Don’t Track On Me: The FTC’s “Do Not Track” Initiative Has Advertisers Looking to Right the Ship Themselves

December 20th, 2010

Whether you know it or not, just about everything you do on the web is tracked, databased, and sold to the highest bidder. Every site you visit, the items in your shopping carts, your social media preferences; all bits of data that advertising companies purchase and use to send you customized advertising (among other things). These are just a few examples of the different types of data that advertisers have access to that you may not be aware of.

On December 1 the Federal Trade Commission (FTC) issued a proposal that aims to balance the privacy concerns of consumers with the needs for advertisers to know something about their target audiences.

The commission’s “Do Not Track” initiative lists five recommendations from the FTC report, namely:

1. Privacy by Design. In other words, there should be a reasonable limit to the information a company can collect about a person for commercial and personal purposes. This information should have a limited collection and retention span, and not be kept indefinitely.

2. Customers should have the option of not sharing any data at all. The report suggests the implementation of a “Do Not Track “ mechanism so consumers can choose whether they want their data collected at all. The FTC suggests a possible optional setting on all browsers to accomplish this.

3. Companies should not have to gain acceptance for such commonly accepted practices as legal compliance, product and service fulfillment, first party marketing and protection from fraud.

4. Full transparency of data collection practices between companies and consumers.

5. Increased consumer education programs that explain to the public what advertisers are looking for and why.

The FTC says the proposal “lays a foundation for industry innovation – while protecting consumers and their privacy.”
The initiative was necessary, the FTC says, because, advertising companies have not done enough to protect online users from surrendering information they had no intention of revealing to anyone.

The seven-page report cited a complaint and settlement that was the back-breaker for the FTC to step in:

“The FTC charged that EchoMetrix sold so-called “Sentry” software to enable parents to monitor their children online, but it failed to adequately disclose that it also sold information about the kids’ online activities to third-party marketers. The only –only – potential hint to parents was a vague statement buried 30 paragraphs down in the Sentry end user license agreement.”

Which is not to say that some organizations haven’t been trying to help companies self-govern their information sharing activities. The National Advertising Initiative (NAI) consists of advertising networks, data exchanges and analytics service providers who are developing educational and opt-out mechanisms for the public.

Their principles, a set of self-regulatory measures that must be adhered to by members, include:

- Informing users that advertisers may place “cookies” on their computer, to track that you visited before;

- This cookie may be used to tailor the ad content you see when you return to the site or related sites;

- All advertisers must give you, the consumer, the right to opt out of providing any information at all when you are online.

While these initiatives seem noble, and they certainly are needed, they could very well change, and limit, how companies advertise on the web.

The proposal is not without its detractors and naysayers. Many feel that “Do Not Track” could prohibit companies from offering customized services online. What’s more certain types of ad campaigns now considered par for the course would be impossible to execute without enough information about the target market.

While this fear is understandable, the FTC proposal doesn’t prohibit tracking of consumers who want to be tracked. If you want a customized service from a vendor, you will have to provide them with information they need to provide the services you want.

If anything, the FTC initiative appears to be a “kick in the rear” to the advertising business to do something about privacy before the government has to come in and do it instead.


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