Google and Yahoo! back privacy rules for targeted ads

Some of the world's largest internet companies, including Google and Yahoo!, have signed up to a set of targeted advertising guidelines in the UK to provide consumers with greater privacy and protection.

Targeted or behavioural advertising, where advertisements are sent to a consumer based on internet browsing activity, made headlines in the UK last year when the advertising technology firm Phorm announced partnerships with internet providers.

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The Phorm agreements with BT, Carphone Warehouse and Virgin Media and prompted some to warn that online privacy would be eroded, a concern that Phorm denies as it says it looks at internet users' anonymous browsing trends.

Nick Stringer, head of regulatory affairs at the Internet Advertising Bureau (IAB) said in an interview with Reuters: "Behavioural advertising makes up about 20 per cent of the online display advertising market and if this is going to grow, we need to have consumer trust."

The IAB in the UK said it had launched a set of good practice principles after working with internet players such as AOL, Google, Microsoft, Phorm and Yahoo! in the last year.

Rules on collecting personal data already exist in the UK but the guidelines complement them by giving advice on collecting anonymous data.

Under the proposals, all online behavioural advertising platforms must clearly inform a consumer before taking any data, and they must provide a way for users to decline behavioural advertising.

They must also explain what they do with the data.

Internet advertising has grown rapidly in recent years, and brands hope to develop it further by providing consumers with more relevant advertisements based on their previous browsing activity.

For example, an internet user going on holiday could be sent advertisements for hotels, car rentals and restaurants in their desired location.

The IAB said it had signed up 10 partners, which were advertising networks, technology companies and online publishers.