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Edith Ramirez, the new chairperson of the Federal Trade Commission (FTC), said that self-regulation can be “an important tool for consumer protection that can respond more quickly and efficiently than government regulation.”  For the advertising industry, that is certainly the case.  When advertising self-regulation was created in 1971, there were plenty of skeptics.  But today, the Advertising Self-Regulatory Council (ASRC) – which establishes the policies and procedures for advertising industry self-regulation, including the National Advertising Division (NAD), Children’s Advertising Review Unit (CARU), National Advertising Review Board (NARB), and Electronic Retailing Self-Regulation Program (ERSP) – remains critical for the industry, providing guidance on new developments and technologies, and implementing real monitoring and enforcement to preserve consumer protection standards.  This fall’s NAD Annual Conference, held in conjunction with both the CARU Annual Conference and ERSP Summit, focused on legal trends and new developments, including digital and mobile trends that are impacting self-regulation.

The Way I See It

  • I see industry self-regulation playing an extremely important role for advertisers and marketers, particularly in defining standards and encouraging transparency when it comes to critical issues including behavioral advertising, app privacy, and advertising to children.
  • In the digital age, with constantly-evolving opportunities for advertisers with new technologies and new media, self-regulation – unlike the government – is able to keep up with the swift pace of change to provide guidance, set benchmarks, and monitor for issues.
  • I see an important moment for self-regulation as it continues to develop and enforce industry best practices and standards for consumer privacy and data protection, especially through the development of apps, new smartphone and tablet capabilities, and new social networks.

The Way The Industry Sees It

I sat down with C. Lee Peeler, President and CEO of the ASRC and Executive Vice President, National Advertising, Council of Better Business Bureaus (CBBB) to discuss industry self-regulation, consumer protection, and this year’s NAD Annual Conference.  Prior to joining the ASRC, he had a 33-year career at the FTC, where he served as Associate Director of the Division of Advertising Practices and Deputy Director, Bureau of Consumer Protection.

This fall’s NAD Annual Conference focused largely on self-regulation, government enforcement, and legal issues surrounding emerging social media and digital marketing.  How critical do you think this is for the industry and how is self-regulation monitoring and addressing it?

The advertising industry has established an extraordinary record of delivering real self-regulatory programs that address the needs of both ethical competitors and consumers.  The NAD’s Annual Conference is the place where the advertising industry can both look back at what it has accomplished and look forward to the challenges facing it. And, like the advertising industry itself, the challenge for self-regulation is going digital. That’s why our first panel was “3-inch screens and 140 characters.” We were so delighted to have representatives from Foursquare, Evidon, General Electric, and LG Electronics, as well as law professor Eric Goldman, Director of the Santa Clara University School of Law High Tech Law Institute. The advertising industry has a real opportunity in the digital space to demonstrate exactly the type of leadership and commitment to high standards and impartial oversight that it has in more traditional media.

In 2012, ASRC units resolved more than 175 cases.  What have been the most prevalent issues and challenges facing the industry over the past year?

One of the great things about self-regulation is the range of issues and products it deals with.  NAD in the past year has handled cases for products as diverse as telecommunications, infant nutrition, over-the-counter medications and dietary supplements, and “green” products.  ERSP’s casework has included the review of claims for work-at-home programs, affiliate marketing companies, and dietary supplements. Our Interest Based Accountability Program released its first compliance guidance to the industry and a decision on certain Facebook exchange privacy practices.  Child-directed marketing in any form is always a flash point and it receives careful and continuous scrutiny by CARU.  Priorities in child-directed advertising include anything having to do with child-directed mobile apps or COPPA compliance. For the adult-focused programs,  the implementation of basic privacy protections for mobile devices, health-related claims, and practices in new media that blur the line between advertising and editorial content are among our priorities.

