Federal regulators want advertisers, publishers, retailers, information brokers, and ad technology companies to tighten up their consumer practices, giving consumers more notice and the ability to opt out of receiving targeted ads.
Sounds good in principle. But in practice, is it realistic?
By now, you should have read and re-read the 122-page Federal Trade Commission report, “Protecting Consumer Privacy in an Era of Rapid Change.” It calls on businesses to incorporate “substantive privacy protections” for collecting, managing, and storing consumer information and to give “reasonable access” to the consumer data they maintain.
Grabbing the most attention: the FTC staff’s recommendation to establish a “do-not-track” system for online behavioral advertising. But don’t get confused: this system may take its name from the FTC’s “do-not-call” registry, but any similiarities end there. First, the do-not-track system is not a registry. And, implementing a do-not-track system involves more complex technology and business issues than collecting a 10-digit telephone number and sharing it with telemarketing businesses.
After reading the FTC report, four quick observations:
- If technology got us into this mess in the first place, why can’t it get us out of it?
- Will businesses be forced to comply with tougher privacy standards, at whatever cost – just like what happened after Congress passed the Sarbanes-Oxley Act? That law, adopted after Enron collapsed, required companies to improve their financial reporting systems. The New York Society of CPAs estimated in 2004 that smaller to medium-sized businesses spent an average of $2 million in the first year to comply with the new auditing rules.
- Who gets to decide what’s tracked and what’s not tracked?
- Offline businesses that track consumer purchases, such as membership warehouses like Costco or grocery stores that offer loyalty cards, may become part of the privacy dragnet. In the past, discussion has typically focused on online businesses.
ClickZ’s Call to Action
As the debate over the FTC report continues, we’d like you to guide the conversation and discuss realistic ways that advertisers, publishers, and retailers can continue to serve consumers while respecting their privacy.
As we enter the new year, the editorial team at ClickZ has a call to action for you.
By Jan. 15, 2011, send us your comments about the FTC’s framework. 20.
We will review submissions and submit the most salient and informed points to the FTC. We hope to hear lots of different perspectives and will include them in our comment with the FTC.
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