NAI Issues Revised Code Of Conduct For Interest-Based Advertising

Google, Microsoft and Yahoo are among the members of the Network Advertising Initiative that have pledged to comply with the group’s revised Code of Conduct. The updated code addresses the increasing complexity of the third-party online advertising ecosystem and introduces new requirements around interest-based data collection and advertising.

The 2013 Code of Conduct marks the first revision since 2008 for the self-regulatory organization. The NAI membership is made up exclusively of third-party digital advertising companies. At its inception in 2000, the members were all ad networks. Today’s membership reflects the expansion of third-party advertising and includes demand side platforms (DSPs), supply side platforms (SSPs), data management platforms (DMPs), data aggregators, ad exchanges, creative optimization firms, yield optimization firms and sharing utilities.

2013 Changes

Among the major revisions to the code of conduct is the formal inclusion of the “enhanced notice requirement.” Under this requirement, companies must include the standard industry “AdChoices” icon or other form of notice on interest-based advertising. All companies must configure their systems to support this capacity.

Sexual orientation is now included in the list of sensitive data. Companies are prohibited from collecting information about a user’s status or perceived sexual orientation for interest-based advertising without obtaining opt-in consent.

The NAI makes special note that the group does not intend to limit retargeting on visits to websites like wedding registries, dating sites and other services for couples. However, companies are not allowed to create interest segments based on sexual orientation (“gay male,” for example) or retarget visitors to sites that “reflect a user’s sexual orientation” such as a dating site targeted to LGBT visitors.

Under the health transparency requirements, companies must obtain opt-in consent to target ads based on interest or perceived interest in “precise” sensitive health concerns such as cancer, mental health-related conditions and sexually transmitted diseases. Companies must also disclose any standard segments they are using that are based on health-related information or interests.

The NAI removed general location data like IP addresses or city from the list of Personally Identifiable Information and from the definition of “Precise Geolocation Data”, which is no longer included in the list of sensitive data. However, the NAI does acknowledge that location data is often sensitive, particularly when location data can be grouped to track and build profiles of user movements.

The NAI’s revised code reflects the policies of the Digital Advertising Alliance and the FTC’s Self-Regulatory Principles for Online Behavioral Advertising.

In the coming months, the NAI will educate members about the revisions and will begin enforcing the revised Code in 2014.