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With the DMA announcing their new one million dollar PR campaign “Data-Driven Marketing Institute,” the question of privacy and rules around customer data has become a greater focus of some of the panels this morning. Jordon Cohen of Moveable Ink, brought up the headline "Target knows a teenage girl is pregnant before her own father does" and posed the question: have we finally gone too far?

For those of you who didn't read this headline in February, an irate father charged into a Target store demanding they stop targeting his teenage daughter with emails full of baby products because she wasn't pregnant. It turns out Target was right, and the father was wrong. She was pregnant and her shift in product purchase at Target made the marketers behind the brand know of her news before any of the world may have known.

Jason Scoggins of Freshpair stressed that targeting has to go through a "creep" filter and in the case of the Target example, they went too far.

It seems like Congress is leaning the same way. Currently the United States is inundated with data brokers, those organizations that collect personal data and sell it on to companies. In a New York Times article in June, Natasha Singer explained: 

Mr. Markey’s ultimate goal is to determine whether legislators should enact a law regulating the industry. Unlike consumer reporting agencies, which are required by federal law to show people their own credit reports and allow them to correct errors, information brokers are not currently required to show consumers information collected about them for marketing purposes.

Democrat Senetor Rockefeller opens an investigation in practises by Acxiom and others

Just last week, Senator John D. Rockefeller IV, took Markey's concerns one step further and opened an extensive investigation on the practices of those data brokers that compile and sell information about consumers.  According to a press release from the US Senate committee on Commerce, Science, and Transportation, Rockefeller said:  

Collecting, storing and selling information about Americans raises all types of questions that require careful scrutiny. While these practices may offer some benefits to consumers, they deserve to know what’s being collected about them and how companies profit from their information.

He sent letters to companies including Acxiom, Experian and Equifax to investigate how they are using data in order to better inform future regulations. He specifically asks the following questions: 

  • What data about consumers does your industry collect?
  • How specific is this data?
  • How does your industry obtain this data?
  • Who buys this data and how is it used?

This comes out of the concern about, what Rockefeller calls:

...[The] unprecedented amount of personal, medical and financial information about [people that] can be collected, mined and sold…An ever-increasing percentage of their lives will be available for download, and the digital footprint they will inevitably leave behind will become more specific and potentially damaging, if used improperly. 

DMA claims Rockefeller is on a fishing expedition

Linda Wolley of the DMA quickly countered (what I thought to be a good move on the part of the Senator) and called Rockefeller's investigation “a baseless fishing expedition.” Her opening statement at the DMA 2012 and in a further press conference, echoed this sentiment. Wolley stressed that we have to stop this regulation of the marketing industry lest US marketers fall into what she arrogantly surmised as the same dire predicament Europe is in with their recent EU ePrivacy Directive.

This belief seems far removed from the 89% of UK consumers that think the EU ePrivacy Directive is a positive step and the 82% of marketers who believe the cookie law is bad for the web but do not necessarily disagree with the 'spirit' of the directive. They just have an objective to the ham-fisted way in which it has been applied. 

So why stop an investigation that will help educate the very senators that need to understand the industry?

Is this because Wolley thinks this investigation will lead to too much regulation that will stop the great work of marketers everywhere? Wolley's opening statements went further to say: 

Marketers have the power to feed the poor, rescue abandoned animals, save the environment. Marketers can change the world.

As much as I love marketing, this stretches things more than a bit for me. While Wolley stressed that our ability to change the world is all because of the data marketers collect but how about those untargeted direct mails, phone calls and emails? These too are the result of my data being collected. Just because I am a certain age or a woman or now live in New York doesn't mean that I conform to the norm. This type of data gathering currently sits in the world of the bell curve and less on the long tail approach that Chris Anderson stressed we must push toward in our increasingly big data world.

DMA scared regulations will lead to job loses

But Wolley is sure that any kind of 'Do Not Track' regulation is going to cripple the US marketing industry. She stressed:

Direct marketing this year accounted for 8.7 percent of the total US gross domestic product. And data-driven marketers -- both commercial and non-profit -- will spend $168 billion on marketing.

That accounts for 52.7 percent of all ad expenditures in the US. Measured against total US sales, these advertising expenditures will generate approximately $2.05 trillion in incremental sales. Marketers and the sales efforts they support account for 9.2 million US jobs.

