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Belch: Advertising and
Promotion, Sixth Edition
VII. Special Topics and
Perspectives
21. Regulation of
Advertising and Promotion
• Disclosing fully and prominently both the marketer’s identity and the use for
which information is being gathered in every communication.
• Giving consumers the right to bar marketers from selling or sharing any information
collected from them as well as to review the personal information collected.
Recently the major privacy issue regarding the Internet that has emerged involves
undisclosed profiling whereby Web marketers can profile a user on the basis of name,
address, demographics, and online/offline purchasing data. Marketers have suggested
that profiling offers them an opportunity to target specific niches and reach consumers
with custom-tailored messages. However, the FTC has stated that Internet sites that
claim they don’t collect information but permit advertisers to surreptitiously profile
viewer sites are violating consumer protection laws and are open to a charge of deception.
99 In 1999 DoubleClick, the company that is the leader in selling and managing
online advertising as well as tracking Web users, set off a controversy by connecting
consumers’ names, addresses, and other personal information with information it collects
about where consumers go on the Internet. The controversy resulted in the company
being investigated by the Federal Trade Commission and lawsuits being filed in
some states. 100
In response to the profiling controversy, companies that collect Internet usage data
and information joined together under the banner of the Network Advertising Initiative
(NAI) to develop a self-regulatory code. 101 The NAI has developed a set of privacy
principles in conjunction with the Federal Trade Commission that provides
consumers with explanations of Internet advertising practices and how the practices
affect both consumers and the Internet itself. The NAI has also launched a website
(www.networkadvertising.org) that provides consumers with information about online
advertising practices and gives them the choice to “opt out” of targeted advertising
delivered by NAI member companies (Exhibit 21-16). Another industry-driven initiative
is the Platform for Privacy Preferences (P3P), which is a new technology that lets
consumers screen out websites via operating system software. This technology gives
consumers greater control over the collection of information by allowing them to
specify their privacy preferences electronically and screen out websites that do not
meet these preferences. The privacy debate is likely to escalate, and it is expected that
legislation will be introduced to force companies to seek consumers’ approval before
sharing personal information captured from their websites.
While these proposals are aimed at protecting the privacy rights of adults, one of the
biggest concerns is over restricting marketers whose activities or websites are targeted
© The McGraw−Hill
Companies, 2003
Exhibit 21-16 The
Network Advertising
Initiative website provides
consumers with information
about online advertising
practices
745
Chapter Twenty-one Regulation of Advertising and Promotion