Obama’s Privacy Policy Might Be Bad for Marketers

During last week’s State of the Union address, President Obama outlined a plan to strengthen his Consumer Privacy Bill of Rights. While the move has made many marketers nervous, it comes as a boon to privacy advocates.

The president recently told the Federal Trade Commission (FTC) that the Bill of Rights would give consumers “the right to decide what personal data companies collect from them and how they use that data.” Recent years have been fraught with high-profile security breaches, like the Sony hacks, as well as privacy scandals, such as Facebook manipulating users’ news feeds. But many, like Mike Zaneis, executive vice president of public policy and general counsel for the Interactive Advertising Bureau (IAB), believe that tighter legislation around consumer privacy will only hurt marketers and derail efforts to legislate more pressing privacy concerns.

“Digital marketing and advertising especially would be in the crosshairs of this legislation,” says Zaneis. “We all know in the digital space that data really is the digital currency. So every website collects a certain amount of data. A consumer bill of rights will just suck all of the oxygen out of the debate around new privacy protections, and we’ll use momentum on some of these narrower bills that would really deliver new protections to consumers that would be supported by industries and by privacy advocates.”

Industry insiders worry that new legislation could put viewablity standards and data analytics at risk. “Marketers need to know whether their ad was viewable,” says Zaneis. “They need to know whether somebody clicked on ads to know whether their ad were as effective as possible, and a broad new privacy law would absolutely put all that at risk.”

But there are others who say that companies can’t be trusted to self-regulate when it comes to data and privacy. Frank Pasquale, professor of law at the University of Maryland School of Law, believes that the FTC should be given greater leeway when it comes to punishing brands for misusing data.

“People still have an expectation of privacy on social media,” says Pasquale. “For example I believe that the companies themselves and some of the trade associations have said ‘We’re not going to use your sensitive data in certain ways,’ yet Facebook has gotten in big trouble with the federal trade commission for effectively lying about certain practices that it promised to consumers and it didn’t live up to. Right now the FTC doesn’t have enough authority to actually impose a fine that hurts.”

Both privacy advocates and advertising industry experts agree that transparency is key to making consumers confident that brands will use data responsibly. According to Zaneis, “empowering consumers, educating them about how data is collected, and allowing them to exercise that control is the right way to approach consumer privacy.”

Ironically, Pasquale believes that a national database could help salve consumers’ data woes. “There should be a centralized clearinghouse of sensitive lists and sensitive attribution that notifies consumers when they’re put on sensitive lists,” says Pasquale. “So rather than having somebody dealing with going after thousands of data brokers individually and finding out what they have about them in their files, they would essentially be sent a notice if they wanted it.”

But for now, marketing industry insiders don’t feel ready to commit to a one-size-fits-all solution. “It’s not cut and dry, which is why adopting privacy legislation is very difficult because you can’t come in from a parochial perspective and just draw the line for everybody because you’re going to miss the mark no matter where you draw the line,” says Zaneis.

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