As Amped-Up Ad, Data Privacy Laws Near, Self-Regulated Programs Matter More

As we prepare ourselves for federal (and state) legislation around privacy and advertising, it’s worth taking account of our own industry’s self-regulated programs — both those here at home and worldwide.

As we prepare ourselves for federal (and state) legislation around privacy and advertising, it’s worth taking account of our own industry’s self-regulated programs — both those here at home and worldwide.

Why? Because even in an age of regulation, self-regulation — and adherence to self-regulatory principles and ethics codes of business conduct — matter. One might argue that legal compliance in industry is good enough, but business reputations, brand equity and consumer trust are built on sterner stuff.

Having a code of conduct is exemplary in itself, but I’d like to address a vital component of such codes: enforcement.

Self-Regulated programs
Transparency & Accountability in Advertising Self-Regulation Matter Greatly. | Credit: Chet Dalzell

Credibility in Codes Requires Peer Review & Accountability

Behind the scenes, every day, there are dozens of professionals in our field who serve — as volunteers and as paid professionals — to monitor the ethical practice of advertisers, who devise and update the codes we adhere to, who educate companies that proactively reach out to them, who work with companies and brands that go astray to resolution, and who enforce and refer non-compliant companies to government agencies, when necessary.

They may take complaints directly from consumers, competitors and industry observers. They may employ technologies and their own eyes and ears to monitor the marketplace. They may meet regularly as volunteers as a jury to deliberate on any need for corrective action. And, usually, they have a “contact us, before we contact you” operations effect: brands and businesses can proactively ask ethics programs questions about the “right” way (by the consumer) to execute a marketing practice, so it doesn’t prompt a formal query after a mistake is made after the fact.

Importantly, credibility depends, too, on reporting publicly on outcomes — potentially to “name and shame,” but most often to work cooperatively with businesses and to serve as an industry education vehicle in the reporting of correction and the resolution process. Generally, “punitive” is when a non-cooperative company is referred to a government agency for further action. Government agencies, for their part, tend to wholeheartedly welcome any effective effort to keep the marketplace aligned with the consumer. It helps when brands and consumer interests are in sync.

Accountability Programs Deserve Our Industry’s Expertise & Ongoing Financial Support

All told, these important players in our field serve us well, even as we face what might be referred to as co-regulation (government regulation on top of self-regulation). While any potential business mishap — for example, in the handling of consumer data or the questionable content of an ad — has its own set of facts and ramifications, a demonstration of good-faith efforts to adhere to ethical business practices might be seen as a mitigating factor, even as a brand finds itself needing to take a corrective action.

Agility, flexibility and responsiveness … these are all attributes of successful self-regulation — as well as successful accountability. Effective self-regulation serves to keep pace with innovations in our field, and “point the way” for other companies, as issues arise. (The rigidity of laws rarely can accommodate such innovations.)

While industry professionals may serve as volunteers on juries and review panels — it can be fascinating to serve on such panels — there is almost always an infrastructure of programs and staffs underpinning self-regulation success. Trade associations may finance some of these efforts with membership dollars — but usually businesses can lend their own resources directly, too. It’s great to have a seat at the table.

Marketing Ethics & Self-Regulation Programs — A Partial Listing

In all likelihood, there are potentially many more codes of conduct — particularly in vertical fields (pharma, travel, non-profit, retail, etc.) — but here is a brief listing of advertising-related codes and programs that may be helpful to catalog, bookmark, research and support, with some of which I’ve had the honor to be associated:

Please feel free to use the Comments section to suggest others. And thank you to every volunteer and staff person who serves or has served in an industry accountability capacity. It makes a world of difference, with marketplace trust of advertising and advertisers being the ultimate goal.

Warning: Marketing Data Policy-Making Ahead in the U.S.

U.S. data policy-making efforts make certain assumptions about marketing. It’s as if there’s a sign coming, saying: “Data Is a Weapon.” But what if lawmakers instead assumed data was a force for good?

