MMA, privacy groups ratchet up rhetoric over mobile marketing practices
Argument at FTC could affect market for mobile phone advertising
January 13 2009 - 1:56 pm ET | Gary E. Salazar | RCR Wireless News
Privacy groups have stepped up their efforts in calling for federal regulation to rein in mobile marketing practices the organizations deem “unfair” and “deceptive” to handset users.
The Center for Digital Democracy and the U.S. Public Interest Research Group filed a complaint today calling for an inquiry and injunctive relief concerning unfair and deceptive mobile marketing practices.
“The commission cannot continue to sit idly by and wait — as it has done ¬with the concerns over privacy raised by online advertisers in the past — until market practices are so well ingrained that it is all but impossible to address them,” according to the complaint.
In the complaint, recommendations are given to the FTC as ways to address “the unique threats to privacy and consumer welfare” mobile marketing practices pose to children, adolescents and multicultural communities.
"The 'mobile marketing ecosystem,' as the industry terms it, poses new threats to consumers," Jeff Chester, Center for Digital Democracy executive director, said in a statement. "Many of the same practices that have raised concern about online privacy — including profiling and behavioral targeting — are being migrated over to what is called the 'mobile Web.'"
Industry fires back
Mike Wehrs, the newly appointed head of the Mobile Marketing Association, took pointed issue with the concerns raised in the complaint.
“If you read the filing in detail — and I have — you see certain types of comments and platitudes, but nothing specific,” he said. “There's not a single (example) of where something has gone wrong.
“The industry needs to be held accountable to behave responsibly. If the industry doesn't behave responsibly there needs to be an escalation path. But I think we have indicated we are behaving responsibly.”
However, Wehrs acknowledged that the mobile marketing industry could tighten its current practices.
“Yes, there are things that can be made clearer (in mobile marketing),” he said. “Maybe we could send privacy policies via e-mail, and give consumers 48 hours to opt out.”
Added Wehrs: “We welcome the discussion with the FTC.”
However, the complaint wasn't exactly a shock, as mobile marketing insiders have long expected increased backlash from watchdog groups. And the tension between those groups and mobile marketers is sure to escalate in the near future as advertisers look to deliver highly targeted messages that leverage location information, demographic data and user profiles.
A significant market
Last year, an estimated $1 billion was spent in advertising to reach mobile device users, and the figure is expected to increase to $3 billion by 2011, according to the complaint.
“Companies are rushing headlong to develop new capabilities to target more effectively the growing number of device users, an audience now numbering over 267 million in the U.S. alone,” according to the complaint.
Mobile advertising has been on the center’s radar in recent years. In 2006, the center filed a complaint asking the FTC to investigate and provide relief to consumers from tracking and targeting practices in online advertising. Today’s complaint has been added to the 2006 case, and the center claims the FTC has ignored serious welfare and privacy issues in regard to mobile marketing practices.
“Right before the commission’s eyes, many of the same consumer data collection, profiling and behavioral targeting techniques that raise concern in the more ‘traditional’ online world have been purposefully brought into the mobile marketplace,” according to the complaint.
The complaint cites a Mobile Advertising Alliance report that says the industry has an advantage in reaching consumers through mobile advertising because of the personal, location-aware nature of cellphones. The report says a mobile advertising platform should exploit these advantages.
According to the complaint, “opt-in” and “double-opt-in” procedures the industry has in place to protect consumer information from being shared with advertisers are not being strictly followed by some companies.
Many consumers also don’t “fully understand the privacy implications of every discount coupon, free download or ringtone offer that comes their way,” according to the complaint.
To address concerns, the complaint recommends the FTC:
--investigate the impact interactive, targeted advertising has on the market;
--identify marketing practices that compromise user privacy and consumer welfare;
--examine opt-in procedures to ensure consumers receive full disclosure of what data is being collected and its future use;
--and issue policies and actions that halt current practices that abuse consumer rights and recommend legislation that prevent such abuses in the future.
Colin Gibbs contributed to this article.
January 15, 2009 06:00 am
Once you give your name out in "opt in" for coupons...you become fair game for MMA and their buddies' spam and trash. You're a target with a bulls eye painted on your back. Also...read the article about consumer backlash to American Idol's text spam.
January 14, 2009 06:03 am
How can coupons be any worse on mobile than on or in any other form of media including the press and the internet? Coupons do largely offer value and if people elect to get them or go to a coupon site what an earth has Government got to do with stopping them!
January 13, 2009 02:01 pm
Coupons are an insidious first step. They delude people into thinking they’re getting value…then the madmen of Madison Avenue go to work. Like a spark in in a dry field, it spreads into a wildfire. Like an alien contagion, it turns mortal men into zombies. And all the while, an all seeing eye collects information about you, from the time you are born till the time you rest in your grave.
January 13, 2009 02:01 pm
As someone connected to the industry, I welcome the inclusion of best practices and controls. It is up to companies like Pocketstop, cellfire etc to ensure that the coupons, information and reminders that we distribute are to people who want them and will find them beneficial. If a user can easily opt-in and opt out and recieves relevant content their should be no problems. I am also here to tell you that done right, Mobile Marketing is beneficial for both the user and the vendor. We see redemption rates in the double figures. This doesnt happen because we are annoying people. It happens because we help bring consumers what they want. I too am annoyed when mass marketing comes on my television, through my door or into my email inbox....because it doesnt apply and I didnt ask for it. However done right, Mobile can be very very useful and beneficial.
January 13, 2009 02:01 pm
As a US cell phone subscriber, I pay for incoming and outgoing calls and data. So don’t even dare sending me ads. I won’t pay for them! Wireless carriers…are you listening!And don’t even try to collect data about me, while I pay for cell phone calls. Wireless carriers …you’d better pay attention now!I stopped watching network TV because of the relentless avalanche of moronic ads - every five minutes, every hour, seven days a week, every month –day in, day out. You know, the ones that tell you to… call your doctor if you have a four hour problem, buy Obama commemorative plates, beat the stock market in two easy steps, and lose 20 lbs without trying…ad nausea. Nobody pays attention or watches anyhow, as they hit the mute buttons or switch channels. As a citizen, I was a target of a never ending assault of TV advertisements that ate my brain, ripped my sanctity, and robbed my soul. But I have found freedom from the yoke of TV ads. And I’ll do the same with cell phones. I’ll stop using my cell phone, the minute MMA and its constituents show up on my screen. Wireless carriers take action, if you want me as a subscriber.