participants – Google and Yahoo! – also participating in this hearing.

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