Questions for Trevor Hughes

Trevor Hughes is the privacy expert’s privacy expert.

As head of the Network Advertising Initiative (NAI), the E-mail Service Provider Coalition (ESPC) and the International Association of Privacy Professionals (IAPP), Hughes is the voice of authority in online privacy and consumer trust in interactive advertising.

A steady, moderate voice in the digital marketing space, Hughes comments have turned more gloomy of late. He believes consumer trust is eroding — has eroded more than most advertisers realize, in fact. He thinks the industry has failed to act decisively to shore up the human and technological foundations of their businesses.

There are bright spots. Legislation has been and continues to be an important tool, he says. But in two other crucial areas, best practices and consumer education, Hughes gives marketers poor marks.

British-born, Canadian-bred Hughes recently took time to speak with ClickZ about his influence on U.S. privacy policy, the looming crisis of consumer trust, and the small town in Maine that houses it all.

Q.What are the key issues in consumer privacy around advertising right now? What do brands need to understand about privacy that perhaps wasn’t apparent a year ago?

A.I think there is a growing crisis of consumer trust in many interactive channels, and that is in many cases driven by advertising practices. Most recently, we saw a Pew Internet study that suggested consumers are in some cases shying away from Web sites and, even worse, away from e-commerce because of concerns regarding fraud, identity theft and spyware. Those types of studies are a clarion call for businesses to look at their practices, look at the marketplace, and ask some very tough questions about consumer privacy with regard to trust.

While I don’t think these are new concerns, they are reaching a level where they’re hitting senior executives radar, because they’re having some real consequences in the marketplace.

Q.To what degree can legislation help mitigate those concerns?

A.It’s important to note that legislation is only one tool in our responses to various threats. With regard to spam, legislation was an important tool to give us some important guidance [for] what was on-side and what was off-side in regard to marketing. Likewise, legislation can offer tools for enforcement. That helps create a deterrent effect so that other fraudsters, other spammers, don’t get into that line of business. It’s only a tool, it’s not the tool.

We generally see this parallel in consumer privacy. At the end of the day, there are probably four broad categories of tools that need to be engaged. One is legislation. Two is best practices. If something has risen to the level where legislators want to legislate, it’s time for industry to meet and discuss practices.

Technology is almost always a third. If industry doesn’t [restrain itself], very frequently consumers will turn to technology that switches legitimate businesses off. Think of spammers. It’s just now that we’re starting to drive things like authentication and reputation engines into email. In the absence of those tools, consumers turned to tools like blacklists that created problems for legitimate business. Anti-spyware tools create pretty clear problems for legitimate technologies. If you look at the proliferation of pop-ups, there wasn’t much effort at all to constrain their use online. Now, pretty much everybody that’s online has a pop-up blocker. If companies do not embrace technology, consumers will do it for them. That’s a bad result.

Fourth is consumer education. [Interactive stakeholders] have done a terrible job of this.

Q.What came out of the email authentication summit two weeks ago?

A.The most exciting thing for me was that we have turned the corner from discussing authentication as a theoretical idea that made sense and we could rally behind to broad implementation. We had almost 500 people at the summit. They were wrapping their heads around how to implement this so as to make the entire ecosystem of email better for everyone. We’ve gone from the theoretical to the quite practical.

Q. How you get into privacy and online marketing?

A.I’m a lawyer. I was born in England and raised in Canada. I went to the University of Maine and started working for a large insurance company. As I graduated, the person responsible for the advertising and marketing department was moving on. I was handed the [position]. That was the mid-’90s.

I was recruited from there to Engage, which was one of the high-flying Internet ad networks. I was head of privacy and corporate council. After the downturn hit and things were slowing down at Engage, I was offered a position with the trade association we belonged to, the Network Advertising Initiative. That was four years ago. Also, about three years ago I picked up a role as executive director of the IAPP. Not many kids say they want to be a privacy professional when they grow up!

Q.It’s a bit strange, isn’t it, you being foreign born and shaping all this U.S. policy stuff?

A.I never even look at it that way.

Q.What lessons did you learn about online privacy from your days at Engage?

A.Engage really didn’t have many privacy troubles at all… While there was significant heat and energy around the online advertising industry, five years ago Engage really managed to not get singed in that process for several factors. One was a strong commitment to addressing privacy issues in their products and programs.

Q. Do you see that level of commitment now?

A.There are some clear examples of companies that are doing it right today, that are clearly committed to understanding privacy issues. Pretty much every company has a privacy policy. In fact, they have to according to some California law.

Some firms, instead of drafting a policy from inside out, look at consumer perceptions and write the policy from outside in. Those organizations that are merely responding to compliance issues are missing a real opportunity to build trust and greater consumer stickiness to their brand.

Q.Do you see a risk from over-use of behavioral targeting?

A.Like many things, it needs to be balanced. One clear concern is ad impression inundation. The number of ad impressions per day has gone up exponentially, and will [continue to] over the next several years. Publishers need to recognize what draws people to their properties and balance the content with their need to monetize it. When they get it wrong, consumers start to [use] things like pop-up blockers. And we’re staring to see banner blockers. That breaks the unstated quid pro quo of publishing.

Q.What’s the atmosphere like in your Maine offices? What’s the town like?

A.York, Maine is a quintessential New England coastal town, with a church and some very old buildings from the 1600s and 1700s. Our offices are in a white Federal building across the street from the fire [house].

We work on very interesting national and international issues, but we do it in York, Maine. On the other hand, we’re just 50 minutes north of Boston. The fact that we’re in York is somewhat invisible to people. Or, if they think of it, it’s somewhat irrelevant.

I like to think that the work you do is much more important than where you do it.

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