ONLINE BEHAVIORAL ADVERTISING: Trends, Public Policy, and Consumer Reactions

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1 ONLINE BEHAVIORAL ADVERTISING: Trends, Public Policy, and Consumer Reactions Moderator Paul H. Luehr, Managing Director, Stroz Friedberg October 20, 2011 Copyright 2009, STROZ FRIEDBERG, All Rights Reserved

2 Evolution of Advertising Early Web One-to-many communications , Instant Messaging, Texting Two-way communications Social Media Many-to-many mode of communication Mobile devices Any time, anywhere communications

3 What is behavioral advertising? the collection of data from a particular computer or device regarding Web viewing behaviors over time and across non-affiliate Web sites for the purpose of using such data to predict user preferences or interests to deliver advertising to that computer or device based on the preferences or interests inferred from such Web viewing behaviors. Source: The Self-Regulatory Principles for Online Behavioral Advertising, published in July 2009 by the American Association of Advertising Agencies, the Association of National Advertisers, the Council of Better Business Bureaus, the Direct Marketing Association, and the Interactive Advertising Bureau

4 Year-in-Review Legal Trends Government Reports Congressional Proposals Litigation Technical Trends Browser - Do Not Track Settings Facebook Changes App Explosion

5 The FTC Staff Report New Framework based on 3 Principles: 1. Privacy by Design Would require companies to bake in privacy at outset Scalable based on company size Substantive protections - security, collection, retention, accuracy 2. Simplified Choice Around both data collection and usage at time of collection Simplified (no longer opt-in/opt-out) Browser-based Do Not Track mechanism Given: fulfillment, internal operations, fraud prevention, legal compliance, firstparty marketing, and contextual advertising 3. Greater Transparency Just-in-time notifications Standardized and streamlined privacy policies

6 Department of Commerce Green Paper Issued on December 16, 2010 Advocates voluntary, self-regulatory rules of conduct Proposes a Privacy Policy Office within the Department Encourages Fair Information Practice Principles (FIPPs) Advocates for global interoperability of privacy laws Recommends a federal data breach notification law

7 Legislation U.S. Senate Do-Not-Track Online Act of 2011 May 9, Sen. John Rockefeller U.S. House - Do Not Track Kids Act of 2011 Sept. 15, J. Barton (R TX), E. Markey (D MA) California Do Not Track Bill, SB 761 Feb. 18, A. Lowenthal (D-Long Beach)

8 Litigation/Enforcement Cloud Litigation: Over 150 class action suits filed over privacy issues. Self-Regulatory Enforcement BBB, DMA, and Evidon begin enforcement

9 Technology Trends protect against not deletable long-term cookies, a new generation of 'Super-Cookie

10 Facebook More Changes Timeline the scrapbook of your life Gestures beyond like Frictionless Sharing one-time app approval

11 App Explosion

12 Apps - Revenue Growth

13 In-App Purchases

14 Questions?

15 Resources FTC Privacy Report Department of Commerce Green Paper 0.pdf CDT Consumer Privacy Information cdt.org/issue/consumer-privacy arstechnica.com/tech-policy/news/2011/07/why-the-us-needs-a-dataprivacy-lawand-why-it-might-actually-happen.ars DAA Self-Regulatory Principals