Consumer Groups Trying To Preempt Behavioral Targeting For Mobile Ads

The Center for Digital Democracy and U.S. Public Interest Research Group, the same groups that initiated the FTC’s investigation into “behavioral advertising” online, have “amended their complaint” with the FTC to extend to mobile advertising. According to the 50+ page document filed yesterday:

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.  The mobile industry has already developed extensive plans and techniques to help determine what it calls the “user journey” through the “mobile Internet.” Many mobile marketers are eager to exploit what they correctly perceive as a unique opportunity to target consumers by taking advantage of our highly personal relationships with these extremely pervasive devices to provoke an immediate consumer response.  The FTC, thus far, has failed to address the unique threats to privacy and consumer welfare—including the targeting of children, adolescents, and multicultural communities—reflected in what the industry calls its “mobile marketing ecosystem.”

This complaint seeks, essentially, to preempt the development of behavioral targeting and profiling in mobile advertising. It asks for investigation and potential regulation of “five areas of concern”:

• Behavioral Targeting
• Location-based Targeting
• User Tracking/Mobile Analytics
• Audience Segmentation
• Data Mining

The complaint is something of a “who’s who” of the mobile marketing industry, citing OEMs, ad networks and search companies. With the exception of behavioral targeting, responsible cultivation of the other four categories are arguably critical to the development of mobile advertising.

Mike Wehrs, the just appointed head of the Mobile Marketing Association, had a measured reaction to the complaint and was quoted saying, “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.”

The MMA has historically been very careful to establish and advocate best practices that are mindful of consumer privacy. US carriers have also been very protective of consumer privacy. The public statements of most of the mobile networks and marketing companies named in the document have also acknowledged the importance of protecting privacy and gaining “opt-in” acceptance of mobile campaigns. However the growth of open internet access on mobile phones is somewhat more complex because the mobile device and the PC become less distinguishable in such cases. Indeed, it appears that the consumer groups are trying to gain uniform regulation of behavior targeting and profiling on the desktop and in mobile.

Consumers, especially the most frequent and engaged mobile internet users, are increasingly interested in ads and offers on their mobile devices if those ads are “relevant” and/or there are controls built around what ads are received. As just one of several examples of such growing consumer receptiveness to mobile advertising, the following are survey data regarding “local offers”:

Opus Research, 2008 (n=789 US mobile phone users)

As MMA chief Wehrs’ comments indicate, a balanced and “responsible” approach that prevents consumer abuse is required. However, by and large, the mobile advertising industry has been much more respectful and careful about consumer privacy than have its PC forebearers.