February 1st was a big day for the Federal Trade Commission (FTC). Not only did the FTC release its report regarding mobile privacy disclosures, it also announced that it had reached a settlement with Path, a social networking app, which agreed to pay $800,000 to settle charges that it deceived users by collecting personal information from their mobile address books without their knowledge and consent, and that it collected personal information from children without their parents’ consent in violation of the Children’s Online Privacy Protection Act (COPPA).

The FTC’s report entitled “Mobile Privacy Disclosures: Building Trust Through Transparency” provides specific recommendations on improving mobile privacy disclosures for mobile platforms, app developers, advertising networks, and other third parties. Most notably, the report recommends that mobile platforms provide “just-in-time” disclosures to consumers and obtain their affirmative consent before allowing apps to access sensitive content, such as geolocation data. The report also recommends that mobile platforms consider providing “just-in-time” disclosures and obtain affirmative consent for other sensitive content, such as contacts, photos, calendar entries and audio/video content. The report further recommends that mobile platforms consider developing a one-stop “dashboard” approach to allow consumers to review the types of content accessed by the apps they have downloaded as well as icons to depict the transmission of user data. The report recommends that mobile platforms consider offering a Do Not Track (DNT) mechanism for smartphone users and makes several other recommendations aimed at providing better disclosures to consumers regarding mobile privacy.

The report also makes a number of recommendations to app developers, including that they have a privacy policy that is easily accessible through the app stores, provide “just-in-time” disclosures and obtain affirmative consent before collecting and sharing sensitive information, improve coordination and communication with ad networks and other third parties and participate in self-regulatory programs and industry organizations. In addition, the report recommends that advertising networks and other third parties communicate with app developers so that those developers can provide truthful disclosures and work with platforms to ensure effective implementation of DNT. Finally, the report suggests that app developer trade associations, academics and experts develop short-form disclosures for app developers, promote standardized app developer privacy policies and educate app developers on privacy issues.Continue Reading FTC Announces Mobile Privacy Disclosure Guidelines

Cash and credit and debit cards are certainly dominant in the payment space today.  Some think change will never happen, but they are dead wrong.  Mobile payment is in its infancy, but the benefits are clear:  simplicity, convenience, relevance, and targeted offers and rewards.  No more wallets with multiple cards, just one device.  And this is only the beginning. 

Consumers and retailers are eager to participate.  Starbucks – a market leader – already offers a popular payment app.  It has now moved further into mobile payments by partnering with Square to allow mobile payment at all of its 7,000 U.S. stores.  Customers may soon even be able to pay with their phones while they’re still in their pockets.  With Square, a cashier can see your photo as you approach the register, and you complete the purchase by stating your name. Continue Reading Are Mobile Payment Apps the Next Big Thing?

Data, data, data.  Advertising Week was buzzing with chatter about data – its importance for the advertising industry, future implications, how to improve and maximize data, privacy and security issues… The list goes on.  So it was only appropriate for Ogilvy & Mather North America Chief Creative Officer Steve Simpson’s keynote address at the National Advertising Division’s annual conference on Monday of Advertising Week to be focused on big data.  Adweek reporter Katy Bachman put it well in summing up the key takeaway from Steve’s address: “In the age of big data, advertisers need to get their act together when it comes to online privacy.”

The Way I See It

  • I see a boom in online behavioral advertising and interest-based advertising, which has given rise to the need for stricter consumer data protection standards for the industry.
  • I see a number of challenges and potential pitfalls that advertising agencies and brands need to be cautious of in order to be able to reap the benefits of all of the data that is becoming available.
  • I see the need for increased transparency across the industry in order to educate consumers about privacy policies and the data that is being collected from them.

The Way the Industry Sees It

I had the pleasure of speaking with Steve Simpson, Ogilvy & Mather North America Chief Creative Officer, after Advertising Week to further discuss his NAD keynote address and his thoughts on data, privacy, creative, and more.

During your keynote, you said that this is a “massive creative issue.” Can you elaborate on this point? What steps should the advertising industry take to address this creative issue?

For marketers, privacy is an ethical issue, it’s a legal and regulatory issue, but it’s also a respect issue. This is to say, the new issues are the old issues.  It could be argued that the old days of one-way communication didn’t respect the consumer in the broadness of the messaging or bluntness of the media.  It intruded on your time with messages for products or services in which you often had no interest and for which you had no use. But the difference was the consumer knew what was what: the rules of the game were well known, transparent, and pretty much invariable.  The message was honest about its intent and succeeded by the power of its proposition or the force of its charm.  And when you turned the TV off, the TV didn’t rise from its stand, follow you about, and note all your doings.  It stayed shut off, because the “off” switch was a simple unambiguous technological act: “off” meant “off,” it didn’t mean “not apparently on, but watching you all day to see how you like it.”  While many in the industry declare with dewy eyes and a catch in the voice that the “consumer is now in control,” they are telling only half of the truth.  Because while the consumer can with high dudgeon tell a company exactly how to make a product better according to his own exacting personal standards—“Who’s in control now, you corporate hacks!!!!”—ending his tweet or review with a flurry of exclamation points, and moves on—he doesn’t move on, because the company he’s engaged isn’t ready to move on from him, but is only beginning to track him relentlessly in return for his “valuable inputs and collaboration.”

