The feature of mobile marketing that is most attractive to advertisers is also the one that poses the greatest risk for content publishers: behaviorally or geographically targeted messages.
When practitioners euphemistically talk about targeting, what they really mean is that the advertiser knows enough about the consumer to be able to predict what kind of ad will grab attention and convince shoppers to spend money.
It sounds like no big deal, as consumers have slowly become accustomed to making small trade-offs in the name of convenience. Many advertisers are already engaging in behavioral targeting online by tracking search terms and more. Now, an increasing number of phones have GPS functionality built in that can help emergency personnel find people who are lost or injured.
Advertisers could use this same technology to tell where a consumer is and target their messages to the consumer’s location. Such targeted advertising on a device as personal as the mobile phone can feel like a privacy violation to consumers.
“There are several troubling privacy-related scenarios about such services,” says Beth Givens, director of the Privacy Rights Clearinghouse. In 2004, Givens participated in a working group on privacy principles and guidelines for wireless phones for TRUSTe, a nonprofit 501(c)(6) that consults with technology companies about their privacy policies. (The resulting report can be found here.)
Any use of a phone’s GPS system “should, of course, be opt-in,” she says. “And the company's privacy policy must clearly describe what is done with the data that is collected.”
Consumers should also be allowed to specify whether they want transactional and geographical data stored by the wireless carrier and any of the companies it deals with, Givens adds. “This choice should be made before the service is actually turned on by the individual.”
According to the Mobile Marketing Association’s Code of Conduct, “Current Internet marketing and privacy standards do not adequately address the specific challenges faced by marketers when marketing through the mobile channel. Strong mobile industry privacy principles will protect the mobile channel from abuses by unethical marketers, and limit consumer backlash and additional regulatory scrutiny.”
In April, MMA released its most recent version of “Mobile Advertising Guidelines”. In a small section about advertising and reporting, MMA’s guidelines include:
Operators may use counting tools that use digital fingerprinting or similar technologies to track message distribution among users in the network. This allows the service provider to track the dissemination routes, to identify social leaders and to reward users for forwarding messages. However, all of these capabilities must comply with existing national level regulatory and legal frameworks covering privacy and the use of personal data. In addition, end users’ concerns and expectations will always need to be carefully managed. Taking all steps necessary to ensure end customers fully understand any proposal to use their data, together with providing a clear choice to opt in or out of this type of service is essential for its long-term success.
Industry experts say information gathering for the purposes of targeting marketing materials has been in place since the first Sears, Roebuck & Co. catalogs went out.
“People hate advertising right up to the point that it’s telling them about something that’s exactly what they want,” said Peter Zollman, editor of Classified Intelligence. “They throw hissy fits about privacy, but when you say that giving up privacy will help them save $3,000 or so, well, lots of people start granting permission.”
For newspapers across the world, all this translates into figuring out what reward they can offer readers to entice them into allowing advertisers to collect private information. If newspapers want to get in front of the coming mobile revolution, one of the ways would be to institute strict, public controls to protect the privacy of customers and – most importantly – explain mobile advertising in language the average person can understand.
Cell Phone Spam
In India, Prime Minister Atal Behari Vajpayee sent out a recorded message to every single cell phone in the country of 1.3 billion people before the 2004 elections. While this mass message didn’t raise too much ire from the public (perhaps because incoming calls are free in India), it was a big sign there that the mobile platform was being taken over by the digital equivalent of junk mail.
“Mobile phone users in India do routinely get spammed with a lot of advertising, unless they opt out via an obscure process,” said Shankar Barua, Managing Trustee at The Academy of Electronic Arts in Delhi. Although India, like the United States, has a Do-Not -Call list, Barua says the sign-up process in India is “obscure” and he has never read anything explaining how he might sign onto the list. To dissuade advertisers from spamming listed cell phones, penalties in India are increasing.
In India, the spyware, registration traps and viruses that are all-too-common features of Internet scam advertisers have started turning up on phones. However, the labor cost of having a phone wiped clean is so low, most users just have their phones regularly serviced, assuming that strange behavior (i.e., the phone dialing the same number over and over) is just a hardware problem.
“Most ordinary people are resigned to phone spam because they do not know how to opt out, or even that they can,” Barua said.
In 2004, the U.S. Congress passed the CAN-SPAM Act, which covers messages sent to cell phones and pagers, but does not necessarily cover SMS (text) messages. However, the Telephone Consumer Protection Act does include rules that prohibit advertisers from sending unwanted text messages to a cell phone number if the messages are sent using an automated dialer or if the consumer has placed the number on the national Do-Not-Call list.
Mobile Marketing and Children’s Privacy
One of the areas of greatest concern is mobile marketing to children. Nearly two-thirds (63 percent) of U.S. teens ages 13 to 17 have cell phones, according to the Pew Internet & American Life Project. Close to half of children ages 9 to 11 have cell phones, according to C&R Research. These are demographics that advertisers spend billions each year trying to reach.
In one famous study, researchers took a group of grade-schoolers and instructed them on the dangers of the Internet, including that the children were never to give their e-mail address to strangers in chat rooms. Initially, the children stuck to their guns and didn’t give up personal information. But, when adults in the experiment offered the children a candy bar, the vast majority happily gave up their password.
Research has shown that 99 percent of consumers with a high school education or less couldn’t understand privacy policies, and only one-quarter of privacy policies allowed users any option to opt out of having their information harvested.
Knowing this, some marketers are pushing for the Children’s Online Privacy Act to be widened so that it covers both the mobile Web and mobile marketing. In Finland (home of Nokia), the laws prohibit advertising to children under 15 on mobile devices without the parent’s explicit consent, according to the Finnish Consumer Agency.
Phone manufacturers are trying to address the issue by producing handsets (like the iPhone 2.0) that will enable parental controls.
Also, the Mobile Marketing Association has developed guidelines to regulate what kinds of ad messages will be allowed, including specific guidelines concerning children. Those guidelines are included in MMA’s Consumer Best Practices Guidelines.
David LaFontaine is a freelance writer/videographer who lives in Los Angeles, Calif. More...
A former technology writer and associate editor for NAA’s Presstime magazine, A.S. Berman also served as technology writer for USA TODAY. More...