Fed Regulator Tells Marketers Be Careful with Data Collection
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Fed Regulator Tells Marketers: Be Careful with Data Collection

4 minute read
Tom Murphy avatar

Marketers recite the benefits of mobile tracking like a mantra: It helps giveconsumers the information they want at the exact time and place they want andneed it. What's not to like?

No matter how hard they try, however, today's cross-channel digital marketerscan't quite escape the "creepy" factor — the concern corporations have too much information on the who, what, where and when ofour lives.

That point was driven home very gently yesterday as Jessica Rich, directorof the bureau of consumer protection for the FederalTrade Commission, delivered a speech to the annual summit of the DigitalAdvertising Alliance. The speech contained plenty of plaudits, but alsoexhortations to "press forward" with self-regulatory efforts that willmake it easy for consumers to opt-out of tracking and data collection entirely.

The Big Three

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In particular, she cited three areas of current focus: big data, mobiletechnologies and managing sensitive information.

Big data can help consumers, but also can cause problems. "Whencompanies collect, store and share information about individual consumers,especially invisibly, it raises concerns," she said, adding that thecommission will use its enforcement powers to go after companies that actinappropriately. "For obvious reasons, we're not waiting for Congress topass a new law."

"Mobile also raises some new issues," she said. "The abilityof these devices to track your location really raises special consumerprotection concerns." For example, she expressed concern about the abilityof mobile devices to connect with each other in the Internet of Things, and thelimits of small-screen or no-screen devices to inform consumers of their rightto opt-out of data collection.

Another concern: Rich pointed to a recent FTC settlement over kids' apps thatcollected data from the mobile devices of children without disclosure. The data included their precise location and phone numbers.

That explanation bled into managing sensitive information, especially withregards to children, finance, health and geolocation. The FTC has alreadypursued 53 settlements against companies like Microsoft, DSW, LifeLock andRite-Aid to halt what it perceived as abuses.

Location-Based Concerns

Geolocation, which helps marketer target ads by tracking the exact locationof consumers, can also show where people worship, what political groups theyvisit, the routes kids take to school and other information. "It's reallyour strong position that precise geolocation is sensitive information thatrequires opt-in consent because it can show so much about a person," saidRich.

Facing Realities

To be sure, the industry seems to have gotten the message. The DAA is an industryconsortium formed by such leading media and marketing organizations as theDigital Marketing Association, the American Association of Advertising Agencies,the Association of National Advertisers, the Interactive Advertising Bureau andthe Network Advertising Initiative.

Rich has worked closely with the group inits efforts to create self-regulating activities such as its Ad Choices programthat help consumers opt-out of ad programs. This fall, it will introduce AppChoices, an application that makes it simpler to opt out on mobile.

Learning Opportunities

The DAA is bullish on self-regulation, recognizing that inaction could leadto harsh legislation that has far-reaching and unintended impacts on theindustry, perhaps even the broader economy.

Before Rich spoke, DAA ExecutiveDirector Lou Mastria reviewed a recent survey that showed 58.5 percent ofconsumers acknowledge the Internet has helped them learn of products andservices that they otherwise wouldn't have known about. Nearly 70 percent saidthey prefer to receive ads that are tailored to their interests, he said.

"This is why effective self-regulation is so important to oureconomy," said Mastria.

More, Please

Rich repeatedly praised the groups efforts, but called for more.

"Keep working towards getting consumers what we believe they want -- aneasy way to control unwanted tracking," she said. "This will requireprogress on two fronts: improvements to your existing Ad Choices program andalso finding a way to accommodate the do-not-track signals that are now offeredby the major browsers."

A minute later, she elaborated on the do-not-track browser options. "Iknow you're still working on finding a way to accommodate that. This is reallyimportant work and I urge you to press forward on that," she said.

When consumers opt out, she said they typically believe they are opting out ofall programs, on mobile and the web, but Rich noted that isn't the case."Keep working towards making that easier," she said.

There are clear financial incentives for the industry that are driving thesechanges, but Rich close with another reason. "Consumers want it."

Title image by Filipe Frazao / Shutterstock.com