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Online Profiling Project, P994809 / Docket No. 990811219-9219-01

DANIEL JAYE, CHIEF TECHNOLOGY OFFICER, ENGAGE TECHNOLOGIES, INC: On behalf of my colleagues in the Internet network advertising business, I would like to thank the Federal Trade Commission and the Department of Commerce for the opportunity to participate in today’s workshop.

Earlier this year, a group of companies in the Internet network advertising business began talking with government officials about issues surrounding advertising on the Internet. They include 24/7 Media, AdKnowledge, Adsmart, AdForce, DoubleClick, Engage, Flycast, MatchLogic, NetGravity and Real Media.

The first thing to know about our companies is that we are not "mysterious entities" taking profiling technologies to "dizzying levels" which threaten consumer privacy. Nor are we gathering data in a deliberately secretive way. Our companies are among the leading providers of advertising solutions to web publishers and advertisers. The services we offer have substantial economic benefits for both consumers and companies. And, according to Dr. Alan F. Westin's most recent survey on personalized marketing and privacy on the Internet (available at www.privacyexchange.org), we are providing services that most consumers want to receive using technology adapted to the Internet. In addition, most smaller and medium sized websites use a third party ad server, so we are critical to letting the "little guy" compete with the larger web companies.

The goal of the group was to explore ways in which we could collectively address the types of consumer concerns and misperceptions about profiling that we have heard this morning. Although our companies do not deal directly with consumers on the Internet, we believe we can play an important role in increasing consumer confidence and contributing to the growth of electronic commerce.

To that end, we in the industry are announcing the launch of the Network Advertising Initiative – NAI. Our goal is to develop a framework for self-regulation of our industry. We believe our industry is distinctive because we have no easy way to communicate directly with consumers. Our business is not to make our own websites known to consumers – our business is to make our customer's websites more useful to consumers. To do that, we provide a range of advertising solutions to consumer-oriented websites to support their development and growth.

Internet Advertising – The NAI Companies’ Role

ELIZABETH WANG, GENERAL COUNSEL, DOUBLECLICK, INC.: As many of the commentators today have pointed out, advertising on the Internet has significant benefits for consumers and the industry. For consumers and websites, it’s the reason why content on the Web is available for free or for nominal cost. For advertisers, Internet advertising takes advantage of a medium uniquely suited to delivering the right message to the right consumer at the right time. Our companies use technology to help advertisers deliver these tailored messages. In fact, every consumer who uses the Internet has likely seen the banners and other advertising our companies deliver.

As Dan Jaye and Martin Smith (MatchLogic, Inc.) discussed this morning (Session I, Online Profiling Technology), the NAI companies collect information in order to make decisions on which ads to send to whom. Some NAI companies create profiles about consumers in order to tailor the message.

As Dr. Westin’s survey shows, most consumers want a more relevant message and are willing to accept profiling, but they also want to be given notice about the information that is collected and used, and the choice not to participate in some uses of the collected information.

Our companies understand consumer concerns. As Lyn Chitow Oakes (Flycast) and David Zinman (AdKnowledge) will explain, our companies are fully committed to the principles of notice and choice for consumers. Today we are announcing key tenets of the Network Advertising Initiative. First, each NAI company will continue to provide consumers with a clear explanation of the information it collects, how that information is used, and the benefit to consumers of such use. Second, for consumers who choose not to receive tailored messages, each NAI company either currently provides or will soon provide an easy-to-use method to opt out from such tailoring. Third, our companies are committed to consumer outreach and education – to let consumers know about our companies and the role we play in the delivery of tailored messages over the Internet. In other words, we have heard consumers’ concerns, and are committed to addressing them.

Commitment to Notice and Choice

LYN CHITOW OAKES, CHIEF OPERATING OFFICER, FLYCAST COMMUNICATIONS CORPORATION: NAI companies are committed to providing consumers with notice and choice about Internet advertising. We believe that adherence to fair information practices and data management practices that we are going to describe today are in accordance with the consumer expectations and desires as outlined in Dr. Westin's survey and our business experience.