Continue Reading Understanding Industry Self-Regulation: A Conversation with C. Lee Peeler

Spamming has taken a new form in this era of mobile phones and text messaging.  In addition to fighting the clutter in our e-mail inboxes, we are also faced with clutter on our cell phones.  In the words of the FTC, text message spam is a “triple threat.”  First, mobile spam often uses the promise of free gifts or product offers to get you to reveal personal information such as bank account, credit card, or Social Security information.  Alternatively, clicking on a link in a text message can lead to the installation of malware that collects information on your phone and sends it to a third party.  Second, the spam can lead to unwanted charges on your cell phone bill. Third, these unsolicited messages can slow your cell phone’s performance.

With few exceptions, it is illegal to send unsolicited commercial e-mail messages to wireless devices, unless the sender gets your permission first.  The FTC has taken an active interest in preventing this spamming from continuing.  In March 2013, the FTC filed eight different complaints in courts around the United States charging twenty-nine defendants with collectively sending more than 180 million unwanted text messages to consumers, many of whom had to pay for receiving the texts.  The messages promised consumers free gifts or prizes, including gift cards worth $1,000 to major retailers such as Best Buy, Walmart, and Target, in exchange for providing sensitive personal information, applying for credit, or paying to subscribe to services.  The text message spamming network involved the individuals sending the spam, who got paid by website operators based on how many consumers entered information on each website, and website operators, who were paid by businesses that gained customers through the process.

In July 2013, the FTC continued its campaign against these spammers by filing another complaint in the U.S. District Court for the Northern District of Illinois naming another set of defendants in this network.  Cell phone companies as well as major big box retailers, fearing that this practice tarnishes their brands, have also warned their customers and provided avenues through which to lodge complaints.

 The Way I See It

  • I see that, while text message spamming was inevitable, it, unlike e-mail spamming, may have an end in sight since there are direct costs to the consumer from simply viewing the message, there are direct effects on cell phone service, and there are many ways for consumers to prevent this spamming from occurring (i.e., putting one’s number on the National Do Not Call Registry or submitting a complaint to a cell phone company, retailer, or the FTC).

    • Continue Reading “Canning the Spam” – The FTC on Mobile Spamming

The Federal Trade Commission (FTC) recently released updated Dot Com Disclosure guidelines to fast forward to the present day and catch up with the technology consumers use more and more frequently – including smartphones, tablets, and social media. I previously gave you an overview of what the updated guidance means and how marketers need to approach the new FTC standards, and you’ve read “The Way I See It” on the updated guidelines.

I wanted to turn to an industry expert to discuss what the new FTC Dot Com Disclosure guidelines mean for advertising on various key platforms and what could be next for mobile and tech.

The Way the Industry Sees It:

I sat down with Jerry Karnick, Vice President and Deputy General Counsel at Verizon Wireless, to get his thoughts.

 We all seem to agree that the updated guidance was a necessity, but do you think the Dot Com Disclosures will help grow advertising potential on mobile and online platforms?

I do. Advertising through online and mobile platforms is here to stay, and the new Dot Com Disclosures recognize and embrace that reality. Of equal importance, the new Dot Com Disclosures also provide advertisers with added clarity on what is required, while continuing to allow advertisers the necessary flexibility to meet those obligations. With the guidance provided by the new Dot Com Disclosures, more and more reputable advertisers will have increased comfort advertising on these platforms, especially on the small screens available in the mobile arena. At the same time those advertisers won’t have to worry that their ads, which include the disclosures necessary to ensure the ad is neither false or misleading, will be less appealing than the ads of other online or mobile advertisers that may not have otherwise included the necessary disclosures, either at all or in proximity to the main advertising message.

With smartphones and tablets, the majority of issues presented by the old Dot Com Disclosures were how to present disclosures in the new space constraints. For the mobile industry, does the new guidance meet these concerns and are there any significant new issues that are raised?

