UK ISPs stand to make a lot of money from targeted advertising
The online advertising industry has launched a set of guidelines for a genre of adverts that have been causing controversy.
The code of practice drawn up by the Internet Advertising Bureau looks specifically at behavioural advertising.
This form of advertising delivers ads based on people's browsing activity and is therefore far more targeted.
UK ISP BT is planning to roll out such advertising developed by US firm Phorm.
The guidelines which have been signed by key players including Phorm, AOL, Google, Microsoft and Yahoo agree on three core commitments:
- Notice. A company collecting and using online information for behavioural advertising must clearly inform a consumer that data is being collected for this purpose
- Consent. A company collecting and using online data for behavioural advertising must provide a mechanism for users to decline behavioural advertising and where applicable seek a consumer's consent.
- Education. A company collecting and using online data for behavioural advertising must provide consumer with clear and simple information about their use of data for this purpose and how users can decline.
Behavioural advertising, in which customers who, for example, browse websites about cars are sent advertisements about cars, has long been controversial with privacy advocates.
The industry is keen to stress that advertisers do not know who individual users are because the information collected is anonymous.
"There is no personally identifiable information. They don't have your name, address or phone number. Instead search terms are linked to a random cookie number in a general geographic area," said Nate Elliott, a principal researcher at Forrester.
He said he had been surprised at the level of controversy raised by Phorm's partnership with BT.
"There are dozens of companies that have been doing this type of advertising for years. Google stores search information and uses it to better target future searches, for example," he said.
According to Forrester 26% of European online advertisers used behavioural-based systems during 2008.
The IAB estimates that behavioural advertising could generate an income of £200m for UK online advertisers.
The promise to make it easy for customers to opt out of such services will not go far enough for some who want to see all such services offered on an opt-in basis.
BT told the BBC that it is likely to offer its Webwise service, the technology devised by Phorm, on an opt-in basis.
It has not yet given a date for when the service will roll out but has completed several trials of the technology.
The first two of these trials created controversy because they were conducted without the consent of BT customers.
The European Commission is still considering whether it will take action against BT on this matter.
Privacy campaigner Richard Clayton thinks the code of practice is doomed to failure because it doesn't address the opt-in debate.
"The bottom line is that if I'm prepared to tell advertisers where I browse and what adverts I want then all well and good, but I don't want them snooping on me," he said.
"The IAB has gone to great lengths to ensure that the industry protects and educates consumers on their rights and choices," said Nick Stringer, head of regulatory affairs at the IAB.
"Behavioural advertising has clear benefits to consumers, delivering more relevant advertising and keeping most of the content and services we enjoy free of charge.
"However it's in its infancy and we need to let consumers know they are in control," he said.