U.S. data policy-making efforts make certain assumptions about marketing. It’s as if there’s a sign coming, saying: “Data Is a Weapon.” But what if lawmakers instead assumed data was a force for good?

Certainly, when dealing with the European data protection community — who may seek 4 percent of your global profits — it is wise to be deferential, even praiseworthy.

Apple CEO Tim Cook, in his speech last week to European data commissioners that hearkens back to President Eisenhower’s warning in 1961 about the “military-industrial complex,” identified commercial data collection interests as a “data-industrial complex” that has “weaponized” the collection and monetization of data with great efficiency.

Reading of this, one might extrapolate that all data collection is worrisome, and that this so-called trade in data amounts to “surveillance” that is inherently harmful.

To some, this might be 1961 all over again — or 1984, for that matter.

https://youtu.be/axSnW-ygU5g

In reality, some may be singing from the choir book brought to us by European Parliamentarians. Every time I see a cookie notice on my U.S. website visits, I’m reminded, perhaps gently, that our sovereignty is being visited upon by foreign lawmakers. Europe’s leaders are trying to remake the Internet in its image — while China’s leaders do the same — and the world may be a lot less friendly toward each other as a result.

Considerations of a Healthful Policy Debate

As consumers, we may welcome privacy and security in our nation’s Internet public policy debate. All is not the same, however. We must handle our own policy-making with utmost care. Europe’s General Data Protection Regulation (GDPR) is one model — but is this European law really the right fit for the United States or, for that matter, other regions of the world?

In the private sector:

  • Consider the role that ad-financing (read, digital data) plays in ensuring quality journalism necessary for a healthy democracy.
  • Consider what consent restrictions (read, opt-in) would play in diminishing the ability of start-ups and mid-sized companies to compete with established companies — competition in the digital economy.
  • Consider an appreciation of the long-tail of the Internet — and the diversity of content and niche interests that meet consumer demands, made available through small publishers.
  • Focus on who is at the center of privacy restrictions — the citizen, digital user and the consumer. In every aspect, what are the trade-offs that individuals would experience when responsible data flows are effectively shut down?
  • Appreciate that all data are not the same. Are there data collection scenarios where there is a greater likelihood for harm? Are there categories of personal and user data that are more harmful than others — to the interests of that individual? In the United States, we already highly and wisely regulate such data as credit, health, children’s data, government identification numbers and more.
  • And importantly, understand how private sector use of data — and public sector use of data — differ. How should the two exchange, and not exchange, data between them?

Globally and certainly here in the United States, data enables commerce, consumer choice and diversity of content. Truly, the commercialization of data drives incredibly powerfully beneficial social aims. Such aims deserve recognition as policymakers weigh measured regulation.

Some global business leaders, for whatever motivations, heap praise on GDPR, but there’s danger in assigning “one size fits all”-type regulation. “Surveillance,” too, is a very loaded word — especially where responsible data collection and use represent an unparalleled force in the private sector for good: jobs, economy, competition, ad-financed content and services, and much more. Even governments package public records for beneficial use in the private sector. Remember the only reasons businesses exist is to create and serve a customer.

Where Surveillance Is a Material Concern

On the other hand, where surveillance truly is not a loaded word is where the public sector gathers and uses digital and mobile information to monitor citizens. Or where a government, foreign or domestic, demands the handover or censorship of such information from and of the private sector.

Here, I applaud close – very close – attention to what our government, or any other government, does with digital data, including that which exists in the private sector. Within the U.S., warrants, court orders and subpoenas should be demanded before private sector entities satisfy any government requests for information (and/or deletion of information). As government indeed has honest objectives — combatting fraud, terrorism and other crimes, or advancing public safety or health, for example – then it is wise to provide for independent judicial overview as a necessary check and balance to validate such laudable goals.

