Is FTC?s Do Not Track proposal a solution chasing a problem?
If the Federal Trade Commission?s proposed Do Not Track mechanism becomes a reality, mobile marketers will suffer loss of business and consumers will be bombarded with spray-and-pray ads that are not behaviorally targeted.
The FTC said on Wednesday that consumers should be allowed to choose whether or not to allow the collection of data regarding their online searching and browsing activities. Since mobile search and in-application advertising depend on the behavior of consumers to serve up relevant ads, both channels would be in real danger.
?Technological and business ingenuity have spawned a whole new online culture and vocabulary ? email, IMs, apps and blogs ? that consumers have come to expect and enjoy,? said Jon Leibowitz, chairman of the FTC, Washington, in a statement.
?The FTC wants to help ensure that the growing, changing, thriving information marketplace is built on a framework that promotes privacy, transparency, business innovation and consumer choice,? he said.
?We believe that?s what most Americans want as well.?
Evidence of consumer angst?
Although the statement sounds like a caring attempt on the part of the watchdog, many would argue that this privacy report put out by the FTC was never warranted in the first place.
When was the last time consumers complained about the way online companies use their behavior to target relevant ads to them?
There has not been any news coverage on the matter because, frankly, consumers do not understand the concept of targeting.
Taking behavioral data out of the targeting parameters will not put an end to online and mobile advertising. Instead, marketers will be serving untargeted ads blindly in hopes that consumers will click.
Consumers will be bombarded with ads, some relevant and others completely irrelevant.
Safeguards already in place
What is more frustrating about the Do Not Track mechanism is that it already exists in theory.
For example, Google simplified its privacy policies a year ago. The company has also made it easier for consumers to control the tracking settings through its privacy tools.
Google also explains its privacy approach in plain language and through YouTube videos in its dedicated privacy center.
Additionally, Microsoft?s latest version of its browser, Internet Explorer 8, lets consumers browse the Web without being tracked with features such as InPrivate Browsing and InPrivate Filtering.
When it comes to teens and kids, there are a myriad of control options in the form of software that is available to parents.
The saddest part of this entire Do Not Track mechanism is that if one was prominently displayed at the top of consumers? browsers, people would likely click to opt-out, without fully understanding the repercussions.
Opting out means that a girl who is 18 years old and searching for horoscope information on the Web may be served ads for Viagra. Sound familiar? The entire online and mobile advertising space would turn into unwanted solicitations likely to be perceived as spam.
The CAN-SPAM Act and Do Not Call registry actually served a purpose and protected consumers. In these cases ? emails and landline phone calls ? consumers were actually being interrupted and it was annoying.
?The Do Not Call list has been a big hit because people got so annoyed by telemarketers, and so Do Not Track could be seen in the same light, and would likely appeal to many people,? said Neil Strother, Kirkland, WA-based mobile practice director at ABI Research.
?So the FTC will have to balance two big forces: the needs of marketers and the privacy concerns of consumers,? he said. ?My guess is that some form of regulation along these lines is coming.?
Telemarketing and spam added absolutely no value to consumers? lives, while behavioral targeting online and on mobile ensures that the 18-year-old girl is actually receiving relevant ads.
Tracking technology ensures that Internet, mobile application, and online and mobile search users are being served ads that are targeted and therefore add value to consumers.
If a user is searching for car rentals in New York, receiving an advertisement for 20 percent off of Zip Car rentals is definitely an added value.
The Interactive Advertising Bureau believes there are significant problems inherent in creating a new government program around Do Not Track.
"Though a Do Not Track list might resonate with the public because of its apparent resemblance to the national Do Not Call registry, the two are similar in name only," said Mike Zaneis, senior vice president of public policy at the IAB, Washington. "Any notion that an online Do Not Track list could operate like the Do Not Call Registry is fundamentally flawed.
"Phone calls consist of one-to-one connections and are easily managed because each phone is identified by a consistent phone number," he said. "In contrast, the Internet is comprised of millions of interconnected Web sites, networks and computers?a literal ecosystem, all built upon the flow of different types of data."
Mr. Zaneis said that to create a Do Not Track program would require reengineering the Internet?s architecture.