The new Dot Com Disclosures provide the necessary clarity about whether and how the traditional advertising rules will apply in the mobile space. What they don’t do – nor, of course, could they – is increase the size of the screen. The industry will continue to wrestle with space constraints. But, now that there is clarity on what is required, it will be up to all of us to find new and creative ways to design ads in ways to ensure the necessary information is communicated effectively and the overall message conveyed to consumers is not misleading.

Continue Reading A Conversation With Verizon’s Jerry Karnick On The FTC’s Updated Dot Com Disclosure Guidelines

I talk here on Madison Ave Insights all of the time about the importance of mobile and social media for advertisers.  Technology is always changing, and with new technology comes a set of new challenges for industry groups, brands, and regulators.  In light of the rise of smartphones, tablets, and social media, the Federal Trade Commission (FTC) updated its online advertising disclosure guidelines.  Known as the Dot Com Disclosures, the guidance updates the original guidelines which were introduced in 2000, since, as we all know, a lot has changed since the turn of the Millennium.  While the general principles of traditional advertising law apply equally to online and mobile media, the updated guidelines provide specific guidance for making “clear and conspicuous disclosures” on mobile and social media platforms.

The FTC’s updated Dot Com Disclosures signal to marketers that traditional consumer protection laws apply to mobile marketing, regardless of space limitations.  While there is no set formula for a clear and conspicuous disclosure, when evaluating whether a disclosure meets this requirement, an advertiser should consider its placement in the ad and its proximity to the relevant claim.  Due to the smaller screen size and different format of mobile platforms, the FTC changed its definition of “proximity” from “near and, when possible, in the same screen” (from the 2000 version) to now be “as close as possible” to the relevant claim.

Mobile marketers may need to become creative if they want to continue to use hyperlinks, as hyperlinks need to be obvious and labeled to explain the nature and importance of the information to which they link – terms like “disclaimer,” “more information,” “details,” or “terms and conditions” may no longer be adequate.  The FTC also makes clear that the disclosures that are necessary to comply with the FTC Endorsement Guides need to be disclosed in space-constrained ads such as Tweets and cannot be disclaimed via a click-through or hyperlinked disclosure, but need to say something like “#Ad” in the Tweet.

The Way I See It

  • Mobile marketers should look at the FTC’s new guidance in a positive light.  For too long, we have been applying the FTC’s decade-old Dot Com Disclosures guidance to mobile media, which raised unique challenges given mobile’s space limitations.  With the flexible principles and specific examples presented in the updated guidance, mobile marketers now have the necessary tools to provide disclosures that meet FTC requirements.
  • I see the FTC making clear that if a platform does not allow marketers to make clear disclosures, that platform should not be used for advertising and this should be taken seriously in order to meet FTC standards and avoid any enforcement actions or false advertising litigation down the road.

Surrounding a breakfast seminar, which was held at Davis & Gilbert today entitled, “Complying with the FTC’s Final Amendments to its COPPA Rule: What You Need to Know,” I thought a great post would be to examine that very topic.  In addition, I had the chance to speak to Wayne Keeley Director of the Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus and interview him as my Q&A guest this week.

Advertising to children has long been laden with complex issues.  Advertising promoting products that target children have long faced criticism from consumer advocates and regulators who raise safety, health, or inappropriate content concerns.  In the digital age filled with online privacy and data collection concerns at every corner and constantly evolving technologies that put individuals – especially children – at risk, the Federal Trade Commission has increased its regulation and enforcement.  With the increased use of mobile technology and apps by children under the age of 13, the FTC initiated its review of the Children’s Online Privacy Protection Act of 1998 (COPPA) in 2010 to allow children’s advocates, website and app developers, and advertising executives and coalitions to chime in on how the FTC should update the outdated rule to protect children from the new dangers of social media, location-based software, video chatting, photo sharing, and more.  With COPPA’s expanded scope, the FTC is making an effort to ensure its regulations cover new technology and innovation.