Data is a weapon only when it’s perversely used to disserve a consumer, a voter or a democracy. Let the private sector freely use information responsibly for all else, for it unleashes forces for good that serve consumers, the economy and robust discussion.

Faking It: Did I Cover My Tracks Well Enough?

I just happened to be at a conference this week dedicated to privacy, security and assessing risk in data flows, and casually heard stories from privacy-minded folks on some of the lengths they go to to “cover” their tracks online, in mobile, on cameras and in other activities in the virtual and physical worlds.

Data-Driven Marketing: What Corporations Want, What Consumers Demand!I just happened to be at a conference this week dedicated to privacy, security and assessing risk in data flows, and casually heard stories from privacy-minded folks on some of the lengths they go to to “cover” their tracks online, in mobile, on cameras and in other activities in the virtual and physical worlds.

It reminded me of Ram Avrahami – who lost a celebrated court case exactly 20 years ago. In that instance, Mr. Avrahami, a U.S. News and World Report subscriber, intentionally changed the spelling of his name on his subscription to see how his name and address were pandered by the publisher, and then called out the magazine for not honoring his name suppression request (based on his actual spelling). Moral of the story: you can’t thwart industry privacy self-regulation practices and then call out the industry for not being responsive to your privacy concerns.

Then, there’s my own subscription to Elle Décor. Through no fault of mine, I’ve been known to Hearst Publishing as “Hester Dalzell” (a data entry error on their part that I never bothered to fix). Probably like Ram Avrahami before me, I take heightened interest in who happens to send direct mail to me as “Hester.” Simply an indication of who is renting or exchanging the Elle Décor subscription list.

Unlike my privacy friends, however, I hardly ever opt out of anything. I may be the one of the last Americans not on the Federal Trade Commission’s Do Not Call list.

It also makes me think of today’s digital and mobile “cover ups” equivalents — ad blockers, use of private browsers, laptop camera covers, photo masking and encryption, among a host of others. Some of these may be more illusory when it comes to clearing our tracks than they actually are. And who really knows how much or how little privacy we have when it comes to government spying, hacking and surveillance?

I earn a paycheck: I’m a true believer in our industry’s own privacy self-regulatory practices. Advertisers and marketers long ago recognized that by giving consumers transparency and control — preference centers, suppression lists, industry opt-out tools, frequency controls, etc. — we’re truly serving both consumer and business best interest. These efforts may not be perfect, but they are effective in managing and meeting most consumer expectations.

But let’s face it: In the end, you rarely can fake your own death. Data most always will “getcha” every time.

P.S. Speaking of privacy best practices, congratulations to this year’s Direct Marketing Club of New York’s Silver Apples Honorees — some of whom are indeed being recognized as champions for self-regulation. It will great to honor all of them on November 10 in New York.

The Importance of Being … Enforced

When you’re a marketing organization and being watched is a matter of law, the risks of non-compliance can weigh very heavy when a firm runs afoul and is caught. Few businesses can well afford litigation, fines and bad publicity, plus potential years of consent agreements with all the documentation that may be required. Brand damage.

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When you are being watched, most of us pay a little (or a lot) closer attention to what we’re doing. It’s human nature to be mindful and act accordingly.

When you’re a marketing organization and being watched is a matter of law, the risks of non-compliance can weigh very heavy when a firm runs afoul and is caught. Few businesses can well afford litigation, fines and bad publicity, plus potential years of consent agreements with all the documentation that may be required. Brand damage.

Now let’s turn to self-regulation.

When you’re a marketing organization and being watched is matter of ethics, or of best practices, the risks of non-compliance may be either heavy or light — depending on the compliance question, its marketplace implications and how cooperative the organization is to conform to industry expectations.

Self-regulation, more accurately peer regulation, is usually more preferable than direct government regulation.

For one, in data-driven marketing, innovation is a constant. Disruption is ever-present. Technology keeps changing. How can government regulation even keep up? It rarely does. That’s where self-regulation provides American business a great advantage: rules of the road get set by principle, and the market adapts to those principles.

