• by Steve Smith , Staff Writer @popeyesm, September 13, 2011

Mobile apps have been such cute and cuddly little icon-ish things on our smartphones for the past few years, it may have been easy to forget that they are, after all, media. Like questionable TV infomercials and dastardly Web sites, apps can be bad actors, too.

From the opening of the Android Marketplace, I have been astonished how "open platform" was taken as open season on branded media. The number of "shortcut" apps that hijacked major publishing brands was daunting -- to the point where it was hard to find the official media app among all of the pirates.

I'm not surprised that high-profile content providers have been slow to enter the Marketplace. Until recently, it looked pretty much like a Southeast Asian bazaar of knock-offs in there.  Turns out that while the gatekeepers at Apple were keeping breasts and bums out of the App Store, they weren't necessarily catching the occasional snake-oil salesman.  

The potential for bad apps was underscored yesterday when the Federal Trade Commission started settling its first major move against mobile app makers. In two cases involving apps in the iOS and Android stores that promised to cure acne, the FTC forced their makers to end the baseless claims. Both "AcneApp" and "Acne Pwner"  asserted that holding the phone to one's affected area while the app flashed colored lights at it would treat the skin condition. One of the apps erroneously cited evidence of the technique working in the Journal of Dermatology. For both apps there were thousands of downloads, 3,300 of AcnePwner at 99 cents in Android Marketplace and 11,000 for AcneApp in iTunes for $1.99.

By issuing an "administrative complaint, the FTC drew a settlement of $14,294 from the makers of AcneApp and $1,700 from Acne Pwner. FTC Chair Jon Leibowitz couldn't resist playing with the familiar iOS cliché and said in his statement, "Smartphones make our lives easier in countless ways, but unfortunately when it comes to curing acne, there's no app for that."  

Let this be the first warning shot that the FTC is starting to pay attention to mobile. In fact I was speaking recently with Scott Meyer, CEO of the privacy solutions provider Evidon, who confirmed that when FTC Director of the Bureau of Consumer Protection David Vladeck spoke at the Evidon's partners' conference, he made it clear "mobile is very important to them."

Evidon is one of several groups helping to implement the "Advertising Options" icon on behaviorally targeted ads that is supposed to save the ad industry from agency regulation. When users click through on the ion, they get to see who is tracking them, and are provided with an explanation of behavioral targeting and an opt-out option.

The IAB recently required all of its members to comply with a series of self-regulatory guidelines that includes these kinds of visible user notifications. Meyer tells me Evidon just launched a mobile iteration of the program, but there are multiple challenges to bringing the Web system to mobile. Ad networks are reaching across app platforms that tag a user through UDIDs, while the Web browsers on smartphones work more like those on the Web. Moreover, the size of the mobile display makes adding an actionable icon to an already tiny display unit nigh impossible.

It's hard to overstate the importance of this industry getting ahead of the curve on the issue of privacy. In a spring survey of consumers by TRUSTe and Harris Interactive, 98% of mobile users said they wanted better controls over how their personal information is collected on devices.

Control is the key word here. While Web advertisers and publishers use the term routinely to refer to the tools they are providing with Web opt-outs and such, the word takes on special meaning on the handset. I would argue that the relationship between user and information on mobile is different from the one we encounter on the desktop. On a standard Web browser we go "out onto the Web" as if into a terrain defined and built by others. On a handset the feeling is different -- the activities are highly personalized on every level.

Control takes on a heightened sense of urgency here. But so, too, does the opportunity for galvanizing a better relationship with the customer on this platform. For too long, too many Web marketers and publishers hid from the privacy and data collection issue online. They seemed to fear than any opportunity for a user to opt out would be taken, and then their addressable audience would dwindle. Yet In general opt-outs have been remarkably low so far for most of the online ad notification systems. Arguably this may be a function of visibility, but even when people click through on the ad options icon, they rarely opt out of targeting.

I think privacy and data control are arenas where the marketer and publisher can establish deeper trust with users on a mobile platform. We need to find ways to push the issue forward and demonstrate a collaborative spirit with users, helping them understand how data is collected and used and how they can manage this process. Simple, upfront privacy policies should be de rigueur in apps and mobile websites. And publishers should encourage their users to consult the policies. Even before the technologies are in place to make opt-outs easy across the many platforms, apps, sites and brands need to acknowledge the heightened sensitivity mobile users do -- and should -- have about their data on these platforms.