Digital Advertising and Consumer Privacy: Three Trends to Watch | Hawthorne Advertising

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Digital Advertising and Consumer Privacy: Three Trends to Watch

Author: Jessica Hawthorne-Castro, CEO

Original Publication: MarTech Advisor

Date Published: March 9, 2018

Digital Privacy
Digital advertising has exploded in recent years, with the latest eMarketer data forecasting $83 billion in revenue this year and continued growth on the horizon. According to the eMarketer report, digital comprised more than 36 percent of total media ad spend in 2016, and the forecast predicts digital will account for half of ad spend by 2021, with mobile driving the majority of growth. Amidst all that growth is a burning issue: consumer privacy shares, Jessica Hawthorne-Castro, CEO, Hawthorne Direct

More and more advertisers are using consumer data and advanced digital technologies to deliver campaigns personalized to individual consumers. But with these developments come concerns. How can advertisers deliver compelling, targeted campaigns, and still honor consumer privacy?

The opportunity to deliver exactly the information consumers are looking for while promoting our clients’ businesses and products seems like a win-win situation. And because of the immense opportunity, companies are jockeying for ownership of consumer data. As of November 2016, Facebook, Google and Verizon were boosting their consumer data tracking efforts to consolidate personal information, browsing history, app usage, offline information like addresses and phone numbers, browser cookies, device data and more into a cocktail of target data that would make any advertiser’s mouth water.

And there’s no question that digital advertising is on the rise. Digital advertising earnings hit $19.6 billion in the first quarter of 2017, according to the latest IAB Internet Advertising Revenue Report. There are also more platforms, like the growing Internet of Things (IoT), on which to deliver digital ads. This year, we’ll see a whopping 8.4 billion connected things in use worldwide in 2017, according to research firm Gartner. Throw in the adoption of digital assistants like Amazon Echo and Google Home, and the virtual reality shopping opportunities on the horizon and the possibilities for targeted advertising are endless.

But consumers want their personal data and privacy protected, and they’re wary of industry efforts to capitalize on their data. More than two-thirds of respondents in a recent Gigya survey don’t trust brands to handle their personal information appropriately. Regulators are taking note and taking action. In late 2016, Federal Communications Commission (FCC) privacy rules placed restrictions on how consumer data could be lawfully used and sold.

As such, the industry is coming to a crossroads. Questions remain around the role of regulators, the feasibility of self-monitoring, protections consumers should have vs. what information is acceptable for businesses to track, and the appropriate guardrails for data collection and monitoring.

To navigate this changing landscape, I’ve identified three key consumer privacy trends that advertisers and their clients should watch:

Increased FTC monitoring and intervention

The Federal Trade Commission (FTC) enforces federal laws related to protecting consumer privacy and security and pursues violations of Section 5 of the FTC Act barring unfair and deceptive practices affecting commerce. When industry self-monitoring fails, the commission will take action.

In August of this year, Uber agreed to implement a privacy program and obtain regular, independent audits to settle charges by the FTC that the ride-sharing company “failed to monitor access to, and provide reasonable security for, consumer data.” The FTC also has had Do Not Track legislation in the works since 2010, which, if passed, would give consumers the power to opt-out of data collection about their internet activity, which is frequently used to deliver targeted advertisements.

If companies continue to cross the line from fair to deceptive, we can expect to see more actions and possible legislation from the FTC.

Improved internet content monitoring

Before the internet, “fake news” and propaganda certainly existed. But the internet has created opportunities for people to post whatever they want without accountability for accuracy, fact-checking and credible sources. We’re at a point in the internet’s maturity where it really needs to be policed for truth and accuracy. This July, the News Media Alliance, representing nearly 2,000 news organizations in the United States and Canada, requested congressional permission to negotiate jointly with Google and Facebook as a strategy to battle the rise of commoditized fake news.

It’s vital that advertising agencies, marketers, the media, companies and other entities take responsibility for the information they’re publishing in the public arena, and social and search clearly have a responsibility to help frame content as well.

Determining ISP and website accountability for digital consumer privacy

There has been a lot of thrash in this space over the past year, and rules and responsibilities don’t seem to be fully determined yet. In October 2016, the FCC enacted privacy rules requiring internet service providers (ISPs) to ask consumers for opt-in permission to gather and share data deemed sensitive. These rules differed from the requirements imposed on website operators like Google and Facebook, spurring much discussion about regulatory clarity and consistency. Then, on April 3, President Trump signed a resolution nullifying the FCC’s privacy rule for ISPs altogether.

There are still a lot of questions about which consumer privacy responsibilities rest with ISPs, which rest with website operators and which rest elsewhere. As the conversation continues, expect to see more shifts in these areas, particularly as digital ad revenues continue to grow.

Privacy rules will continue to mature; however, one constant remains: Ethical, consumer-focused business practices will weather privacy storm. Advertisers that keep the customer top-of-mind, minimize the spread of misinformation online, and infuse their campaigns with accurate, truthful information will continue to amplify their success.

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