Consumer Privacy

NAI Achieves Highest Level of Member Compliance in Consumer Privacy

noga Noga Rosenthal is currently the General Counsel, VP for Compliance and Policy at the NAI, the leading self-regulatory association comprised exclusively of 3rd party digital advertising companies. Noga was previously SVP of 24/7 Media and Media Innovation Group. The Makegood recently spoke with Noga about NAI’s high level of member compliance.

The Makegood: Congratulations on achieving such a high level of member compliance review at NAI. What does this achievement mean for regulators, business partners and consumers involved?

Thank you! We are extremely proud of our members’ commitment to consumer privacy – as demonstrated by their overall compliance with our Code of Conduct. 2013 was a big year for online privacy. Much of the world discussed and debated issues; what “tracking” means, government surveillance and HTTP cookies. At the same time, the NAI and its members helped promote the responsible collection and use of data for Interest-Based Advertising (IBA) through our compliance and accountability program.

Our Annual Compliance Report provides transparency into what the compliance and accountability process entails and showcases the third-party online advertising industry’s commitment to self-regulation, consumer trust and privacy.

The Makegood: Why is self-regulation so important in the digital advertising industry? What factors are of particular importance in the industry, and why should these companies self-regulate?

When self-regulation works effectively, it’s a win for the industry, regulators and consumers. We believe that self-regulation works best if it is backed up by rigorous enforcement and accountability. That’s precisely why we conduct our extensive member review each year.

Collectively, the NAI and evaluated member company staff invested countless hours in the 2013 Compliance Review process. We reviewed thousands of pages of questionnaires, privacy policies, marketing materials and other documents. We manually reviewed the life span, content and behavior of more than 500 potential interest-based advertising (IBA) cookies. We also used automated technical monitoring to help spot potential issues with member opt-out functionality.

We do this to help our members comply with the requirements of our Code that are based on the Fair Information Practice Principles (FIPPs), encompassing notice, choice, transparency, use limitations, data security, access and accountability requirements with respect to IBA activities. By going through our review process, our members help demonstrate that they are among the most responsible companies in the industry. For many, NAI membership helps provide peace of mind for their business partners and customers.

We believe that these industry-led efforts our members have taken in the last two years in the area of online privacy are the best way to set high standards, promulgate best practices and provide consumers with effective tools to exercise choice about IBA.

The Makegood: How has NAI improved and strengthened its self-regulatory program over the past years?

We believe that our self-regulatory program must be nimble and keep pace with rapid changes in technology and business practices. Therefore, we constantly seek to improve and strengthen the NAI’s self-regulatory program.

Last May, the NAI released an updated self-regulatory Code of Conduct. The 2013 Code revisions clarify many of the obligations under the Code and, in some cases, impose additional requirements on members. For example, the definition of “Sensitive Data,” which requires Opt-In Consent, was expanded to include sexual orientation. The NAI has also been working with member companies to help provide more transparency around standard segments they use for IBA purposes that are based on health-related information. Another significant enhancement to our self-regulatory program has been the addition of a technical monitoring tool, which helps us monitor the effective functioning of opt-out requests.

While the NAI is pleased with its efforts to improve its self-regulatory program and the hard work of its members to comply with the Code, the NAI constantly seeks to improve its program.

The Makegood: How does the NAI work with its members to ensure a continuing commitment to protecting consumer privacy?

Members demonstrate their commitment to transparent and responsible data management practices by aligning their practices with the requirements of the NAI Code.

Members’ own efforts are supplemented by NAI staff, who, though they cannot advise members on their individual legal obligations, can and do help member companies throughout the year. The NAI staff works with them to identify potential issues with business practices that involve the NAI Code, monitor the IBA ecosystem holistically, observe best practices and spread those best practices throughout membership.

We often speak with members one-on-one to answer their questions about the Code and about best practices in certain areas. In fact, every week we have several conversations with members seeking our feedback on Code requirements and industry best practices when considering new product lines or technologies.

We would also like to mention that many advertisers look for companies that are part of the NAI, knowing that these companies have publicly committed to honor high standards with respect to the collection and use of data for IBA.

The Makegood: Will NAI expand its membership to many other marketing and advertising companies in the coming years?

The NAI continues to grow every year. In fact, the 2013 Compliance Report represents our largest compliance review to date.

The NAI expanded the organization’s self-regulatory program through its issuance of the NAI Mobile Application Code of Conduct in 2013, opening membership to mobile-focused companies. The Mobile Application Code, which is substantially similar to the 2013 Code, covers data collected across mobile applications, rather than desktop websites. It is specifically tailored for the rapidly evolving mobile advertising ecosystem.

We are currently accepting membership applications from mobile networks, exchanges, and other ad tech companies specializing in mobile advertising. We are also working with existing members to bring their mobile advertising services into compliance with the Mobile Application Code, which is currently scheduled to go in to effect in early 2015.

The Makegood: Thank you, Noga.