The Debate on Data: The Ad Industry Chimes In.

July 2009

Summary:  With congressional and administrative attention now on the online advertising industry, the industry is responding with “principles” to continue self-regulation.  Whatever the outcome of the debate now underway, TOUs and EULAs will change.  To the business side of digital companies, these are boilerplate:  To the lawyers, they should be seen as what they are–binding agreements with end users and that have serious consequences if they are too one-sided.  You can read the entire report atwww.iab.net/behavioral-advertisingprinciples.

The online advertising industry has responded to the February 2009 FTC Staff Report on the topic (which is called “behavioral advertising”).  That industry created a report on “principles” for managing these data.  These principles represent an attempt to maintain the self-regulation structure now in effect–something that has not made regulators happy (rightly or wrongly).

You can read the report at the URL above.  Here is our take on the principles:

  • Ad Industry Mobilization–the mere fact that disparate industry associations have gotten together is good news, because these people have great experience and expertise to apply to a topic that is really pretty nuanced.
  • No More Fine Print–well, everyone can dream.  It is not so much that the industry will eliminate dense legalese in TOUs, but that the language is supposed to be drafted to be transparent–providing genuine guidance that end users can understand.
  • Actual Innovation–The report includes one innovation:  an “approval” toolbar on browsers.
  • De-identification of data–this is the one we like the most.  Finally, the ad industry is beginning to recognize that the data can be extremely valuable in their aggregate form, without recourse to knowing about the actual individuals.  Pay attention to this one.
  • Sensitivity–This principles recognizes that not all data are created equal and some are more sensitive than others.  Think of medical records.
  • Material Changes–gone will be the days of unilateral retroactive changes to TOUs.  Actually, this is just a recognition that the Federal Trade Commission (FTC) will win on this point and that courts are moving in that direction, as well (See blog on Blockbuster case).

So What?

From a legal perspective, this will add more pressure on companies to change their TOUs, but from a strategic perspective, it is one more piece of the evidence of the growing appreciation–not of the data themselves but of their complexity and vast value.  In other words, it is no longer an either/or debate:  either the industry gets to collect everything or nothing.

Therefore, think about what kinds of data your company wants about use (and not necessarily about each end user).

(See some TOUs, etc., we have drafted: www.npbn.com and www.photospin.com for some examples.)

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