There have been mutterings and rumblings about a Do Not Track registry from the Federal Trade Commission modeled on the Do Not Call list that would affect the mobile advertising space.

The no-track list will affect primarily online and direct marketing ? in other words, display advertising, email marketing, direct mail, search marketing, affiliate marketing and contextual marketing. While this will affect the traditional Web, the laws will likely apply equally to mobile.

?Assuming it is written with mobile in mind, it would mean that advertisers using the mobile channel would also have to comply, adding a new layer of decision-making for who does and who does not get served an ad,? said Neil Strother, Kirkland, WA-based practice director of ABI Research.

Mobile Web display
If a Do Not Track list was passed, it would apply to mobile display advertising that is based on behavior.

The mobile industry has not reached the sophistication of the online world in that area mainly due to the inability to cookie sites and visits to mobile sites.

But better browsers and enhanced software may change that on mobile devices.

?Just because the mobile Web is less mature than online, don?t expect the industry to escape regulation, should something actually get passed,? Mr. Strother said.

According to Amanda G. Watlington, owner of Searching for Profit, Boston, the proposed registry is based on preferences stored in a browser plug-in.

The mobile browser developers would need to build these plug-ins and install them for their browsers before any impact would be felt. This may take awhile.

Eduard Goodman, chief privacy officer of Identity Theft 911, Phoenix, an ID theft prevention and recovery service, said that the differences and boundaries between mobile devices and computers is starting to dissolve anyway.

?And, so I think that this will definitely have an affect on mobile advertising if it comes to pass,? Mr. Goodman said.

For instance, what is an iPad with 3G connectivity?  Is it a mobile device or a computer? 

What about a laptop with a Verizon broadband card, which connects using a small ?cellular? device? 

Also, what about a mobile device connecting to the Internet using a WiFi connection rather than the 3G network to save data plan minutes?  

?I think that the mobile advertising market and online advertising market are in essence going to be one and the same as the devices merge, and as this happens, a Do-Not-Track registry will definitely affect mobile advertising and marketing in the long term, if not the short term,? Mr. Goodman said. 

In-application
With in-application advertising, consumer behavior is more easily tracked and monitored. So a potential list would affect in-application advertising. 

Mr. Strother expects that in-application advertising will be included in any laws passed, since lawmakers tend to cast as wide a net as possible when coming up with new rules.

But not everyone shares his opinion. 

?Since an app is opt-in already, then it begs the question of whether the user has already proffered permission," Ms. Watlington said.

?The user could be viewed as having given permission when purchasing or downloading the app,? she said. ?It will be incumbent on the user to read and understand terms and conditions on apps to understand what is being collected.?

However, this is not a very likely scenario.

The Internet is global, so there are issues around stopping servers in another country from tracking.

Also, how does the average consumer even know when they are being tracked? 

How would it be enforced? 

As long as clear consent to the in-application tracking and advertising s given by consumers, there is no actual need for signing up for the Do Not Track registry. 

SMS
It is questionable whether SMS will fall under the purview of a potential list.

SMS is completely double-opt-in, so consumers are aware and willingly making the decision to sign onto lists.

?It?s quite possible that SMS and presumably MMS will be left alone, because of the opt-in process,? ABI's Mr. Strother said. ?This is one area where the industry would have a strong argument against further regulation, since the consumer makes the conscious choice to engage with a company via SMS.

?Plus the opt-out process is very clear and easy to accomplish,? he said.

Mr. Goodman agreed that SMS is safe from the no-track list since clear, unambiguous consumer consent is the aim of the FTC's game.

If a consumer really wants to be tracked, target marketed to, offered coupons or exclusive discounts and are alright with the tradeoffs from a privacy and tracking perspective they should have the option to opt-in to programs like this. 

Safe and sound?
In the past, online laws have been applied to mobile.

But in this case, mobile?s lag behind online may spare it the worst effects of the list.

The lack of whatever little tracking there is in mobile will stunt the development of targeted offers and lead to ads that just do not make sense to the consumer, be they via mobile Web display ads, rich media ads, mobile video and television spots, and in-application advertising.

And, let?s not forget social media services such as Foursquare, Gowalla, Facebook and MocoSpace. They all depend on user behavior to determine their service?s efficacy and effectiveness.

Is contextual advertising on those services are also being threatened?

?These mobile social media services will likely escape regulation, since they operate on an opt-in basis and the user generally accepts the notion that by checking in at a location means you are open to various forms of advertising,? Mr. Strother said. ?Again, similar to SMS, the industry has a fairly strong argument that the tracking here is acceptable to consumers.

