Online ad industry welcomes OFT’s study of practices

The Office of Fair Trading’s decision to investigate behavioural targeting and online pricing practices could revive consumer confidence, according to industry experts.

The OFT last week announced two market studies into online. One will focus on targeting and pricing of advertising, covering behavioural advertising and customised pricing. The second will look at how prices are advertised, including drip pricing and time-limited offers.

The digital industry has supported the studies, hoping they will bring greater understanding of online pricing models and behavioural targeting, particularly to clear up misinterpretation of the technique.

Chris Pelekanou, sales director at Guardian News & Media, said, “There is a myth surrounding behavioural targeting, so this study could bring more transparency.”

Kurt Edwards, head of digital sales at Bauer, said transparency was vital to reassure consumers that best practice is adhered to.

“This report coupled with ongoing education of all companies in how best to apply behavioural targeting will ensure it has a more prominent role to play in coming years,” he said.

Ian Maude, analyst at Enders, said, “Anything that clarifies the rules and encourages transparency around advertising should be welcomed.”

The move comes nearly two months after the OFT launched a 21-day consultation during which parties could submit their views and advise on the scope of the proposed market studies (nma 27 August 2009).

OFT senior director Heather Clayton said in a statement last week, “These studies will ensure we keep up to date with developments and how pricing and advertising practices are emerging and evolving online.”

Richard Sharp, MD of media and head of trading at online ad network ValueClick Media, welcomed the findings that the studies would deliver. “We expect the research to show that as long as consumers don’t feel their privacy is at risk and that no personally identifiable information is used, they’re happy with the offers made available to them through behavioural targeting,” he said.

Stuart Colman, European MD of behavioural targeting firm AudienceScience, said, “I don’t believe this is an enquiry into whether the use of behavioural targeting is right or wrong, but to check there are safeguards to ensure fairness for all consumers. It should look into exactly what it covers in other sectors: when people are delivered a price in an ad, is that price fair and is it a price accessible by all, not just the group of users seeing that particular ad?”

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