AOL, which is owned by Time Warner, unveiled the program on the eve of a two-day Federal Trade Commission forum on online privacy. While AOL uses what the industry calls behavioral targeting on its Web properties, the company said it's important that advertisers and publishers be upfront with consumers about the practice, and give them the choice to opt out.
"Our goal with this program is to engender greater trust for targeted advertising by communicating with consumers in a more visible way, and by providing them more information about their choices," Curt Viebranz, president of AOL's ad platform called Platform-A, said in a statement. "AOL believes that doing more to explain to users the choices they have over the way their data is used, and helping them exercise those preferences will help them feel more in control."
AOL's privacy technology will be available through a Web site that'll be linked to opt-out lists run by the largest advertisers. Consumers' preferences will be stored using a Web cache technique that will stay in place even when consumers delete their browser cookies, which is the only way people today can avoid tracking. The technology was developed by Tacoda, a behavioral ad network company that AOL bought in July.
AOL said it is considering licensing the Tacoda technology on a royalty-free basis for use exclusively in consumer privacy protection programs. "We want to make the opt-out process as simple and transparent as possible," Jules Polonetsky, chief privacy officer for AOL, said. "We urge the industry to join us in ensuring that users who take steps to minimize the data they provide have their choices maintained."
The opt-out program will extend to AOL's entire display ad network, which includes AOL's and third-party sites. The portal claims the network reaches 91% of online U.S. consumers across more than 7,000 sites.
AOL plans to market the existence of the opt-out program, while trying to encourage people to take advantage of the benefits of targeted advertising, which is based on anonymous data. People who opt out will receive the same number of ads as people who agree to tracking.
Behavioral targeting has been a major lure of the Web for advertisers, Delivering ads that are relevant to the user makes it more likely the person will buy a product or service. What's seen as a more effective form of advertising has shifted ad spending to the Web and away from traditional outlets, such as TV, radio and print.
In the first half of the year, Internet advertising revenues in the U.S. reached nearly $10 billion, a 27% increase over the same period last year, according to the Interactive Advertising Bureau. Advertisers spent a record $17 billion online in 2006.