Online marketing must become more transparent or risk the The Office of Fair Trading (OFT) imposing industry regulations, says its new report.
Speaking specifically about the targeting and behavioural online advertisement sector, the OFT said that more could and should be done to inform users about how personal information about them is gathered and used.
The behavioural advertising industry is a rapidly-growing one, and the OFT has spent seven months compiling its report in which it calls for the industry to self-regulate in providing ‘clear notices alongside behavioural adverts and information about opting out’.
Internet marketing
The OFT has given its full backing to the establishing of a long-term regulatory system within the internet marketing and advertising industry, led by the industry’s trade body, the Internet Advertising Bureau (IAB). Should this action fail to do enough, the OFT will look into ‘strengthening the effectiveness of regulation’ as a backup and to establish an understanding of when it would intervene.
Privacy concerns have dogged the internet marketing community for some time now, with social media – and Facebook in particular – feeling the brunt of the backlash over its privacy settings, which it has announced it is simplifying this week to allow easier user control.
The regulatory proposals from the OFT do not seek to protect only the privacy of users merely for the sake of it. The Office has voiced concerns that data collected from users could be used for targeted pricing; that is, used by unscrupulous vendors to vary prices of goods and services dependant on a user’s previous purchases and browsing history. In other words, the OFT wants to protect consumers from being charged over the odds in the situation where a company knows a user’s entire internet activity, and can therefore judge what they can get away with charging them.
The OFT has proposed that the IAB develop a sign that will inform users when an advertisement is based on their own personal user information. Such a sign in the US already exists, and is backed by five industry bodies, although the IAB in the UK has said that it will only back the use of a badge here once there is pan-EU support for it first.
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