The Network Advertising Initiative (NAI), composed of top US web companies like Google, Yahoo, Microsoft, AOL, and Fox Audience Network, released a code of conduct for behavioral ads.

The NAI acts as a central body to set and police data use in place of the Federal Trade Commission (FTC).

The document sought to clarify common terms, update existing policies, and provide policy that restricts the type of data that can be collected for ad targeting without explicit permission from the end user, ClickZ reports.

The NAI did tighten guidelines regarding transparency in data collection practices. Ad networks and publishers remain inobligated to notify web users of what data they collect, beyond what is explained in the small print of catch-all website privacy policies.

Logistically, it would be difficult to put such a notice in an ad or on the page where the ad is delivered, said NAI Executive Director Trevor Hughes, because advertisers and publishers have no direct control over the real estate on website or in banners.

The bulk of NAI's membership are the companies that sit between the advertisers and publishers. As of April, it had 15 members; seven months later, there are 25 in all, including other small behavioral networks and firms.

The FTC, which advocates self-regulation in the industry, declined to comment on the disclosure issue, but it appears that the new NAI code does not comply with the government agency's statement that companies communicate behavioral targeting practices in a manner that is "clear, concise, consumer-friendly, and prominent."

An upcoming staff report on behavioral targeting will elaborate upon the Commission's position as well as other aspects of behavioral targeting, assured an FTC public affairs officer.

Spend on behavioral targeting will increase to $4.4 billion by 2012, up from $775 million this year, according to an eMarketer study.