Posted July 2, 2009 10:07 am by with 3 comments

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GovernmentAn important element (read: selling point) of Internet marketing is the ability to know more about consumers and their behaviors. Everything can be tracked on the Internet, for the most part, and there is obvious value to marketers and their efforts. The flip side of this ability to track people is the privacy issue and lately the US government has been raising it’s regulatory eyebrows at the online world. In the past this may not have been such big news but with the current administration’s bend toward a ‘name it and claim it’ government style, web advertisers are looking to self police before they draw any more attention from the feds.

Yahoo Tech reports on the efforts of a group of advertising associations that have come together to build a set of rules and regulations that the industry can use to give the consumer the privacy they expect and let marketers keep the freedoms that government intervention would likely hinder.

The centerpiece of these guidelines are the provision of transparency in tracking practices and easier opt-out for consumers. While it is certainly a big question as to how well these guidelines will actually work the hope is that the industry will be less of a focus of the FTC (Federal Trade Commission) and Congress.

These guidelines are coming from trade associations that represent 5,000 companies. The consortium comprises the American Association of Advertising Agencies, Association of National Advertisers, Direct Marketing Association, the Interactive Advertising Bureau and the Better Business Bureau. Their members are some of the nation’s largest companies, including Google Inc., General Electric Co., Microsoft Corp., Coca-Cola Co. and Procter & Gamble Co.

These guidelines include recommendations that companies

  1. Tell consumers more clearly when they’re being tracked
  2. Educate consumers on how Web tracking works
  3. Give consumers an easy way to opt out of being followed
  4. Provide “reasonable” security for the data they collect
  5. Limit how much data they retain
  6. Get consumer approval before making material changes that would erode privacy protections with specific areas such as children’s personal information, financial data and medical records getting more protection.

Anyone caught by this new group will be reported to the federal government. This plan should go into effect in 2010. Sounds reasonable enough but of course there are those who feel that this will not be enough.

Jeff Chester, executive director of the Center for Digital Democracy, said the online ad industry’s promise to regulate itself through the new guidelines is designed to undercut the federal government’s increased interest in overseeing online behavioral advertising.

He fears that the guidelines don’t go far enough and that there needs to be fair rules passed by Congress that ‘online marketing can thrive but consumers have greater control on how the information collected is being used.’

I am sure that the views of Pilgrim readers regarding government intervention in business are all over the map so we’ll ask you the question: Should the industry police itself or should the federal government be involved? What are the pros and cons of both options? Here’s your chance to form your own policy for people to see and show off your position on government’s role in business. Sounds like a fun and light topic to consider while enjoying the holiday weekend, right?

  • Ah yes – industry self regulation. Coming from an industry where the fact is the more they know the more they think they can profit.

    Well the truth is they come from the same cloth as the financial industry. Hmmmm I wonder how government non-interference turned out in THAT one…

    Chambers of Commerce and even City councils have one goal – to bring more business into an area and to promote business interests. That’s why there’s insane traffic congestion in every little city in America. It may not seem related but again, it’s what happens when an entity with self-serving financial interest is left unchecked.

    Free market enterprise without stringent oversight is the most fantasy based concept in existence.

    The bigger problem though is that the Federal government at the highest level is also just as polluted in motives because lobbyists and big corporate political contributions carry more weight than the majority of people those big business interests want to tap.

    God bless America.

    Alan Bleiweiss’s last blog post..My Search Engine Journal Debut

  • Shepherd

    The self-regulation of industry has proven to not only be extremely effective but also to act, in many ways, in the better interest of affected parties.
    If the advertising industry is trying to resist government intervention, then perhaps they will create their own innovative solutions to problems rather than having a government organization create a ruling which could potentially damage the industry. This method allows advertisers the ability to create regulations and policies that are both effective and, possibly, healthier for business.
    Also, from the standpoint of the industry, this action of self-regulation gives them far greater power in the making of the regulations–They will have the greatest amount of say in the creation of the actual policies. Not to mention that, had they been regulated by the government, the policy would seem like something of a reprimand. But if they make they’re own policies, then it’s more like they’re making concessions out of the “goodness of their hearts” and, in truth, are likely to be able to get away with dealing with some issues less harshly than they would be, had the policy been created by a government agency.
    Another important point in the argument for self-regulation is that, so far as anyone cares, self-regulated laws are, by and large, followed with far greater discipline. If the government makes a bunch of policies that act as a detriment to the industry, then everyone is going to wheedle their way around them and find sneaky ways to circumvent them. But, as is fairly common knowledge, if they make the rules, they are far more likely to follow them. Especially if their more likely to be judged by “brothers” in the industry, if they act too maliciously against the policies.
    The final point is this–Who cares if they self regulate? Especially in this example! If they fail to regulate appropriately, then the government WILL step in and the industry will get a swift kick to the hind-quarters. So why not save the time, money, and frustration and just let them do it themselves. If they fail to dissuade the government’s watchful eye, then they’ll get what’s coming anyways.
    For the above reasons, though, no one in the industry should want governmental interference and, therefore, we should expect the policies that they create to be strong, good for business, good for the consumer, and, most importantly, strictly self-enforced.
    It’s worked in other media industries. Why not this one?

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