DMN3 Blog

On December 1^st, the Federal Trade Commission (FTC) issued a report that proposes a new framework to protect consumer privacy. It seeks to provide safeguards concerning the commercial use of data obtained from consumers' online and offline behaviors. If you are a marketing professional, you should know what they are proposing.

Because of the advancement of technology, we live in a world that allows vast amounts of consumer data to be collected, combined, analyzed, used and shared instantaneously. For marketing and advertising purposes, this ability to collect and combine data from a variety of sources allows for better targeting and segmentation of marketing and advertising campaigns.

The problem for the FTC is that the process goes on in a way that is invisible to consumers. In most cases, consumers are unaware that third parties are collecting and sharing:

• Your activities online, including searches, websites visited, content viewed over time, your computer’s location and IP address
• The information you and your friends post on social networking sites and keywords in your email when using “free” email applications
• Your location when using location-enabled smartphone applications
• When and what you buy when using loyalty cards and coupons
• What you bought and the information you provided when you submitted your product warranty information

The FTC is concerned that many companies don’t disclose that they are collecting and sharing consumer data. Even when companies are disclosing their practices, they do so in long, incomprehensible privacy policies and user agreements that are not read, let alone understood.

The FTC cites the case of a company that sold software to monitor children’s online activities. The FTC said that providing a hint to parents in a vague statement buried 30 paragraphs deep in the end user agreement that it also sold information about the kids’ online activities to third-party marketers was not adequate disclosure.

There have been good efforts at self-regulation by advertising industry trade groups working through the Interactive Advertising Bureau (iab). Their efforts are described in my previous postings on this subject listed below.

Unfortunately, the FTC believes that, despite such best efforts by good companies and trade groups, self-regulation of privacy is not working adequately to protect American consumers.

I’ve written a number of posts on the issue of online behavioral tracking and targeting and the efforts of the advertising industry to self regulate itself on privacy issues. Reading them will give you a perspective of what has been happening at the industry and federal level to regulate the collection, storage and sharing of consumer data.

Do You Know How Americans Feel About Behavioral Targeting

FTC Staff Report: Self Regulatory Principles for Online Behavioral Advertising

Self-Regulatory Principles for Online Behavioral Advertising

Online Tracking Regulations to Take Effect Next Year

Online Advertising: New Consumer Alert Icon for Behavioral Advertising

Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers, is meant to guide businesses as they develop “best practices” and to guide Congress as it develops legislation on privacy issues.

The report is preliminary at this point and the FTC is seeking input from interested parties during December and January before issuing its final report on this subject. You can view the full report here.

The report proposes three main approaches to protect and enhance consumer privacy. They are:

1. Data security and Accuracy
2. Consumer Choice or "Do Not Track"
3. Improved Transparency

In my next post I will describe the three approaches in more detail. Until then...Happy Holiday Marketing!