The Way I See It

  • I see the new COPPA rule expanding the types of companies that are required to obtain parental permission before collecting data and information from children to reflect the digital world we live in today.  COPPA clearly covers mobile and tablet apps, location technology tools, voice recognition tools, social sharing networks including Instagram, Facebook, and Twitter, and online advertising networks, among others.
  • I see the FTC making strides in privacy and data protection regulation with the expanded COPPA provisions, and advertisers and marketers being forced to adapt to new rules for behavioral advertising in particular.
  • The advertising industry has long championed self-regulation for advertising to children, so while the new COPPA rules are broader, the industry may not have too many new practices to adapt.  Many have also begun taking stricter precautions in engaging with and advertising to children in anticipation of the expansion of COPPA.
  • I see that new restrictions on cookie-based and other identification systems could mean some websites targeting children may reduce or stop their use of advertising networks.

The Way the Industry Sees It


I sat down with Wayne Keeley, Director of the Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus, to discuss the FTC’s recent amendments to COPPA and what it means for advertisers, tech innovation, and regulation.

Let’s start by discussing CARU’s response to the expansion of COPPA.  Does the regulation overlap areas of the CARU guidelines?  In what ways is the regulation new for the industry?

Rather than overlapping, I believe that the COPPA rule modifications have brought the COPPA Rule more in line with CARU’s Guidelines.  CARU’s Guidelines represent self-regulatory practices.  Self-Regulation can sometimes go beyond what is required in the law and/or regulatory standards.  For example, CARU’s guidelines went beyond the COPPA Rule in those instances where website operators had a reasonable expectation that a significant number of children will be visiting their websites.  In those instances, CARU said they should employ age screening mechanisms to determine whether verifiable parental consent or notice and opt-out is necessitated.  The old COPPA Rule had an actual knowledge standard.  Under the new Rule, however, the FTC has provided an option for websites with mixed audiences that is closer to our self-regulatory model by providing that sites that target children as a secondary audience can screen users via an age gate.  Accordingly, operators will be required to provide notice and obtain consent only for those who identify themselves as under 13. This is a great example of how the experience gained under self–regulation can make a positive contribution to fashioning workable regulatory approaches as well.  The regulation is also new for the industry in that definitions are added and expanded and the FTC’s oversight of safe harbor programs is enhanced and strengthened. The new definition brings the collection of information for behavioral advertising within the regulation for the first time and will require child-directed sites to obtain parental consent before allowing the collection of information for interest-based advertising on their sites even if that information does not identify a specific child.

What does CARU see as the biggest threat to child safety and protection (i.e., location-based technology, personal data collection, etc.)?  Are there certain trends in social media or mobile technology that are red flags for CARU?

CARU has always seen the collection of personal information from young children as an important issue and had adopted data collection guidelines even in advance of the COPPA legislation.  That aspect has not changed.  The modified COPPA Rule responds to technological innovation (e.g., geo-location based technology) and current technology use (e.g., increase in use of Smartphones by children).  Social media and mobile technology have always been on CARU’s radar from their inception.  Their importance to CARU has grown in direct proportion to the increasing number of young children accessing social media and mobile technology.  While young children are increasingly adopting mobile and social media technology, the basic concerns underlying the creation of CARU – that young children are a vulnerable audience and therefore need protection – remain the same.  We look forward to working with responsible industry members to assure that these concerns are addressed. This is particularly true in the expanding area of mobile apps which are developing rapidly and are subject to the new COPPA rule as well as CARU’s general guidelines if they are child-directed.

Continue Reading Understanding the FTC’s Expansion of COPPA: A Conversation with the Director of the Children’s Advertising Review Unit

Back in October, I talked here on Madison Ave Insights about the FTC’s just-released Green Guides and what they would mean for marketers moving forward. The FTC moved against unfounded and overused “environmentally friendly” and “green” claims in marketing for a range of products. The standards as established challenge the use of unqualified general environmental benefit claims and asks advertisers to scientifically prove specific green claims.