You said that if an advertiser is not respectful of its consumers’ privacy concerns that the job to be done by advertising, and the role of the creative director for that account, is very difficult.  Can you explain what you mean?

If consumers feel that marketers have relied solely on technology to track and target them, without openness and transparency, or without their knowledge or consent, then we have put the consumer into a state of alarm, resentment and even active resistance to our message.  Hence, the “massive creative issue.” What kind of ad can we create that is so wonderful it can overcome this?  Dear consumer, you feel violated—ready for a funny ad?

Continue Reading Data: A Creative Director’s Perspective

On Thursday during Advertising Week in New York City, I hosted an event called “Mission Impossible: Truth & Privacy – The Future is Now,” featuring Commissioner Julie Brill of the Federal Trade Commission, along with Frank Abagnale, one of the world’s foremost authorities on fraud and identity theft (you may know him best from the film Catch Me If You Can – he was portrayed by none other than Leonardo DiCaprio), and Jonathan Salem Baskin, Co-Author of Tell The Truth. Privacy is an issue everyone is talking about these days, and I wanted to share with you some of the thoughts and issues discussed during the session at Advertising Week. Click here to view a video of Ron’s conversation with FTC Commissioner Julie Brill.

Advertising is a fascinating and complex industry, reflecting the latest innovations, the newest technologies, and, of course, the height of creativity. Advertising is a reflection of the fundamental changes sweeping our society – the transformative effect of digital, the changes in all forms of media, the importance of data and the rise of wireless. Amidst this rapid change, privacy is one of the most important issues in the advertising and media business, and one which demands our attention now, not tomorrow.

The Way I See It

  • I see that digital technology and media has created an unprecedented “Holy Grail” opportunity for marketers to have conversations with consumers as individuals wherever they are on a broad array of devices. The question we must answer is, how do we manage the legitimate privacy concerns?
  • I see the FTC’s role and influence in steering the privacy and data security debate and action rising in importance.
  • I see global marketers and agencies working in good faith either alone or in groups to navigate safely through leading edge issues and the concerns of interested parties – the government, agencies, marketers, technology providers, media and consumers.
  • I see “do not track” continue to be a central issue that focuses many of the important advertising industry and societal issues about both what can be and what should be.
  • I see “privacy by design” being a simple concept, but a difficult concept to execute in real time.

The Way The Industry Sees It

Commissioner Julie Brill of the FTC shared some extremely valuable insights with me and the attendees of our Advertising Week session. I then asked Commissioner Brill some follow up questions that touched upon some of the conversation that we had in our Advertising Week session.

Can you highlight what you see as the role of the FTC in regards to its relationship with the advertising industry’s need to focus on consumer privacy and data security?

The Commission has developed a set of best practices, as outlined in the agency’s March 2012 final privacy framework, for companies that collect and use consumer data. (“Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers,” An FTC Report (Mar. 26, 2012) available at http://www.ftc.gov/os/2012/03/120326privacyreport.pdf.) Because the advertising industry is among the heaviest users of such information, these best practices can be useful to the advertising industry –including ad networks, individual advertisers, and all other players in the advertising eco-system—as they develop and maintain processes and systems to operationalize privacy and data security practices within their businesses. In addition to our policymaking role, the Commission takes action against companies—including those in the advertising industry—that do not treat consumer data in accordance with the laws enforced by the agency. For example, we took action against several advertising networks that misrepresented their practices involving consumers’ ability to opt-out from online behavioral advertising. (See press releases, “FTC Puts an End to Tactics of Online Advertising Company That Deceived Consumers Who Wanted to “Opt Out” from Targeted Ads” (Mar. 14, 2011), available at http://www.ftc.gov/opa/2011/03/chitika.shtm; “Online Advertiser Settles FTC Charges ScanScout Deceptively Used Flash Cookies to Track Consumers Online” (Nov. 8, 2011), available at http://www.ftc.gov/opa/2011/11/scanscout.shtm).

In the fast paced world of marketers and agencies where they must implement “privacy by design”, what is the biggest issue confronting the industry?

Well, there are a lot of big issues. One of the biggest issues is the rapid pace of today’s technological advances. Companies are bringing products and services to market as quickly as they can—and the advertising and marketing have to keep up with that pace. As a result, companies may not be employing a methodical process to consider all the privacy and data security issues that could arise with the product or service, or with an advertising or marketing campaign. I think one of the most important elements of Privacy by Design is for companies to take the time to thoroughly examine the consumer information they are collecting, what is being done with that information, and how it is being safeguarded. In our privacy report, we stress the importance of operationalizing these processes, which will help companies conduct these analyses in an efficient and timely fashion.

Continue Reading Privacy and the FTC: Inside Perspective from FTC Commissioner Julie Brill