The Online Interest-Based Advertising Accountability Program just released another compliance warning, stating that the use of Interest-Based Advertising (IBA) in native advertising must comply with the Digital Advertising Alliance's (DAA) Self-Regulatory Principles. The warning marks the third notice provided by the Program and focuses specifically on consumers' right to transparency and control.

Key provisions of the warning are as follows:

Third Parties

  • Real-Time Enhanced Notice – Third parties must ensure that enhanced notice is provided with each interest-based ad (including native ads) and that such notice is provided in real-time (i.e., when the consumer is actually viewing the ad). Enhanced notice can be provided in one of the following ways:
    • Hyperlink in or around the native ad
    • On the webpage where the ad appears (with the cooperation of the website operator)

The link must redirect the consumer to a place where he/she can (i) opt-out; and (ii) obtain more information about IBA.

The warning also noted the AdChoices Icon as a popular method for providing notice and further clarified that a "phrase that is clear to a consumer" may also be utilized in providing the enhanced notice link.

  • Clear Disclosure – Third parties "engaged in interest-based native advertising across the web" must further include the following on their own websites:
    • "Clear, meaningful, and prominent" disclosure of IBA data collection and use practices (including transferring data to other parties)
    • Clear description of their opt-out mechanism(s)
    • Statement that the company adheres to the DAA Principles

Website Publishers

  • Notice – Website publishers allowing third parties to collect data for IBA purposes on their website must provide notice of said collection, if the data will be used for native advertising on non-affiliate websites. In such case, notice must be provided in the same manner as required by any other third-party collection for IBA. 

All Companies

  • Choice – All companies are required to ensure that consumers have a "functional, easy-to-use way" of opting out of data collection, use or transfer for IBA purposes. Companies must additionally ensure that any opt-out cookies set by the company's choice mechanism expire, at minimum, five years after the date on which they are set. The warning also mandates that all companies honor consumers' choice not to partake in IBA.

We view these requirements as a third-party contracting issue.  Accordingly, companies should look at their respective contracts with third parties that conduct native advertising on their behalf (such as sponsored Facebook posts or Tweets and Paid Google Search responses, Bing responses, etc.) and ensure that:

  • The ad network or other advertising partner has agreed to treat native advertisements as Online Behavioral Advertising (OBA) (as defined by the Better Business Bureau and Federal Trade Commission), if they use OBA technologies
  • Any such ad network or advertising partner is a member of the DAA or Network Advertising Initiative (NAI) and has registered their opt-out cookie with the DAA
  • Any such ad network or advertising partner uses the OBA icon in native OBA ads, together with whatever additional notice is typical for the medium to indicate paid or sponsored status

Enforcement of the above principles is set to take effect on January 1, 2015 with respect to the web, with enforcement in the mobile sphere to follow in mid-2015.