We believe that education is the key to developing consumer confidence on the Internet. For that reason, our companies are committed to educating our business customers about the data collection and use issues associated with Internet advertising. This includes the benefits of both the responsible flow of information and fair information practices. We are also committed to educating consumers about data collection and use issues associated with Internet advertisements. As Dr. Westin's survey shows, most consumers are willing to share information, even personal information, with companies like ours if they are provided with notice and choice.

As a first step toward meeting consumer expectations, NAI companies will be establishing an educational website located at www.networkadvertising.org. This website has been developed to promote consumer awareness about our industry and provide an easily accessible and convenient place for consumers to exercise choice regarding use of their data.

Our companies also adhere to the fair information practices developed by the Online Privacy Alliance and other organizations interested in privacy. To that end, all the Internet advertising websites owned or controlled by one of our companies will disclose their data collection and use practices on their websites in a clear, concise and conspicuous manner, and in language that consumers can understand. These disclosures will include:

what data are collected and what data are not collected,

how the data are used, including whether they will be combined with personally identifiable data from any other source,

what other data are collected and how they are used, including the use of data for ad management, and

what opt-out procedures are available for consumers who decline to have data used to create a profile.

In addition, NAI companies will, at a minimum, request that their customers, whether they are publishers, e-commerce sites or networks, disclose their own data collection and use practices, including posting a link to either our companies’ websites or the NAI gateway educational website. We will also ask them to post a privacy policy that is consistent with fair information practices.

Commitment on Personally Identifiable Information and Ad Delivery Data

DAVID ZINMAN, VICE PRESIDENT OF MARKETING, ADKNOWLEDGE:

First, I’m going to address the commitments our companies are making when personally-identifiable information is collected. I want to be clear that not all of our companies currently collect such information. However, all of us have agreed to abide by these principles. Second, I’m going to discuss the commitments our companies are making regarding the collection and use of ad management and reporting data, which is non-personally identifiable. This is important because the ability to collect information about consumers in a non-personally identifiable way is unique to the Internet.

Here’s the commitment our companies are making for personally identifiable data. First, our companies that collect these data will notify consumers about the collection and use of their data. And at a minimum, we will let consumers opt-out of unrelated or secondary uses at the time these data are collected. Second, if that data are linked to other personally identifiable information, our companies will give consumers the opportunity to opt-out.

Third, in accordance with fair information practices, our companies that collect personally identifiable information will make reasonable efforts to provide timely and appropriate access to that information under policies that each of us will post on our websites.

As you know, our companies are able to collect information from browsers that is not personally identifiable. We call these data ad management and reporting data. It can include type of browser, type of operating system, IP address, date and time of visit, and ad viewed. This kind of data are used by our companies to transmit, sequence, and report on ads shown to consumers. Let me emphasize again that these data are associated with a particular browser and are not personally identifiable.

The commitment our companies are making today is to provide consumers with the ability to opt-out of the use of these data for profiling, and thus opt-out of the services associated with profiling. However, consumers will not be able to opt out of the transmission of these data for basic ad management and statistical reporting purposes. These data are necessary to deliver the ads, and provide advertisers with information about how many users saw the campaign. For example, today it would be almost impossible for a website to sell advertising space without being able to tell the advertiser how many users will see their ads.

Our companies will post notice to consumers about our data collection and use practices on our websites. We will also give consumers an opportunity to opt-out of the use of these data for profiling purposes. Consumers can opt-out by going to a designated location on each of our companies’ websites or through the gateway educational website we described earlier. As a way of informing consumers about their choices, we will ask all of our customers and participating websites to link to our individual websites or the gateway educational site.

Conclusion

DANIEL JAYE: We believe that the principles we are developing will ensure the continued growth of consumer confidence in the marketplace. However, there is one more element necessary. Although we know that we will follow these industry principles, we want consumers to be assured as well. For this reason, our companies are committed to not only complying with these principles but also to join or retain a third party organization that provides for periodic audits of compliance with our privacy policy. This includes organizations such as TRUSTe, BBB Online, Webtrust as well as nationally recognized accounting firms that provide such services.

Network Advertising Initiative

24/7 Media

AdForce

AdKnowledge

Adsmart

DoubleClick

Engage

Flycast

MatchLogic

NetGravity (a division of DoubleClick)

Real Media