One industry with a focus on the environment that needs to adapt to both the demands of the marketplace and the restrictions of the regulators is the automotive industry. At the North American International Auto Show in Detroit in January, consumers saw the latest model introductions from the automobile industry – domestic and foreign – that presented consumers with each company’s take on the best options for price, performance, versatility, fuel economy and being green.

So what’s next for the auto industry in terms of the future – both the future of the environmental and continued explosion of digital?

The Way I See It

  • Automakers see a double edge sword – a marketing and sales benefit from better fuel economy, but at a higher cost to engineer and build vehicles that consumers will want and can afford. They are facing new regulations requiring them to increase fleet-wide average fuel use to 54.5 miles per gallon by 2025.
  • I see the cycle of government pushing the industry and the industry reacting to the push to be a dangerous paradigm in the current political climate. I see the need for industry to move forward independent of government prodding by satisfying consumer demand with products that are innovative and revolutionary.
  • I see automakers, both current and new, pushing forward with battery-powered, electric cars and pushing the envelope with new retail standards and business strategy. I see electric cars as being a true “environmental” automobile.
  • I see the automotive industry continuing its comeback and becoming even more important as major advertisers.
  • I see the need for breathtaking creative, brilliant strategy and greater use of digital, social media and mobile.

The Way The Industry Sees It

I sat down with Joel Ewanick, President and Managing Director of Global Auto Systems. Currently Joel is involved in several projects most noteworthy is as Special Advisor to the CEO of Fisker. Until last summer, Joel was the Vice President and Global Chief Marketing Officer of General Motors and prior to that Joel was Vice President of Marketing for Hyundai Motor America. In addition, he is best known for being the guy behind Hyundai Assurance. I asked Joel to discuss what’s next for environmental marketing and how the auto industry is evolving with the times.

Why is having an environmental strategy to the automotive sector important?  How does an automotive company present a credible environmental position?

Having an “environmental strategy” cannot be skin deep, it needs to run through the organization like blood through your veins and become a part of the company DNA. It needs to be a total commitment. If a company does not embrace an environmental position, it will be seen as a marketing gimmick – the “sexy” subject of the day, it’s pandering to the consumers. Eventually the consumer sees through it and calls it what it is, “greenwashing.” If a company genuinely cares about the environment, it should demonstrate it in products, offerings, and actions. It starts in the board room, from the top! A commitment from the companies’ executive management, if not – the accounting for such a commitment will eventually derail the programs. It doesn’t happen overnight – it takes time, research, and constant development – from raw material sourcing, to manufacturing, through the sales process, ownership and full circle to the recycling of the automobile at the end of its life. It all needs to be taken into account. As in any industry, there are leaders and there are followers, those who embrace a true commitment to certain technologies no matter the time and cost because it’s the right thing to do. They will reap rewards in decades to come. Fuel Cell technology is a perfect case. Some companies are demonstrating a total commitment to the technology and are in it for the long haul; while others have started but then backed off because the return on investment may be a decade away. These companies are not dedicated or committed, they will be followers.

The auto industry has new fuel efficiency standards to meet.  Do you think this regulation will change the current “fuel economy” advertising strategies?  Will the fuel efficiency standards make the importance of fuel economy claims less powerful?

What will make the claims powerful is the cost of gasoline.  If we continue to experience significant increases in gas prices, like here in California, where gas is at $4.15 to $4.25, consumers will continue to flock to more fuel efficient brands, like Hyundai. If prices stabilize, it will still be important, but it will likely over time become another given, a commoditized feature in all automobiles, like safety.  Volvo and Mercedes Benz owned safety, but through legislation, all cars are basically safe.  It is now a given.  Eventually this could happen with MPG as new technologies emerge.  In the end consumers will look for value, and gasoline, for the foreseeable future, is part of that value equation.

