Privacy Law and Direct Digital Marketing Update

Josh GordonThe rapid evolution of direct digital marketing, fueled by an intense reliance on data quality and capture, has entangled privacy and marketing, and drawn the attention of powerful lawmakers. It is wise to keep an eye out for any consumer privacy developments on Capitol Hill - especially when the developments may have an impact on direct digital marketing. Consumer privacy governance is an ongoing issue on the Hill that is not simply going to disappear with a fulfilled promise of self-regulation from the industry and the promised retirement of North Dakota senator Byron Dorgan.

Several weeks ago Shop.org announced it was able to successfully lobby against the Federal Trade Commission’s attempt to expand its rule-making power in the recently passed financial overhaul bill. The FTC’s move was in response to a privacy bill outline offered in May by Virginia’s Rick Boucher. Boucher’s outline was not turned into a bill, and the FTC’s expanded rule-making attempt never materialized. So, what now?

Illinois’ Bobby Rush introduced a bill yesterday, specifically on online privacy, and it was received more warmly even though it is similar to Boucher’s outline.

Here’s where the political fun comes into play. Boucher heads the House Subcommittee on Communications, Technology, and the Internet. His draft failed to gather input from Rush, who heads the House Energy and Commerce Subcommittee, a group that is charged with oversight on commerce, trade, and consumer protection. According to some industry experts and insiders it appears as though Rush’s bill is more clear about the FTC’s rule-making authority.

As far as direct digital marketing is concerned – especially onsite targeting – early reaction indicates that the Rush bill adheres to the same self-regulatory principles that are already largely in play. The obvious opt-out of behavioral tracking that marketers must provide is contained in the bill. Still, these opt-outs principles are primarily applied to offsite behavioral targeting, like ad networks. Onsite targeting simply tracks customer behavior on a specific Web site, or their entry point to site, with a transparent goal of making the shopping experience better. While offsite targeting is the primary target for lawmakers, it is wise for technologists and vendors that have onsite targeting solutions to offer a similarly transparent opt-out for their customers (like this one).

The truth of the matter is that quality marketers who are talented at creating conversions and generating sales know that transparency is not optional. To retain customer loyalty and build a relationship online with a customer the brand cannot afford to fool the customer – or creep them out with poorly executed marketing that leverages conspicuously captured data.

Marketers have a lot at stake with transparency. Sure, self-regulation may scare some lawmakers on all sides of the political equation. And that is understandable. But all parties involved must first realize that before marketing transparency becomes a legal have-to, it is already a successful marketing must.

4 Comments

  1. Sarah
    Posted July 21, 2010 at 2:25 pm | Permalink

    I agree! Customers creeped out by onsite targeting should have the choice to opt out. And, quite frankly, just having the opportunity to opt out makes me feel more comfortable at your site and likely to NOT opt out. Good stuff.

    • Posted July 21, 2010 at 2:29 pm | Permalink

      Interesting take, Sarah! I think there is a lot of truth to the idea that more trust is built between brand and consumer when openness is part of the marketing equation.

  2. Posted July 26, 2010 at 10:06 am | Permalink

    wrt Sarah’s comment, openness demands ‘opt-in’ even more than ‘opt-out’. What could build trust better than asking customers to participate, instead of expecting them to take the trouble to say ‘No!’?

    • Posted July 26, 2010 at 12:34 pm | Permalink

      You make an interesting point, Vic. Your question highlights the critical difference between onsite targeting and offsite targeting. Onsite is simply targeting content based on consumers who are already in your store. It’s a clerk showing a product or a sale offer to a customer in an aisle. Offsite targeting is following that customer out of the store, into another, and telling them about a sale in the old store. That example is why privacy groups are very cautious with it, in an attempt to protect consumers. As law develops in this area, the distinction between the two forms of targeting must rise to the surface.


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