?But these companies will likely come under consideration by regulators and will have to demonstrate that the tracking respects user privacy in both theory and practice,? he said.

Online applies to mobile
Just as with the proposed self-regulatory guidelines and draft legislation, current laws applicable to traditional Internet advertisers are also applicable to mobile marketers, according to Christopher M. Loeffler, an attorney at Kelley Drye & Warren LLP, Washington.

Many mobile devices access the same Web sites available through a computer, and there is no exception for mobile-focused URLs. 

Yet the somewhat nascent stage of mobile marketing could help mobile marketers avoid some of the more rigorous applications of a Do Not Track registry. 

?The scope of such a registry has not yet been revealed, but to date the FTC has focused on the collection of a consumer's personal information across multiple unrelated sites,? Mr. Loeffler said. ?Personal information collected by a single publisher and contextual advertising has been excluded. 

?It remains to be seen whether a Do Not Track registry would also include the same exclusions,? he said. ?Given mobile devices' currently limited use of cookies, aspects of a Do Not Track registry may either be inapplicable or not technologically compatible with some types of mobile marketing. 

?Of course, this may change as the sophistication of mobile devices increases and the space between a computer and a mobile phone becomes filled.?

Andy Lustigman, principal attorney at The Lustigman Firm, New York, said that for marketers, the restrictions on mobile advertising are greater than in other channels.

To date, the traditional advertising laws have applied to mobile, with the challenge being how to provide the necessary disclosures given the small screen space. 

For example, if increased privacy disclosures are required, how will marketers be able to provide them to consumers so that they can make choice that accurately reflects their intentions?     

In addition to traditional advertising laws, the CAN-SPAM Act expressly applies to mobile solicitations, restricting them unless there is prior express consent, which is contrary to the traditional notice and opt-out standard applicable to email marketing. 

Why the privacy concerns?
Regulators have been addressing online privacy issues for more than a decade, but more recent advances in technology have drawn specific attention to behavioral advertising. 

Regulators are keenly aware of the benefits provided by effective online advertising, including the ability of advertising to subsidize the free content that consumers enjoy. 

The recent focus on behavioral advertising stems from marketers' ability to obtain information about consumers from a variety of online sites, and the perceived lack of transparency and control given to consumers over this information collection and sharing.

Americans increasingly rely on the Internet to conduct their affairs. The issue is around whether too much data is being collected about them. 

While most recognize the benefits of having targeted advertising, there is concern that every activity one engages in is being tracked and profiled.    
 
?If a Do Not Track registry is created, mobile marketers and Internet marketers will both face the same challenge,? Mr. Loeffler said. ?Without some level of information about the consumer, it is difficult to deliver a marketing message that is tailored to the consumer's interests, regardless of the vehicle or specific type of ad used.

?Consumers would have to choose between sharing some personal information in order to receive ads that correspond with their interests, and receiving more general ads.?

How do consumer privacy advocates feel?

Jeff Chester, executive director of the Center for Digital Democracy, Washington, said:

We believe a do-not-track list has to include mobile devices.  As the CDD/USPIRG mobile marketing complaint to the FTC made clear, the mobile marketing industry has embraced the combination of behavioral targeting and location as the foundation of its business model. 

We imagine that a consumer will place their mobile number or the identifying mobile serial number in the FTC register that will be created. 

They could not be targeted/retargeted for behavioral related ads. 

They would also have the ability to expect that some form of mobile ad preference manager would allow them to effectively control what data can be collected and used for targeting, including the permissible marketing categories. 

Mobile marketing and the privacy concerns are dramatically growing, such as the increasing use of mobile coupons and other location targeting services. 

The FTC has created a mobile marketing lab to investigate how mobile marketing is being conducted.  We expect the FTC to address mobile marketing privacy issues as its research work continues, including in its forthcoming new privacy recommendation report scheduled for the fall.  

The growth of in-app advertising, plus the consolidation of the marketplace through recent Google and Apple acquisitions, allow for greater tracking and targeting on mobile platforms. 

Better safeguards are also needed for SMS, where the so-called double-opt-in we believe fails to provide consumers with relevant information on the data collection process with mobile. 

Mobile social media services should especially be required to have data collection policies that enable the user to have full control over how their data is collected and used. 

When it comes to sensitive applications on mobile involving finance and health, more stringent safeguards are necessary.