Behavioral advertising refers to the use of information to predict the types of products or services of greatest interest to a particular consumer. Online behavioral advertising takes two forms. “First party” behavioral advertising refers to situations in which a company’s website uses information that it obtains when interacting with a visitor. “Third party” behavioral advertising refers to situations in which a company permits others to place tracking cookies on the computers of people who visit the company’s website, so that those individuals can be monitored across a behavioral advertising network.
Two self-regulatory associations – the Network Advertising Initiative (“NAI”) and the Digital Advertising Alliance (“DAA”) – have created standards for companies engaged in third party online behavioral advertising, as well as promoted mechanisms for consumers to opt-out of being tracked. In addition to the self-regulatory effort, on January 1, 2014, a California statute went into effect that requires a company to notify consumers if such company permits third party behavioral advertising in certain situations. The following is a snapshot of information concerning behavioral advertising.
2
Number of state statutes that may require companies to disclose the use of third party behavioral advertising.1
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104
Number of companies that are members of NAI.2
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292
Number of companies that are members of DAA.3
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73
Number of references on FTC’s website to “behavioral advertising”4
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2 - 60
The number of tracking cookies placed by the top 5 retailers on their websites.5
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What to think about when evaluating your organization’s online behavioral advertising practices:
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Does your privacy policy comply with state law requirements concerning the disclosure of first party online behavioral advertising?
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Does your privacy policy comply with state law requirements concerning the disclosure of third party online behavioral advertising?
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Does your organization state or imply that it only permits behavioral advertisers to use its website if those advertisers utilize the opt-out mechanisms of NAI and/or DAA?
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If so, do all of the behavioral advertisers that you permit to use your website permit opt-out via the NAI and/or DAA mechanisms?
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Who within your organization has the authority to permit third parties to place cookies on your website?
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Who within your organization maintains a comprehensive list of all cookies placed on your website?
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Has the legal department reviewed the contracts with each behavioral advertiser with whom your organization has a relationship to verify that their privacy practices comply with law and with the standards of your organization?
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Have you audited the cookies that are placed, or tracked, on your website?
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Have you verified the accuracy of the description of behavioral advertising contained on your website?
1. Cal Bus. & Prof. Code §§ 22575(b)(5)-(7); Del. Code 1204C
2. Companies listed on http://www.networkadvertising.org/participating-networks as of January 2017
3. Companies listed on http://www.aboutads.info/participating as of January 2017.
4. Based upon Google search restricted to FTC.gov conducted in January 2017.
5. Top 5 eCommerce retailers as identified by the National Retail Federation in May of 2016. Quantity of cookies identified by Ghostery on retailer home page on May 6, 2016.
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