Somehow I don't see Europe's economy crippled because of the ePrivacy Directive as Wolley believes will happen to the US if the "Do Not Track" regulations come into play. I would argue this could make marketers work harder, use their own data better and help create a consumer base that are more aware of the value of their data.  It could also help weed out the unscrupulous data collectors.

I'm not proposing enabling Do Not Track as an opt-out decision as Microsoft are rolling out with IE10 and I agree when DAA managing director Lou Mastria statements in his Adweek op-ed:  

Advertisers want smart ads, and the Internet helps deliver that; a default DNT would seem to shut that possibility down at the start. Furthermore, the education effort should be aimed at calming fears about privacy while delivering value to brands and consumers, not fanning the flames of the debate.

I think we have an opportunity to make sure regulators and policy makers understand the technology so that the US government does not create blanket policies. We also have a responsibility to educate customers like the DDMI is supposed to be created to do. But this lash back from Wolley makes me think she's scared the industry won't pass the privacy test. By having well informed and well measured regulations in place, we will be able to create a better marketing environment for those who work in the industry and for those of us that are bombarded with ads every day. We do want smarter ads but we want to decide who gets to give them to us.

The marketing industry can't continue to self regulate

As I overheard someone at the DMA conference saying, by doing that we're allowing the thief to guard the jewels. The problem is not with us as marketers collecting customer information for ourselves to help our customers and our relationship with our customers, it's when we give that information to others where the problem lies.

It's been a fun ride for those marketers who have been making money off of our data but looking at what's coming down the pipeline, this free ride may be coming to the end. I don't think it's going to be as dire as Wolley believes. In fact, I think my world may be a better place because of it.

Editors note: Our report, The EU Cookie Law: A Guide to Compliance, explains the legislation as far as it affects UK online businesses, sets out some practical steps that you can take towards compliance, and includes examples of how websites can gain users’ consent for setting cookies. For those only operating in the US space, it may be worth you keeping these practical steps in mind.

Heather Taylor

Published 16 October, 2012 by Heather Taylor

Heather Taylor is the Editorial Director for Econsultancy US. You can follow her on Twitter, Google+ or Pinterest.

236 more posts from this author

Comments (4)

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Wanda Tinasky

The New York Times article about Target is clearly bogus. The entire article is based on anecdotal evidence about a father who "discovered" that his daughter was receiving pregnancy information. That's it. Nothing else. No interview with the father or the daughter. No names. No proof.

almost 4 years ago

Heather Taylor

Heather Taylor, Editorial Director at Econsultancy

The reporter may have been protecting the name of the father. Do you know personally that it isn't true? Do you need full name, occupation and address to believe they are speaking of a real person? In any case the data analysis exists - you can actually see this type of targeting on Facebook ads and the analysis they are speaking of in terms of targeting pregnant women makes sense for targeting marketing. I'm sure they are doing it. If not, they aren't using their data to help them.

almost 4 years ago

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Richard Beaumont

The DMA campaign is to be welcomed - as long as it is open and honest about how tracking and behavioural targeting works.

However, the vehement opposition to Do Not Track by the ad industry really highlights a very fundamental fear that they will not be able to demonstrate the value of what they do to consumers sufficiently well for those people to decide to allow themselves to be tracked.

It is also therefore a fear that exposure of the business model will damage rather than enhance the percieved value of online ads.

Now look elsewhere, to the banking industry. Before the financial crisis, they made a lot of money, to a large extent by having a business model that very few people understood, and was not sufficiently well regulated. Now bankers have a huge struggle to re-build reputations and consumer trust - certainly in Europe.

Any industry doing well, fears regulation, and the loss of revenue it may bring while they adjust. However I would argue that if they don't embrace it now - there may be more profits to be had now, but the much greater long term damage will surely come at some point - and be more costly to repair at that time.

A stitch in time saves nine.

almost 4 years ago

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wes herzik, founder at ikonicmedia.com

I've been hearing about the US government imposing regulating for years. About the only group opposing government regulation are big marketers and advertisers and they will never change until the government makes a mandate. I like big business (and making money) but what people don't know is to the extent they are already profiled and soon to be very profiled with upcoming technology.

Congrats to the UK for showing the right way to go about regulation. Time for US Advertisers to step up and deal with the issue rather than pretend it doesn't exist.

almost 4 years ago

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