Advertisers Must Tell Consumers When Sponsored-Content is Tailored to their Specific Interests

Arlington, VA — November 4, 2015 – The Online Interest-Based Advertising Accountability Program today published its first cases requiring the familiar AdChoices icon or its equivalent when native advertisements are geared to consumers’ personal interests based on their browsing history. Today’s cases bring Gravity and Outbrain, two companies specializing in native advertising, into compliance with the Digital Advertising Alliance’s Self-Regulatory Principles for Online Behavioral Advertising, or “OBA Principles.” The cases demonstrate that the OBA Principles apply whether the ad format is traditional or the latest trend to hit the market.

Native advertising has risen rapidly in the last few years and is expected to generate $21 billion in revenue by 2018, up from $4.7 billion in 2013. Personalized advertising has been shown to more than double revenue. Together, they are a powerful tool for reaching consumers, but the combo also raises consumer privacy concerns. So, it is vital that advertisers give consumers the transparency and choice the OBA Principles require, regardless of ad format.

“Through our in-depth reviews, the Accountability Program has brought real-time notice to a new and growing digital ad format that reaches hundreds of millions of people every month,” said Genie Barton, Accountability Program Director. “This is a big win for advocates of transparency.”

The results of this interest-based native advertising review highlight the Accountability Program’s commitment to addressing important shifts in the digital advertising market that may affect consumer privacy. They also illustrate the layered approach the Accountability Program takes to ensuring compliance. To begin with, the Accountability Program offers confidential counseling to companies that seek its help to come into compliance. Where the Accountability Program sees a new issue arising from innovation in the marketplace or finds that a clarification of the Principles is warranted, it issues a compliance warning. After giving companies an opportunity to seek confidential guidance and implement any necessary changes in their practices, the Accountability Program initiates formal inquiries that result in public decisions or administrative dispositions. In the rare event that a company declines to participate in the review process or to implement the Accountability Program’s recommendations, the Accountability Program may refer the company to the appropriate government agency.

Today’s releases mark the 60th public action taken by the Accountability Program, with only one referral.

Case Summaries:

Gravity operates a content recommendation engine that web publishers can harness through the use of a “widget” on their websites. These widgets often appear at the bottom of stories on publishers’ websites and may feature sponsored recommendations—a type of native advertising—that were selected using interest-based advertising (“IBA”) technology. While Gravity provided clear disclosures on its own website regarding its IBA practices, it did not provide the required enhanced notice link to alert consumers about Gravity’s data collection and use practices or its IBA opt out. As soon as Gravity became aware of the Accountability Program’s concerns, it voluntarily and speedily came into full compliance.

Outbrain is the operator of another content recommendation engine that uses IBA technology. While it was not fully compliant with the OBA Principles, Outbrain was aware of its duties and had already begun working—both with its publisher partners and internally—to bring its operations into compliance prior to the Accountability Program’s formal inquiry. The Accountability Program closed this case as an administrative disposition rather than a decision, as it always does with companies that take the initiative to resolve compliance deficiencies prior to being contacted by the Accountability Program.