How to keep regulators from policing mobile marketing

By Giselle Tsirulnik

June 4, 2009

Self-regulation is key

What is it going to take to make sure that the mobile industry has good privacy systems in place? Panelists at the Mobile Marketing Association's Mobile Marketing Forum addressed just that.

According to the panel, the mobile industry needs to continue to act in a responsible way and self-police itself, otherwise regulators will have to step in.

"I cover all policies across mobile for Yahoo," said Deepti Rohatgi, policy director for Yahoo, Sunnyvale, CA. "In general, Yahoo's philosophy is about great services in a trusted environment and privacy is key for this.

"People won't use our services otherwise," she said. "Give users as much notice and choice as possible. That manifests itself in choice and control and how they want to share information."

Alan Chapell, president of Chapell & Associates, said that it is important to figure out and understand who owns any particular datastream.

Make consumers aware

When an ad is served, there is a data trail. Mr. Chapell's firm helps companies understand who owns that data. Does the WAP site own it? What are consumers' ownership rights?

These are the types of questions that marketers need to be asking themselves.

"The FTC and even regulators are starting to look at the mobile space," Mr. Chapell said. "The industry hasn't caught on to this yet."

Yahoo's Deepti Rohatgi

Mike Wehrs, president/CEO of the MMA, said that currently privacy isn't a problem within the industry, but it may be in the future.

Mr. Wehrs said the aim of the panel was to address and deal with the potential problem.

"What's it going take to make sure we have good systems in place?" Mr. Wehrs asked the audience. "We need to continue to act in responsible way self police."

According to Dorrian Porter, CEO of Mozes Inc., the mobile environment is not trusted by consumers yet.

Mr. Porter said it is important to explain the terms of service to the user and to have a privacy policy that clearly spells out what information is being collected on a user and the purpose for that information.

"Privacy is an important piece of the mobile ecosystem because trust and regulation are going to become challenging," he said. "It is important to navigate this issue now and not wait until regulators step in."

Mr. Porter also said that the mobile industry has an opportunity right now to look at the online space in terms of privacy, since there are a lot of lessons to be learned there.

Ms. Rohatgi said that Yahoo has a specific privacy policy for its mobile products.

"Conceptually when you think about privacy, provide notice in as many places as possible, in as many languages as possible," Mr. Chapell said. "Let consumers know the policy at the exact moment when a consumer is making a consent decision.

The FTC has made it very clear privacy policies are not good as the sole means of letting consumers know.

Also, the issues are exacerbated in mobile because of the small screen.

A typical privacy policy is long and users need to scroll a lot.

"You need to provide notice outside of this policy, like when you are serving targeted ads," Mr. Chapell said.

Mr. Porter said that most companies in the industry want to give consumers this information, because they want to avoid problems in this space.

"I was surprised of the amount of automobile ads I was getting when looking for cars a few months ago," Mr. Porter said. "Advertising networks are able to serve stuff that's relevant because of Internet behavior."

Apparently this has profound implications on privacy.

"The industry has a huge weight on its shoulders to take this seriously," Mr. Porter said.

According to Mr. Wehrs, the privacy policy and the information being collected on consumers depends on the ad being clicked or the service for which the consumer has registered.

"If an ad gets served up, your interaction with these ads could be tracked and used for future ads," Mr. Wehrs said. "The next time you get an ad it may be more targeted.

"But, marketers, don't become to invasive," he said.

Ms. Rohatgi said that companies need to consider whether consumers understand that when they click on an ad, this information can be used.

"Does the policy let them know this is happening?" she asked.

According to Mr. Chapell, there are a number of initiatives that let people know that the real estate on or around an ad allows third-parties to collect information.

"There are a bunch of companies combing information of ad networks and searching and browsing," Mr. Chapell said. "We are now at the industry's last clear chance to self-regulate until the FTC steps in.

"I think that if you are not getting that message clearly, you need to," he said.

Mr. Porter said that ads served to users are not just about what they click on, but where they browse, and what they read. This is concerning in the longer term.

"I personally think there will be technology solutions," Mr. Porter said. "I should be able to know what data anyone has on me and decide if they should continue to have this information."

Ms. Rohatgi said that there should be industry standards in place.

In response to a question from the audience, Mr. Wehrs said that because there haven't been any mobile privacy infringement stories in the national press, there aren't any huge problems in the space as of yet.

"A big problem hasn't occurred, otherwise regulation would be in place," Mr. Wehrs said.

Mr. Chapell agreed.

"Some large company is going have to get hardly thumped for the industry to learn its lesson," Mr. Chapell said.

Comments on "How to keep regulators from policing mobile marketing"

1. Howie Goldfarb says:

   June 4, 2009 at 9:55am

   This sounds like a securities industry discussion. And you can see how non-regulation turned out with derivatives working out in the wild. This is also a very dumb discussion.
   
   First of all mobile marketing should be regulated just like any other advertising medium. Why should it be unique. Within that framework there are unique characteristics that the industry claims that really aren't. Opt In is one. We all Opt In on every single type of advertising. We decide whether to watch a commercial, look at a bill board, etc. If ads can be pushed to my web browser then why not to my mobile browser. Software exists to block ads. I use it with Firefox.
   
   Spam laws should be enforced. Duh!
   And any advertising that crosses lines should be referred to the BBB as well as whatever enforcing body that can sanction fines and or criminal sanctions.
   
   In a utopian world we all behave civilly and respectfully. But in a capitalistic society that worships money instead of God like ours does then of course we will have bad apples that need to be punished.
   
   Better to create a division of the MMA that creates standards of behavior. That can oust businesses that don't behave. And a Federal Framework that protects the consumers and offers real penalties for misbehavior.
   
   So again why are you having this discussion?

2. Jeff Chester says:

   June 4, 2009 at 7:58am

   Sadly, it appears Mike Wehrs and the MMA are out of touch with what's going on in mobile marketing. The FTC now understands--as a result of the CDD/USPIRG mobile marketing complaint--that the industry's business model that combines behavioral targeting/profiling with location data poses both privacy and consumer protection concerns. Instead of acting in a state of denial, the mobile industry should work with consumer groups and the FTC to develop meaningful safeguards. At the top of the agenda should be special protections for children and adolescents, financial and health related services, and when targeting Hispanics and African Americans.