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Facebook’s ‘Self Regulation’ Could Cause FTC To Act

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Facebook Inc (NASDAQ:FB), which began displaying mobile ads in March 2012, is expected to face consumer privacy hurdles with its Ad network.

Facebook's 'Self Regulation' Could Cause FTC To Act

Analysts believe that so long as Facebook Inc (NASDAQ:FB) continues its deviation of the market’s self-regulatory privacy terms to make its own ad privacy approach a success, the social media giant will continue to lose the confidence of advertisers to post ads on Facebook.

The self-regulatory privacy program, administered by the Digital Advertising Alliance, is reported to have been widely adopted by biggest agencies and brand advertisers while displaying their ads online. Facebook Inc (NASDAQ:FB), not being the member of DAA, has limited chances of winning advertiser’s confidence to display their ads on its website.

Christian Juhl, president of Razorfish West, which participated in the mobile ad network test, commented of Facebook approach that: “Overall [Facebook needs] to be leading from the front, and right now I don’t think there’s good evidence that that’s happening.”

Juhl talked about the Ad Choices program which utilizes user’s behavioral data from third parties for better advertisement. Juhl believed that their ” brands would have a great deal more confidence in Facebook advertising,” if the Ad Choices icon were used in Facebook ads.

Pressing on the use of the blue ad icon, Juhl commented that the advertisers  “would feel comfortable if they would use this icon”

Facebook, whose ad campaign started picking momentum by the end of last year, has been in talks with advertisers, agencies and self-regulators for the use of standard icon in its advertising.

It is important to highlight that the DAA initiative was taken to thwart a comprehensive privacy law, participated by over 100 ad networks, including big names like Yahoo! Inc. (NASDAQ:YHOO), Google Inc (NASDAQ:GOOG) and AOL, Inc. (NYSE:AOL).

Facebook’s ad network, which acquires data from third parties in addition to tracking  reports of user’s visit to other pages via Facebook Inc (NASDAQ:FB) share button, may fall under the radar of the privacy law by self-regulators and FTC.

Facebook Inc (NASDAQ:FB)’s decision to remain out of DAA projects its intention to stay flexible in product creation without the intervention of any sort of outside influence to become a hurdle in its efforts.

A study revealed that the social networking giant’s rate on mobile ads represents a 70 percent price premium over desktop ads.

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