Will The Online Ad Industry Finally Get Serious About Protecting Consumer Privacy?

I'm in Washington, D.C. today, and privacy is on my mind.  Not only are important Congressional hearings on privacy and the online ad industry being held today, but recently a number of important U.S. regulators and legislators have made it clear that if the industry is not going to get serious about adopting a self-regulatory framework that provides meaningful privacy protection for consumers, a regulatory framework will be imposed on it.

Further, the Financial Times reported today that a group of Europe's national data-protection and privacy commissioners, known as the "Article 29 working party," just released a report calling for tighter privacy rules across Europe for the management of consumer data by social networks and other Web sites that host third-party applications.

Whether you like it or not, a lot of folks who matter are worried about how consumer data is used -- and misused -- in digital marketing. While some or many of the fears may be unfounded, it doesn't matter. The fact that the fears exist requires that they be dealt with. If digital marketing companies are going to get serious about confronting this issue, now is the time.



What should folks do to make sure that they're on the right side of the privacy issue? Here are some of my suggestions:

Take privacy protection seriously. Protecting consumer privacy is a very important issue, one that could have massive consequences for the digital marketing industry. It's on the front burner in Washington because it's a hot-button issue to tens of millions of Americans. Don't underestimate  both the public's concern and the ability of policy makers to step in and fix it if the industry doesn't.

Support and  embrace self-regulation. The Interactive Advertising Bureau is working with a number of other trade groups on a proposed self-regulatory framework. Get behind it. Its success is critical to our industry.

Pay attention to government leaders. Jon Leibowitz, Chairman of the Federal Trade Commission and Representatives Rick Boucher and Bobby Rush are among those leading the charge to better protect consumer online privacy, in the regulatory and legislative arenas respectively. They are well-respected, know their stuff and have a lot of political and public support. If we work with them, we will get the best result.

Be straight with users. This one was taught to me by The Wall Street Journal's Walt Mossberg, who is not only one of the world's most important journalists on personal technology, but who has been a real advocate for Web sites and online marketers being more transparent with online data collection. Follow his counsel: Be straight with users and tell them what data you're collecting and what you're doing with it. You can only win that way.

What do you think about the online privacy issue? Am I making too much of it? Too little?

6 comments about "Will The Online Ad Industry Finally Get Serious About Protecting Consumer Privacy?".
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  1. Steve Baldwin from Didit, June 18, 2009 at 1:32 p.m.

    I'm glad that you wrote this article and agree with all of your points. I am less than confident that this industry can effectively regulate itself, unless there is a magic way to prevent all bad actors from obtaining sensitive data about people and doing with it what they wish. Given that this scenario is unlikely or impossible, what I think we will wind up is the "opt in" scenario. Unless consumers proactively opt in, no data will be allowed to be harvested, and such data will have to be handled according to strict guidelines. Yes, this will create havoc in our business, but we're going to have to live with it.

  2. Sandi Brown from Penton Media, June 18, 2009 at 1:50 p.m.

    We are consistently getting feedback from our sales force that our unwillingness to share email addresses from readers who click through on ads within our newsletter products with sponsors is putting us at a disadvantage in lead generation in our email marketing efforts. Is the industry really moving in this direction to share valuable email addresses with sponsors, knowing full well these readers will be solicited by the advertisers?

  3. Ann Betts from FetchBack, June 18, 2009 at 2:04 p.m.

    While I do believe that legislation is coming, regardless of efforts from the Industry to self-regulate itself, I believe that the result is one that will focus primiarly on transparency vs. an Opt-In only status. The BT industry should adopt a way of notification and easy opt-out for consumers with in the ads themselves. This is what Google and FetchBack are doing already - providing a link within the ad that when clicked, tells consumers why they saw the BT ad they saw, as well as providing a quick and easy way to Opt-out of future advertisements. This is just the first step into this form of transparency, and I'm sure it will evolve over the coming months.

    The most important takeaway is that those in the BT world need to understand that this legislation is coming (as early as this fall based on Boucher's comments in today's opening statements.) Better to be ready than be caught off guard. We cannot say that we didn't have notice.

  4. Warren Lee from WHL Consulting, June 18, 2009 at 2:39 p.m.

    Good treatment, as usual. We have heard so much about the government asking the industry to enact its own set of rules and regulations about this issue, but, even since I joined the BTSC (Standards Consortium) and have followed efforts of the IAB and NAI, there has been no real, massive, industry movement to do as asked, as yet. Why? Is it head in the sand mentality? I urge the industry to please come up with standards that will allow for the long term use of BT as it is a great way to keep internet content free. As noted by Jeff Hircsh in an article today by increasing the effectiveness of online advertising one of the end results will be that there will be less ad clutter on sites and more relevant content. I long for the day when I actually see an advertisement for a fly fishing lodge in Canada because, even though it is an advertisement, to me it would be relevant content (and I would action it).

    The bottom line is that some organization in the industry needs to publish a set of guidelines for the BT space that all agree to. . . and soon.

    Thanks again for the insightful article Dave.

  5. Stephen Shearin from ionBurst Media, June 18, 2009 at 3:20 p.m.

    I continue to read about how consumer data is misused and the danger to the comsumer, but I haven't yet seen an example with regards to any legitimate interactive advertising company. Use of data for targeting is not like ID or CC theft. Being a privacy henny penny is not helping anyone. The security sky is not falling as a result of pixeling and targeting.

    With that said, the 'onine ad industry' is large enough and diverse enough that effort should be made to delineate between groups that may be collecting harmful data and those that are effectively targeting in a way that consumers consistently say they prefer while using non-invasive data collection. Knowing that someone visits auto sites in spanish and serving them an ad in spanish for auto products is hardly a violation of privacy.

    I love Dave's suggestions here, and completely agree that the industry-at-large is best served by aggressively self-regulating. With that said, if one searches with any variety of terms for abuse of cookies, one only sees people fanning the fear and a lot of terms like 'potential', 'possible', and 'alleged.' There is definitely room for meaningful discussion, but I wish someone could point me to real-world examples in place of hypotheticals.

  6. Tom Kelly from AOL, June 18, 2009 at 4:38 p.m.

    I'm glad you're never afraid to touch the hot stove, Dave. While there definitely are some bad actors in the space, the
    Future of Privacy Forum has it right in focusing on the good actors. By, as an industry, focusing on proactive steps some (in this case 11) groups are taking, my group Safecount is included, legislators and policy makers see a more well rounded picture of our space and may be less likely to impose their own rules.

    Not to mention the fact that, while those bad or questionable actors are already muddled in lawsuits and court proceedings, most of the groups mentioned in the FPF gallery are performing well in an exceedingly challenging current environment.

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