The UK Advertising Standards Authority has today announced new rules on online behavioural advertising (OBA) which are intended to increase consumer awareness of and choice over the use of OBA. The rules will form part of the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (known as the “CAP Code”) from 4 February 2013, which applies to online advertising, including banner ads and pop-up ads in paid-for space.

OBA is advertising targeted to individual users based on data about their previous web browsing activity (e.g. if you’ve recently looked at buying a new TV from an online retailer, a banner ad for that product/retailer may appear next time you log into your e-mail account). The new rules will require advertisers to (i) notify web users if they are collecting and using web viewing behaviour data for OBA purposed and (ii) provide a clear opt-out mechanism so that users can prevent the website from recording their web viewing choices and passing on this data to be used for OBA by that website or a third party.

The new CAP Code rules derive from an EU level self-regulatory initiative by the newly launched European Interactive Digital Advertising Alliance (EDAA). The initiative includes framework principles for OBA and a new icon that businesses can use in or around ads to indicate that information about viewing behaviour is being collected and used for OAB and to provide a link through to further information about OAB and an opt-out mechanism. Changes to advertising rules in other EU markets to reflect the EDAA framework principles are likely over the coming months.

Given the attractiveness to advertisers of targeting their advertising spend at customers who are more likely to be interested in purchasing a particular product that they stock or buying from that retailer generally, the new rules are unlikely to reduce advertisers’ interest in OBA; however it will be interesting to see how many users value privacy over relevant ads and decide to opt-out of OBA.