Q&A: Peter Kosmala, managing director, Digital Advertising Alliance

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With nearly 10 digital privacy bills introduced this Congress, Peter Kosmala, managing director of the Digital Advertising Alliance, discusses what the organization is doing to raise consumer awareness of the industry's self-regulation program, responds to its reported challenges and explains how the industry plans to address mobile privacy.

Direct Marketing News (DMN): The Federal Trade Commission has extended the public comment period for their upcoming online privacy report. What is the DAA doing to inform the public about the Advertising Options icon?

Peter Kosmala (DAA): It's a timely question because there's a major consumer outreach campaign that we're actively planning now for a fall timeframe. I can't give you an actual broadcast date yet. [A member agency of the American Association of Advertising Agencies] ... has done a significant amount of consumer research that's already been completed on awareness of the icon; understanding its purpose, its usefulness; the actual experience of using it; and whether that means an opt-out or not by that consumer. That analysis is being done now, and that is going to form the basis of the actual creative communication to the public. 

We've also been able to obtain online advertising inventory through our stakeholder organizations, the IAB [Interactive Advertising Bureau] and NAI [Network Advertising Initiative]. These are member companies that will actually donate and serve this campaign when it's ready in the fall. There is going to be a special effort as a part of this to target folks in the public policy community as well, in Washington, D.C., specifically, so that regulators are also aware of what we're doing, how the progress is coming along, what sort of effect it's having. I can't speak to what the research has unearthed yet, but I can say that's being gathered now and you'll be hearing a lot more about that in the fall.

DMN: When I've spoken with friends, family members and acquaintances about behavioral advertising opt-out mechanisms, they have no idea the targeting or icons even exist. Even those who follow technology blogs and have heard of browsers' Do Not Track tools don't really care or necessarily understand why they would use it. What's the temperature that you've gauged of consumer awareness since joining the DAA?

Kosmala: I think it's increasing. Regrettably, I don't have hard survey data to share with you right now, but know that it's coming.  Do Not Track, I'm not really going to comment on in terms of a tactical implementation or even a public policy direction, other than to say that's a hard opt-out. That's a very blunt, high-level setting that has a certain utility, but where I see it being disadvantageous as a consumer is that there's not a lot of granularity in that. It's basically saying, ‘I'm not going to accept cookies for these sites or for every site I go to.' That's not just going to take you as a consumer out of the mix of [online behavioral advertising (OBA)] campaigns; that's going to take you out of the targeted content, other types of services that are going to rely to some extent on what you're doing on a web page or where you've just come from that could, in fact, be quite useful: sports scores, weather services. So I find that a little troubling. 

The DAA Advertising Option icon, as we call it officially but known popularly as AdChoices, enables you, strictly for OBA, the option as a consumer to select what you are receiving. There are some uses of targeted advertising that folks really appreciate. If the problem is clutter and interruption and intrusiveness, that's the underpinning of any privacy issue. The OBA addresses that quite effectively, because it's not just throwing a generic message at you and hoping that it sticks. Instead, it's learning a little bit, not a bunch, just a little bit about where you are in the moment or where you may have just come from, such that what you receive is going to be a lot more relevant to what you're doing and, we would hope, be that much more informational, that much more useful, whether or not you elect to click on that ad.

DMN: Google runs the AdChoices icon on its behaviorally targeted ads, but it also has a Do Not Track tool for its Chrome browser. Would the DAA ever look to work with the browser developers to create a capability in which the browser could recognize whether a web page features behaviorally targeted ads and run a small drop-down notifying the consumer of the ads and featuring the AdChoices information?

Kosmala: We're not in active discussions with them now. That's not to suggest that it couldn't be a future possibility. I can't comment to the technical feasibility of it; I just don't understand enough about the implementation. I really see these as mutually exclusive mechanisms that are trying to achieve similar goals, but are doing so in markedly different ways. 

