Commentary
FTC To Give Industry Its Chance To Protect Privacy
- by Dave Morgan , Featured Contributor, May 13, 2010
In fact, Leibowitz went so far as to opine that behaviorally targeted online ads can deliver a valuable service to consumers if they mean fewer, more relevant ads for Web browsers. Apparently, he's also getting tired of all of the irrelevant ad clutter that clog up most Web sites these days!
Leibowitz' announcement is big news for everyone in the advertising, marketing and media industries. For the past two years, the FTC and Leibowitz have sounded the drumbeats that the marketing industry should either regulate itself when it comes to protecting online privacy, or the government will step in with its own regulations. Those drumbeats were significantly amplified recently when Congressman Rick Boucher (D-Va.) and Cliff Stearns (R-Fla.) released proposed federal legislation that would impose a new regulatory privacy protection framework across the collection and usage of marketing data, both online and offline. While many have hailed this proposed bill as balanced, a number of its key terms are defined very broadly, leading to concerns that if the bill becomes law, it could have dramatic, unintended and imperiling impacts on a multitude of forms of online and offline ad delivery.
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That the FTC is now telling the world that it is prepared to give the industry its chance at self-regulation -- while there's proposed legislation in the hopper and ready to go -- is welcome news to all of the media companies, marketers and agencies who have been working so hard through the Interactive Advertising Bureau, the 4As, ANA and DMA. Those organizations and a number of others, to both improve consumers' confidence that their private information is safe online and forestall the need for government regulation, have created a self-regulatory program to protect online privacy that will be administered by the Better Business Bureau,.
However, it's clear from Leibowitz's remarks that the industry has no free pass here. In fact, most would say that the industry is under more pressure now to gets its act together on privacy. Leibowitz was adamant that industry members have to improve the notice they give to consumers about what data they are collecting and what they are going to do with it. And those notices must be in common, plain language. As he remarked, data collection practices for many sites and network marketers is virtually "incomprehensible" to most consumers.
I have to agree with Leibowitz here. For example, who reading this blog can tell the rest of us in common, plain language about all of the data Facebook collects, and what it does -- and doesn't do -- with that data? I can't.
This is the time when our industry has to become truly user-friendly on data and privacy. Even when the industry works very hard to protect consumer privacy, it tends to do a terrible job communicating what it does clearly and simply. That won't last. The FTC is giving the industry its chance. The IAB and others have given us a framework to police ourselves. Now is the time to put up or be regulated. Leibowitz is certainly aware that if the industry doesn't take the carrot he just offered yesterday, Boucher and Stearns are right beside him ready to swing a really big stick.
What do you think? Are we ready to take up and deliver on the chance that Jon Leibowitz has offered us? Let us know in the comments section below.
This is a great opportunity but I fear that it will be wasted. I've yet to see a significant move towards reasonable self-regulation within in our industry. It's a shame, because outside regulation promises to be complex, costly, and a bad deal for everyone but bureaucrats.
We know this needs to be taken far more seriously. The question is, who is powerful and committed enough to lead from within?
Dave, this is definitely welcome news for all of us. I'm hopeful that the collectors of data will take the lead like Lotame, BlueKai, and others have to provide transparent "here's what we collect about you" solutions for consumers. I'm also hopeful that NARC announces its winner soon so that we can all move ahead on a self-regulatory compliance platform to manage preference, choice, and data transparency.
Cheers,
Eric L. Porres
CMO, Lotame Solutions Inc.
http://www.lotame.com
A great opportunity for the industry that shouldn't be squandered. Much of the early protection proposals threw the baby out with the bathwater. By showing consumers that there are 'responsible' and beneficial ways to use targeting to benefit both consumers and advertisers, the targeting industry can continue to move forward.
It's also important to keep in mind that audience targeting isn't a single approach but covers a wider range of technologies and methodologies. That said, it also means that even the best safeguards and guidelines for use can't prevent eventual instances of misuse and abuse by people hell bent to use these tools purely for their own gain.
I believe that the IAB, 4A's, ANA and DMA are powerful enough and committed to making it work. We need to press all of them to require that ALL members comply with their self-regulatory framework and require that all companies they do business with comply or lose membership. No exceptions.
Digital enables such a unique approach to marketing, in which we all leave our marks in the road for brands to anticipate our next move. That the marketing world is afforded the luxury to utilize so many of our online behaviors is a luxury. For example, our email conversations are used for message targeting, while few of us would want our phone conversations to be used for marketing purposes. These data targeting situations are great opportunities for brands to perfect their communications and for consumers to receive more relevant messages. It would be horrible if a few bad privacy practitioners ruin it for all.
The industry had better get this right, and fast. The reason the brewing Facebook backlash matters is because the audience isn't geeks and gearheads: the audience is average people.
Prediction: if the online privacy dam bursts it will unleash a tsunami on the entire direct marketing ecosystem, not just the digital piece.
"The industry had better get this right, and fast. The reason the brewing Facebook backlash matters is because the audience isn't geeks and gearheads: the audience is average people.
"Prediction: if the online privacy dam bursts it will unleash a tsunami on the entire direct marketing ecosystem, not just the digital piece. "
The tsunami has been already been unleashed. Between Facebook and Google, and the emerging location-based / mobile / gaming arenas, Blippy, Swipely, marketers' demand for more efficient message delivery and analytics and the *existing* privacy laws, I don't see any way to avoid a backlash. The Facebook brouhaha is the first wave of the tsunami. Assuming Facebook backs down to the Feds and the Europeans, it's then Google's turn.
My message as a technologist with ten years' experience in marketing and sales is, "We're moving back to the day when half of our advertising budget was wasted, but we didn't know which half."
That may not be the answer we want to hear, but when you actually look at the *costs* of
* gathering the data,
* cleaning the databases,
* storing the data,
* developing the sophisticated algorithms,
* building the huge IT infrastructures, and
* explaining everything in actionable terms to the C suite,
and *then* add overhead of dealing with privacy concerns, it's not a pretty sight.
Was not knowing which half was wasted all that bad? ;-)
Tom, your warning is right on target. The Boucher and Stearns bill covers offline data collection and usage, not just online.
Dave, you do really think a rogue collector cares whether they lose membership in any organization? It only takes one to completely ruin privacy for all citizens and all businesses. If self regulation is granted, it will only be a matter of time when the feds steps in to close all of the doors in order to close one.
And Ed, esoteric reasons aside, it wasn't and won't be that bad for more inductive and deductive reasoning for a buy than "absolute" metrics counting how many fairies dance on the head of a pin.