Continue Reading The New Auto Industry: Friend of the Environment and Tech Star

Guess what? When it comes to the claims you make in your advertising, substantiation matters – a lot. The FTC’s recent Final Order against POM Wonderful (POM) in which it found nearly 40 claims made by POM about its pomegranate juice products to be false and misleading based on the absence of proper substantiation, should leave no doubt that the FTC takes the issue of claim support very seriously. And the fact that most of POM’s challenged claims – claims regarding potential health benefits of the products, including that consumption could help treat, prevent, or reduce the risk of heart disease, prostate cancer, or erectile dysfunction – were not actually express claims, but rather implied claims (from both the wording and imagery of the ad), should be a reminder to us all that the entire advertisement and the overall “net impression” it conveys must be carefully considered.

A little background: In September 2010, the FTC issued an administrative complaint alleging that POM had disseminated advertising materials claiming health and disease prevention benefits from consumption of its pomegranate juice products without having a reasonable basis to make those claims. We all remember those ads, a beautifully shot bottle of POM with a broken noose around its neck and the headline “Cheat Death.” In its defense, POM argued that consumers did not take many of its ads literally, so that any perceived health claims in those ads were not material to consumers, and that when it made express health claims in ads, POM had substantiation for the claims, in the form of surveys and of studies done on animals. The FTC’s position was that all the health benefit claims made by POM – whether express or implied – were material to consumers and therefore required a “reasonable basis” of support, which POM lacked. In addition, where POM claimed to have clinical proof of the claim, the FTC argued that POM had no such proof. The FTC’s position was that for the types of health and disease prevention claims POM was making, a “reasonable basis” of support required a well-designed, well-conducted, double-blind, randomized controlled clinical trial (RCT). In fact it required two RCTs. And for the establishment claims, the FTC’s believed clinical proof also meant RCTs.Continue Reading POM Wonderful

The Federal Trade Commission (FTC) ended 2012 with a bang by adopting final amendments to the Children’s Online Privacy Protection Act (COPPA). For those of us who work in children’s advertising, these long awaited amendments came as no surprise. The final amendment, which goes into effect on July 1, 2013, came only weeks after the FTC issued a report that found that mobile applications have demonstrated “little progress” in addressing concerns about the privacy of children’s data.

COPPA was first enacted in 1998 and requires that operators of websites and online services that are either directed to children under thirteen or have actual knowledge that they are collecting personal information from children under thirteen notify parents and obtain their verifiable consent before collecting, using or disclosing personal information from children. The FTC initiated the review to ensure that keeps pace with evolving technology, such as mobile devices and social networking. In other words, the FTC wanted to ensure that COPPA protects the six year old child you see on the bus everyday playing with his parent’s iPhone.

Fast forward to the present. In a move intended to give parents greater control over data collected about their children online, the recent amendments to COPPA increase its scope, requiring additional types of companies to obtain parental consent before collecting personal information from children under thirteen. Specifically, child-directed sites or services that integrate outside services, such as plug‑ins and advertising networks, which collect personal information, are now covered by COPPA. Plug‑ins and ad networks whose operators have actual knowledge that they are collecting personal information through a child-directed website or online service are also now subject to COPPA. In addition to expanding the kinds of companies under COPPA’s purview, these amendments also expand the types of information sites and services are not permitted to collect, use or disclose without parental consent. Geolocation information, photos, videos, and audio files that contain a child’s image or voice, and persistent identifiers that can be used to recognize users over time and across different websites all require parental consent prior to collection. One important exception to the rule is any circumstance in which an operator collects a persistent identifier for internal operational purposes-for example, site analysis and network communications. In such instance, no parental consent is required.Continue Reading FTC Amends COPPA to Strengthen Children’s Privacy Protections

On Thursday during Advertising Week in New York City, I hosted an event called “Mission Impossible: Truth & Privacy – The Future is Now,” featuring Commissioner Julie Brill of the Federal Trade Commission, along with Frank Abagnale, one of the world’s foremost authorities on fraud and identity theft (you may know him best from the film Catch Me If You Can – he was portrayed by none other than Leonardo DiCaprio), and Jonathan Salem Baskin, Co-Author of Tell The Truth. Privacy is an issue everyone is talking about these days, and I wanted to share with you some of the thoughts and issues discussed during the session at Advertising Week. Click here to view a video of Ron’s conversation with FTC Commissioner Julie Brill.