I think it's important for consumers to understand that difference. That may be part of the consumer awareness campaign that we run in the fall, not contrasting against Do Not Track but explaining more about why this level of granular control that I've just described is actually a lot more beneficial in terms of your choices as an online consumer.

DMN: Last month Evidon CEO Scott Meyer told the Wall Street Journal that less than 10% of online behaviorally targeted ads feature the AdChoices icon. That seems to be a major issue.

Kosmala: Two responses: One is that he's commenting on OBA ads that are delivered by Evidon. We love Evidon. They are one of three approved providers, DoubleVerify and Truste being the other two. These are terrific companies, all of which having different businesses and different gauges in the marketplace, but they're all demonstrating a commitment to helping build out and make more visible the Advertising Option icon program and the self-regulatory framework in general. And they're going to be communicating quite frequently on their own, and they're entitled to talk about what they're seeing with their client base in terms of numbers and penetration. That's all good, but just bear in mind that that's one piece of a larger constellation of distribution and response that we're seeing from the DAA. While I can't offer what our DAA metrics are with you yet, that's actually being determined now and that's part of a broader set of metrics and outreach that we do in the fall. 

I guess the second part would be that if it seems a small percentage to you, it's because this is growing quite dramatically month-over-month. In terms of companies that are online and signing with the DAA for the icon program, [we've seen a] 50% increase month-over-month since the beginning of the year. I think a great time to revisit this conversation and that number is in the fall when we've built that momentum continuously through the summer.

DMN: Is the adoption rate in line with your expectations?

Kosmala: It is. We have a very small staff, but we have all the major trade groups at the table, helping to build this out. And as I've just described with the consumer outreach campaign, we're leveraging that kind of research, agencies and ad networks to help us in this effort.

DMN: Mobile continues to be a large part of the conversation around digital privacy. There's more data involved, more location information. It seems if the advertising industry doesn't get ahead of this issue, it could reach a point where there's a Time magazine cover story on mobile privacy that mentions behavioral advertising on mobile devices and could sway the conversation against the industry. What's being done to migrate the icon to mobile?

Kosmala: I would agree with you entirely that mobile as a technology platform, as an application platform, is tremendously exciting and has tremendous possibilities that we're already seeing manifest itself and logically privacy and security should be part of that equation. There have been a number of different efforts. Individually, the IAB has formulated a set of guidelines around mobile advertising. The Mobile Marketing Association has essentially articulated a framework as well. 

Know that in terms of online behavioral advertising, which is the current focus of the DAA, we have an effort actively underway, in fact a special committee has been formed around it, to migrate web-based OBA principles to the mobile environment. For the most part, these principles do migrate efficiently and effectively. There is some adjustment that needs to be made because there are obviously unique things about mobile. It's not, in fact, all web-based. That's part of it, but there are also proprietary technologies, applications, network protocols. There's a lot of data exchange between multiple layers. Who owns that data, how does it pass, where are the permissions coming to play for that? A lot of complicated issues, but I'm confident it can be sorted out. 

Our goal is to articulate a formal set of OBA principles for mobile that take the same structure, the same sort of enforcement strategy, that our current self-regulatory framework does and publish those principles in a draft form later this year. You'll see an indication first of what the principles look like, and I would expect shortly thereafter an actual rollout of a program. That's the kind of breadth and scope that advertisers are looking for. Their buys are not centric to television or online or mobile; in many cases, it's all of them. If they're going to become compliant with privacy, they're going to want to do it across platform, and we want to make that as seamless as possible, but as effective as possible as a consumer protection.

DMN: Would you want to get ahead of the issue now to alert consumers that you are working toward this?

Kosmala: The word is out. We haven't announced it in terms of a formal press release or anything, but folks are starting to pick on this and ask us, and we've responded and said that this is an area we're looking at. I think one of our sensitivities there is we don't want to make it appear as if we're taking on too much at once, so that we won't effectively execute against our principal goal. Right now, [that goal is] the web and making sure we have a robust, stable, successful online program for self-regulation of OBA, before we start going into directions like mobile or international expansion into other jurisdictions.
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