Consumers depend upon sharing of data within this architecture to customize news sites, optimize Web services such as social networks, and receive relevant content and advertising across the Web, both on mobile and on PCs.
"Do Not Track is a misnomer because you cannot turn off data sharing online and, if you could, consumers would encounter a severely diminished experience since they would lose out on the remarkable benefits provided by data sharing," Mr. Zaneis said.
"Policy makers should not promise a consumer protection program they cannot deliver without disenfranchising the American public," he said.
Which channel benefits from a Do Not Track registry?
One man?s misfortune is another?s success.
The same holds true in this situation.
Should the Do Not Track mechanism become a reality, SMS will continue to prosper.
SMS is opt-in and therefore the rules would not apply.
Additionally, the fact that mobile in-application ads and mobile search would not be as targeted, might mean that more companies opt for SMS marketing.
"The FTC seems to place great emphasis on consumer click-through rates as a measure for whether self-regulation is working," Mr. Zaneis said.
"We believe consumers are best served by a system that makes them aware of online behavioral advertising practices, provides real-time enhanced notice and empowers them to exercise an opt-out mechanism that is easy to use," he said.
"Opt-out rates are not an accurate indicator of self-regulatory success, and the government should not be in the business of pushing consumers to opt out of online behavioral advertising."
Here is what a key privacy advocate and some key industry players think of the Do Not Track proposal:
Jeff Chester, executive director of the Center for Digital Democracy, Washington
Protecting mobile privacy is high on the FTC's agenda.
The agency recognizes that new safeguards are needed to address mobile and location marketing and data collection.
Do Not Track will also apply to mobile phones and other portable devices.
Consumers will expect to receive mobile services without data collection for tracking and ad targeting.
Mobile app developers and operators will have to do a better job protecting location-based privacy.
The industry can make the mobile environment a compelling one for marketing which simultaneously respects privacy.
The mobile industry needs to provide consumers with easy and effective tools that give them control over how their data is collected and used.
Eric Litman, CEO of Medialets, New York
Consumer control over their own personal data is an important component of a successful digital advertising economy. It remains to be seen whether or not this particular initiative works to the betterment of anyone.
Brennan Hayden, vice president at WDA Mobile Marketing, East Lansing, MI
You have an interesting dichotomy here between mobile and online.
Most of the big names online are new companies in the last twenty years.
In mobile, almost all of the phone companies trace their roots to the old Bell System, which was a public utility.
They also essentially lease the airwaves from the government.
For both of these reasons, I believe you see mobile carriers more sensitized and adept in dealing with the FTC?s issues.
I trust the process to treat mobile differently where it deserves to be treated differently. And, I think mobile does deserve to be treated differently.
If this proposal goes through ? and I doubt it will in any aggressive, disruptive way ? it will only make things better for the consumer.
The advertising industry is in for a rough go of it if we assume we are trusted significantly more than government regulators.
We are simply seen as having less power over people, and therefore less threatening. To the extent advertisers become seen as having power over people, people will clamor for regulation.
This proposal is definitely aggressive, but much less so than the product roll-out deliberations of Google, Facebook, and just about every Internet company on the planet.
I personally will watch the dialogue play out a bit more before I jump to criticize the proposal.
Dave Gwozdz, CEO of Mojiva, New York
We wouldn't go as far as saying there is an absolute need for this type of mechanism, but there needs to be safeguards in place to make sure consumers are protected and informed about how their data is being used by marketers. If we achieve this balance, consumers will be happy about the relevancy of marketing messages sent to them, and advertisers will be able to find happy customers.
This type of widespread mechanism could harm the effectiveness for in-app ads. Without knowledge of consumers' interests, marketers will have a difficult time fine tuning messages to potential customers.
The FTC is right in trying to ensure the safety and protection of consumer privacy. As a marketing technology company, we want to make sure that we are providing information that consumers want, and that consumers are fine with sharing certain pieces of data on themselves in exchange for a better online and mobile experience.
As long as the industry is privacy compliant, and so far it has and will continue to be, that some form of targeting is essential to allow marketers the ability to provide more relevant offers. ( I.e geo relevant offers) and allows for free content which otherwise would need to be paid for by users.
Final take
Mickey Alam Khan is editor in chief of Mobile Marketer
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