Brands told to “wake up” to behavioural targeting law

Companies that take data from consumers’ computers to help develop targeted online advertising have been told to “wake up” to the implications of soon to be introduced legislation that will require them to gain consent from consumers to collect information.

The new ruling will require marketers to obtain consent from visitors to their sites to store and retrieve data usage information from users’ computers. The technique, described as a “cookie”, is used for several reasons, from remembering passwords to analysing consumer browsing habits for use in behavioural targeting.

Business leaders are concerned that marketers don’t appreciate how much this will impact on the way they collect customer data.

In a speech this week, Christopher Graham, the UK Information Commissioner, says that businesses need to “wake up” and start thinking about how they will meet the requirements of the new law, which comes into force on 25 May.

The Department for Culture, Media and Sport will be responsible for implementing the EU’s Privacy and Electronic Communications Directive in the UK.

The department has been working with the ICO and Internet Advertising Bureau to work out how best to help marketers meet the requirements of the directive in the UK.

There is a belief in the industry that the directive could slow the growth in behavioural targeting. The Office of Fair Trading estimates the value of the behavioural targeting market has risen to between £64m and £95m.

The IAB is in the process of rolling out a pilot scheme with companies including Yahoo!, Microsoft and AOL that will see an icon appear by or in display ads that will offer information about online behavioural advertising. Crucially, it will offer consumers an opt-out.

The IAB, which hopes that the icon will be adopted widely by the end of 2011, plans to organise a compliance and enforcement task force that will oversee take up.

The Advertising Standards Authority, however, could be asked to play a role in regulation if the transparency measures do not work although no decision to extend the watchdog’s remit has been made.

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