|How Marketers and Advertisers Deal with Data Privacy Issues|
|Tuesday, July 06 2010|
The notion of consumer choice involves the ability to track and modify consent over the disclosure of personal information. In last week’s blog, we discussed self- and government-imposed regulations. A major portion of these regulations relates to providing a system or a tool where users can provide consent on the use and/or sharing of their data to third parties, limit exposure from targeted advertising, and ultimately opt-out.
The implementation of these systems is further complicated by the rapid rise of social networking and mobile advertising. Within these newer channels, consumers may be sharing more aspects of their personal information than they realize. As a consequence, it is becoming increasingly difficult for consumers to control or even understand how their data is being used or shared for advertising. The same is true among marketers and advertisers. Ever-growing advertising networks have presented challenges in the implementation of even the most robust privacy policies. Facebook recently came under scrutiny for its privacy practices. According to The Wall Street Journal, Facebook and other social networking sites have been sharing users’ personal data with advertisers without consent. Furthermore, Facebook's privacy settings were deemed too complicated. Facebook has since addressed these issues and added easier-to-use privacy controls. These new privacy controls enable Facebook users to easily limit access to their accounts and turn off sharing to third-party services.
In another example, Apple recently introduced a new advertising option called “iAds” through its iPhone. This new platform, coupled with the iPhone OS 4.0 announcement, opens up new opportunities for personalized advertising. With the new platform, users will be able to share their data to receive more personalized advertisements while also restricting some use of their personal data. At the same time, however, it doesn’t appear that users can completely opt-out and avoid seeing the ads altogether.
Over the past few weeks during Tuesdays with Tukaiz, we have talked about maintaining the balance between honoring data privacy and providing targeted advertising. This is certainly a delicate balance, and the weight often tilts in favor of the advertisers. Nevertheless, an increasing number of companies are keeping privacy concerns at the forefronts of their minds. Whether self-imposed or regulated by the government, privacy regulations are being adopted. Many larger companies have even assembled staff teams that are dedicated to dealing with data security and privacy issues. The consequences of non-compliance can include loss of customers, legal repercussions (e.g., from Federal Trade Commission), and nightmarish public relations.
At the end of the day, data privacy is all about maintaining consumer trust. There are always some risks associated with sharing your personal information, even to a trusted party. Transparent privacy policies and an easy mechanism for opting out are important first steps in making customers more comfortable with sharing their personal information and accepting the associated risks doing so.