The biggest challenge in mobile marketing may not be what the technology can do, but how the benefits of data-driven ads affect the privacy of the consumers they target.
Much has been said about the "creepy" factor of compiling information about your kids, location, financing and health. At the same time, studies show 70 percent of consumers prefer to see ads that align with their personal interest.
Lou Mastria, executive director of the Digital Advertising Alliance, has been at the eye of the privacy hurricane for years while working in public affairs, government and the ad industry. He also holds a masters degree in public policy. In his current role, he reflects his industry-backed group's push for self-regulation of advertising practices. He's had plenty of success.
Under his leadership, the group has released principles to establish best practices and has won praise from government regulatory agencies like the Federal Trade Commission.
We spoke with Mastria at his group's second annual summit in San Francisco, asking him about DAA's mission, its own efforts to police the industry and its role in educating consumers about their right to opt out of digital ads.
Murphy: How old is the DAA, what's your main mission and how do you differ from other groups like the Interactive Advertising Bureau?
Mastria: Our main mission is to provide a self-regulatory answer for balancing the needs of consumer privacy with the need to ad-fund the Internet. We have to balance that every single day. IAB, DMA [Direct Marketing Association] and others actually sit on our board, but they're really trade associations. We're a self-regulatory body.
Companies don't just join somehow the DAA, they certify to be part of the DAA. They actually have to abide by the principles of the DAA code, which includes transparency, control -- there are seven principles they have to abide by -- including the policing of their actions. Importantly, while we do have companies that participate with DAA in this way, we also take the position that we police the entire ecosystem. Whether you're a participant or not, it doesn't matter. If you're doing interest-based advertising, we're looking to see if you're compliant or not.
Murphy: If they're not members and not compliant, what do you do?
Mastria: We've had 37 compliance actions publicly announced so far in the two-and-a-half years the compliance program has been in place. We typically put out a press release saying 'So-and-so is non-compliant.' The reality is that most companies want to be compliant, so once there is an issue brought to their attention, they typically take action to come into compliance. We've only had to refer one company to the federal authorities. We retain that right, no matter what. If someone doesn't come into compliance, we do turn it over to the FTC, or in the case of the one company, the Consumer Financial Protection Bureau. The reality is that companies, as I said, want to be compliant. They see how strategically important it is to their financial future.
Murphy: That leads into my next question. You have a very good relationship with the FTC. I imagine you'd both rather see the industry policing itself than see the government policing it.
Mastria: I think we offer a method for the government to rely on us to police the industry. We're not just a set of books or a set of codes. We actually enforce it, day in and day out. Those 37 actions in two-and-a-half years touched 170 companies just in those actions. Plus, we talk to members, we help guide them into compliance. Yeah, we think we offer a credible way for government to say, 'Hey, look, we have missions. There is only so much bandwidth we can devote to anything. It's great to have a partner in the private sector who is actually watching this part of the space for us.' I don't know if they would say it exactly that way, but it's certainly the way we think about it.
Murphy: You have a new app coming out this fall. Very briefly, could you tell us what it does, what your goal is and how you plan to market that to the consumer?
Mastria: The app is going to be a free download from the two major app stores in the fall. It will give consumers the ability to control data that's being collected across apps to deliver relevant advertising. So consumers will have an extra layer of transparency control in their phone, available to them at any time to see, 'Oh, there are certain companies sending messages to me,' and they can opt out of any or all of those companies with basically one click.
In terms of marketing it to consumers, we'll be doing a big rollout, as you might expect, with press releases in the fall. Beyond that, part of our mission includes consumer education. We already did one big campaign in 2012-2013. We ran it for 14 or 15 months. We'll probably undertake a similar action shortly after the launch. Right now, we're kind of in a transformative state -- which is probably where a lot of media and marketing companies are, too -- between desktop and mobile. We wanted to wait until we got the mobile piece out so we can say 'Your choices are against all of these streams. It's not just one stream.'