Fed Regulator Tells Marketers Be Careful with Data Collection

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

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

That point was driven home very gently yesterday as Jessica Rich, director of the bureau of consumer protection for the Federal Trade Commission, delivered a speech to the annual summit of the Digital Advertising Alliance. The speech contained plenty of plaudits, but also exhortations to "press forward" with self-regulatory efforts that will make it easy for consumers to opt-out of tracking and data collection entirely.

The Big Three


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

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

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

Another concern: Rich pointed to a recent FTC settlement over kids' apps that collected 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 with regards to children, finance, health and geolocation. The FTC has already pursued 53 settlements against companies like Microsoft, DSW, LifeLock and Rite-Aid to halt what it perceived as abuses.

Location-Based Concerns

Geolocation, which helps marketer target ads by tracking the exact location of consumers, can also show where people worship, what political groups they visit, the routes kids take to school and other information. "It's really our strong position that precise geolocation is sensitive information that requires opt-in consent because it can show so much about a person," said Rich.

Facing Realities

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

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

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

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

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

More, Please

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

"Keep working towards getting consumers what we believe they want -- an easy way to control unwanted tracking," she said. "This will require progress on two fronts: improvements to your existing Ad Choices program and also finding a way to accommodate the do-not-track signals that are now offered by the major browsers."

A minute later, she elaborated on the do-not-track browser options. "I know you're still working on finding a way to accommodate that. This is really important 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 of all 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 these changes, but Rich close with another reason. "Consumers want it."

Title image by Filipe Frazao / Shutterstock.com