Blog Post

FTC’s Vladeck: The Era Of Self-Policing Online Ads Is About To Change

David Vladeck, the new head of the Federal Trade Commission’s Bureau of Consumer Protection, is not one to be impressed by the arguments that web users appreciate ad targeting because they get free content in return. And don’t even bother telling him that consumers want to see more relevant marketing messages. In a NYT profile, Vladeck lays down the law: the era of self-policing may not be entirely over, but the industry is in for drastic changes.

While he seems to be using the NYT piece to put the industry on notice, it doesn’t look like he’s bluffing. Since coming into the post six weeks ago, Vladeck, a former public interest attorney and professor, has demanded more money from Congress and is trying to cut the red tape out of regulatory changes.

Orwellian ads: Consumers’ privacy is not being safeguarded under the current methods, Vladeck tells the NYT, saying he finds most companies’ policies on the matter useless and that in some cases ad tracking is “Orwellian.”

The Sear’s case: As for how Vladeck might try to address the issues, the FTC’s settlement with Sear’s over its ad targeting practices offers a glimpse of where he wants to draw the lines. The department store chain ran a promotion that offered consumers $10 if they agreed to download software that would follow their web browsing. But when Sear’s managed to collect personal data like bank records and health information, the FTC decided to put a stop to it, even though consumers did not suffer economic damage, as the enforcement rules typically call for. Vladeck, who consulted with the FTC on the Sear’s matter (the suit was brought before he joined the commission), says that he would expand the bureau’s purview to include cases that affect consumers’ “dignity,” not just their wallet.

Opt-in: The fact that Sear’s website outlined its targeting practices is not enough for Vladeck, who says that consumers hardly ever read — or, for that matter, understand — the long, legalistic user-license agreements. The answer, it seems, according to Vladeck, is the one the industry has strenuously been resisting for the past year: requiring all websites that track to get users’ okay the second they visit the site. The industry, which is already in the throes of a severe recession, is concerned that if users have to opt-in first, it will ruin any chance of actual targeting. After all, most people try hard to avoid advertising, so unless there’s some greater incentive, they’ll likely say “no thanks” to an ad, targeted or otherwise. In response, Vladeck turns the industry’s argument back to them: if consumers really do want relevant ads, why don’t you be upfront and ask them directly?

One Response to “FTC’s Vladeck: The Era Of Self-Policing Online Ads Is About To Change”

  1. Jim Spanfeller

    I have to say, while the general consensus around this issue is that legislation and / or strict doctrine around online privacy will be bad for online advertising I think in fact it will be a good thing. Perhaps a very good thing. for the most part BT simply does not work. Re-Targeting does but has real implications for the end user and for content creators. By setting standards that reward the intersection of great content creation with great advertising messages the web should see a huge uptick in brand marketing and this is, of course, the big win for in terms of ad revenue share.