Advertising is a fascinating and complex industry, reflecting the latest innovations, the newest technologies, and, of course, the height of creativity. Advertising is a reflection of the fundamental changes sweeping our society – the transformative effect of digital, the changes in all forms of media, the importance of data and the rise of wireless. Amidst this rapid change, privacy is one of the most important issues in the advertising and media business, and one which demands our attention now, not tomorrow.

The Way I See It

  • I see that digital technology and media has created an unprecedented “Holy Grail” opportunity for marketers to have conversations with consumers as individuals wherever they are on a broad array of devices. The question we must answer is, how do we manage the legitimate privacy concerns?
  • I see the FTC’s role and influence in steering the privacy and data security debate and action rising in importance.
  • I see global marketers and agencies working in good faith either alone or in groups to navigate safely through leading edge issues and the concerns of interested parties – the government, agencies, marketers, technology providers, media and consumers.
  • I see “do not track” continue to be a central issue that focuses many of the important advertising industry and societal issues about both what can be and what should be.
  • I see “privacy by design” being a simple concept, but a difficult concept to execute in real time.

The Way The Industry Sees It

Commissioner Julie Brill of the FTC shared some extremely valuable insights with me and the attendees of our Advertising Week session. I then asked Commissioner Brill some follow up questions that touched upon some of the conversation that we had in our Advertising Week session.

Can you highlight what you see as the role of the FTC in regards to its relationship with the advertising industry’s need to focus on consumer privacy and data security?

The Commission has developed a set of best practices, as outlined in the agency’s March 2012 final privacy framework, for companies that collect and use consumer data. (“Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers,” An FTC Report (Mar. 26, 2012) available at http://www.ftc.gov/os/2012/03/120326privacyreport.pdf.) Because the advertising industry is among the heaviest users of such information, these best practices can be useful to the advertising industry –including ad networks, individual advertisers, and all other players in the advertising eco-system—as they develop and maintain processes and systems to operationalize privacy and data security practices within their businesses. In addition to our policymaking role, the Commission takes action against companies—including those in the advertising industry—that do not treat consumer data in accordance with the laws enforced by the agency. For example, we took action against several advertising networks that misrepresented their practices involving consumers’ ability to opt-out from online behavioral advertising. (See press releases, “FTC Puts an End to Tactics of Online Advertising Company That Deceived Consumers Who Wanted to “Opt Out” from Targeted Ads” (Mar. 14, 2011), available at http://www.ftc.gov/opa/2011/03/chitika.shtm; “Online Advertiser Settles FTC Charges ScanScout Deceptively Used Flash Cookies to Track Consumers Online” (Nov. 8, 2011), available at http://www.ftc.gov/opa/2011/11/scanscout.shtm).

In the fast paced world of marketers and agencies where they must implement “privacy by design”, what is the biggest issue confronting the industry?

Well, there are a lot of big issues. One of the biggest issues is the rapid pace of today’s technological advances. Companies are bringing products and services to market as quickly as they can—and the advertising and marketing have to keep up with that pace. As a result, companies may not be employing a methodical process to consider all the privacy and data security issues that could arise with the product or service, or with an advertising or marketing campaign. I think one of the most important elements of Privacy by Design is for companies to take the time to thoroughly examine the consumer information they are collecting, what is being done with that information, and how it is being safeguarded. In our privacy report, we stress the importance of operationalizing these processes, which will help companies conduct these analyses in an efficient and timely fashion.

Continue Reading Privacy and the FTC: Inside Perspective from FTC Commissioner Julie Brill