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The legal requirements: Targeted advertising

Technology has revolutionised the way adverts are targeted at consumers.

By tracking the websites that users are visiting, the items they are viewing and the devices that they use, ad agencies and brand owners are able to build a profile of the end-users, which can be used to serve targeted ads.

What does this mean for retailers?

This is good news for retailers as targeted ads bring nearly three times as much revenue as traditional network advertising. However, some consumers are suspicious of targeted advertising and regulators are paying increased attention ensuring that retailers are complying with the relevant legal requirements.

The legal requirements

The Data Protection Act (DPA) applies in all cases where you are able to identify an individual end-user. This will clearly be the case where a user logs on to a site and you know exactly who they are. Points to consider include:

  • You have a legal obligation to inform people about how you are using their data.
  • You must ensure that you either have the individual’s consent to such use or that you can justify the use of their data as being in your legitimate interests without intruding into the individual’s privacy rights.

What does this mean in practice?

You must:

  • Provide easily accessible and clear information to users about how their online behaviour is tracked.
  • Enable users to opt-out of online tracking.

As well as ensuring compliance with legal obligations, these mechanisms should help reassure consumers that you respect their privacy.

In addition, where cookies are used the Privacy and Electronic Communications Regulations require you to obtain consent from the users to place cookies on their devices.

Consent does not necessarily mean ticking a box to accept cookies on a site; it can be implied by the fact that an individual continues to use a site in full knowledge that cookies are used. If implied consent is relied upon it will only be valid if users are provided with clear information on the home page about cookies at the outset, including information on how to disable them.

To conclude

Some industry bodies have made good progress developing online tools enabling consumers to opt-out of targeted advertising, for example, the Interactive Advertising Bureau (IAB) approved ‘Do Not Track’ icon. Nevertheless retailers need to be aware that such tools offer no guarantee of legal compliance and need to be reviewed in conjunction with other information provided on the site.

For more information please contact Alison Deighton, on 0117 917 8016/ Visit

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