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The ad industry wants to create a global regulator for internet ads

Global group wants coalition of marketers, publishers, and ad tech companies to gather data on 'annoying' advertisements

PUBLISHED : Wednesday, 01 June, 2016, 8:40pm
UPDATED : Thursday, 02 June, 2016, 12:16pm

Global advertising trade group, The World Federation of Advertisers (WFA,) has proposed plans that could see the creation of a global advertising watchdog that would regulate internet ads.

The announcement follows a report released earlier this week from PageFair — a tech company that provides ad blocking solutions to publishers — that claimed there are at least 419 million people blocking ads on smartphones worldwide. That's in addition to the 198 million desktop ad blocker users. 

The WFA — which represents marketers at major brands who are responsible for around 90 per cent of global marketing spend — said the growth of ad blocker usage is a clear sign from consumers that they have had enough of online advertising.

Rather than fight ad blocker usage with technology, the WFA says the advertising industry needs to make better ads that people won't want to block. It's a similar stance that has been taken by other industry bodies like the internet advertising trade group the IAB.

However, WFA's proposed plans look like they are taking a slightly different direction to other trade bodies.

Firstly, the WFA wants to assemble all representative parties in the advertising chain — marketers, publishers, and ad tech companies — to create a global coalition. 

The coalition will help technology partners to collect data on the kind of advertising consumers find annoying. Unlike other studies looking at this issue, which usually rely on survey data, the WFA wants to actively monitor real user behavior to identify the type of formats and frequencies that people find annoying.

Then, the coalition will create a set of advertising standards that the industry should adhere to — some of which will be applied globally (prohibiting the kind of advertising seen as "universally problematic"), while others will be applied locally, respecting different cultural perspectives.

WFA CEO Stephan Loerke explained that the proposals go one step further than other existing plans to identify and remedy the cause of ad blocking because they will be based on real consumer data — "removing the arbitrary opinions of industry leaders or self-appointed consumer representatives."

He describes the effort as "not dissimilar" to the challenge the industry faced decades ago that led to self-regulatory bodies like the Advertising Self-Regulatory Council in the US and the Advertising Standards Authority in the UK being set up.

Those bodies assess complaints about ads and publish their recommendations to advertisers. The bodies don't have the power to fine companies, but the negative PR is usually seen as punishment enough — plus the regulators can refer serious offenses on to the Federal Trade Commission in the US or the Competition and Markets Authority in the UK, which can hand out fines.

Loerke admitted that setting up a global ad regulator is "not an easy task" and that the ad industry is currently discussing what shape it could take. There are clear barriers to launch, including differing opinions from all players in the ad chain as to what an acceptable format looks like and the fact that the laws in different countries surrounding areas like privacy and advertising vary wildly.

Loerke wouldn't discuss at this stage how the self-regulatory body would be funded — but he did say the cost would only be a fraction of global ad spend.

Eyeo, the owner of popular ad blocker Adblock Plus, already operates an "Acceptable Ads" program, whereby ads that are not deemed irritating are white-listed for its users and users of other ad blocking apps that have signed up to the program, like Adblock. Big companies such as Google, Amazon, and Taboola pay a percentage of their ad revenue in order to appear on the list. Generally, the ad industry has opposed Eyeo's business model and it has been referred to everything from "blackmail" to "extortion."

Loerke explained the difference between what the WFA is proposing and Eyeo's system is that its regulator would not operate on a for-profit basis. In addition, the standards it will create will be backed by consumer data, rather than relying on the points of view of industry representatives, he said. (At the moment, Eyeo and its user forum decide on the Acceptable Ads standards. However, Eyeo is looking to set up an Ad Standards board, with representatives from the ad industry, publishers, academics, and consumer representatives. Meanwhile, Google is also exploring the creation of an acceptable ads policy, working in partnership with industry groups.)

Via email, Loerke set out his intentions for the WFA's plans:

  • —Brands will stop investing money in formats and delivery frequencies which the data indicates to be generally problematic.
  • —Ad technology companies will stop serving formats and frequencies which the data indicates to be generally problematic, and will invest in developing experiences better aligned with consumers.
  • —Publishers will stop hosting formats which are seen to be generally problematic.

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