• by Wendy Davis , Staff Writer @wendyndavis, March 10, 2009

The online ad world needs to come up with some new self-regulatory standards for behavioral targeting -- and quickly. So says former Federal Trade Commission chair Deborah Platt Majoras, who spoke this morning at the ANA's advertising law and business affairs conference in New York.

The issue is especially pressing, she said, because the new FTC chair, Jon Leibowitz, as well as commissioner Pamela Harbour, have shown "skepticism" toward whether the industry can adequately protect Web users' privacy. Last month, both commissioners wrote separate concurrences to a recent FTC report, in which they expressed doubt about whether self-regulation will be successful.

Speaking before a crowd of attorneys, Majoras made what's by now a familiar case for a hands-off approach by government, arguing that the government can't react to a fast-changing industry as effectively as people in that industry.

Majoras also said that the industry could develop guidelines that are more stringent than what lawmakers could enact, because the government faces First Amendment obstacles to laws about advertising.

In fact, when the FTC proposed new voluntary guidelines for behavioral targeting in December of 2007, the Newspaper Association of America responded by arguing that government agencies had no business getting involved in ad practices. The newspaper association said in its written comments that ads are a form of speech, and that papers have the right to serve ads, provided they aren't misleading. But, frankly, if self-regulatory standards can't be enforced, then it might not matter that those standards are more stringent than what the government could enact.

Certainly in the past, there was no serious industry attempt to enforce online privacy standards -- which were never all that rigorous in the first place. The self-regulatory group Network Advertising Initiative required that sites disclose practices in privacy policies and allow consumers to opt out of behavioral targeting, or receiving ads based on sites they previously visited.

Companies could satisfy this obligation via "mouseprint" notice -- which few if any consumers read. Also, companies could -- and did -- drop out of the NAI, or simply fail to join the group, with no consequences.

Industry groups say now they will enforce behavioral targeting policies. But, realistically, it's hard to envision any trade association successfully asserting authority over Web advertising, given the vast number of publishers, advertisers and intermediaries that play a role in digital marketing.