Then, there’s enforcement of those principles. For example, I work for the Digital Advertising Alliance — a self-regulatory program based on principles for interest-based advertising and multi-site data collection for the desktop world that have been adapted for mobile and cross-device environments. I’m also a member of DMA [Direct Marketing Association], which serves as one accountability partner of DAA (the other being the Council of Better Business Bureaus Advertising Self-Regulatory Commission). These two organizations enforce DAA Principles, each in their own way. However, they are independent from DAA: Those of us who work at DAA are not privy to DMA and ASRC self-regulatory enforcement investigations, until those proceedings are made public.

Earlier this month, the DMA announced its Annual Ethics Compliance Report, which documents how businesses comply with all of DMA’s Guidelines for Ethical Business Practice. [My comments here regard the contents of the overall report, rather than those specific to DAA and interest-based advertising.]

By reading a summation of the 11,300 consumer inquiries from January 2015 to January 2016, one sees an accurate snapshot of what’s on consumers’ minds regarding our business, and how we can better address those concerns to their satisfaction. DMA reported that last year, 90 percent of cases were resolved within 30 days. Thirty-seven emerged as matters referred to the DMA Committee on Ethical Business Practice (also known as Ethics Operating Committee) for further action. Continued non-compliance, or lack of response or cooperation, can lead to a referral to a government agency, if a legal matter may be in question, or if a company may not be following its own disclosures. DMA referred at least four cases to government entities.

Self-regulation without meaningful enforcement may or may not spur ethical or best practices. But add “enforcement with teeth” to self-regulatory codes and educate industry at every turn, and lo and behold, the right result happens. The outcomes serve to protect consumers, and to protect businesses, too — all without government regulation which can prove too restrictive or quickly obsolete.

Do Consumers Love Marketing (Anymore)?

Picking up on my previous blog post, marketers have a lot of work to do, too, with consumers. Yes, we have 45-plus years of effective self-regulation on our side, and we’ve navigated fairly well into the digital and mobile age. We’ve kept self-regulation in marketing, more or less, intact where it comes to fair and free use of marketing data, even as the number of data users has grown extensively.

Picking up on my previous blog post, marketers have a lot of work to do, too, with consumers.

Yes, we have 45-plus years of effective self-regulation on our side, and we’ve navigated fairly well into the digital and mobile age. We’ve kept self-regulation in marketing, more or less, intact where it comes to fair and free use of marketing data, even as the number of data users has grown extensively.

But are we, as marketers, using data in a way that is winning the love and attention of consumers?

Some recent surveys point to some serious perception issues. First, we’re becoming jaded toward all types of advertising. A February story in the Economist, says brands are struggling to connect with an increasingly skeptical public:

Havas Media, a big marketing agency, says trust in [brands] has been declining for three decades. Last August it published the latest in a series of worldwide surveys, in which 134,000 consumers in 23 countries were asked what they thought of 700 brands. A majority of those taking part would not care if 73-percent of them just vanished. In Europe and America, 92-percent would not be missed. Only in places like Asia and Latin America, with lots of newish consumers, is there a bit more attachment to brands, though Havas Media reports that it is declining there too.

A recent post in Marketing Charts, also documents the trend, citing two more studies:

Indeed, Mindshare’s ‘Culture Vulture 2014‘ finds that only 47 percent of North American consumers last year agreed that they like to pass on interesting things they see or hear about brands, with that figure having steadily fallen over the past few years, from 66 percent in 2010 …

Another area in which brands can improve? The relevance of their messaging. Some 34 percent of US online adults responding to a new Responsys study indicate that they have ‘broken up’ (yes, the Valentine’s Day-themed terminology must continue) with a brand due to receiving poor, disruptive or irrelevant marketing messages. These break-ups were most commonly due to the brand continuously sending irrelevant content on multiple channels (53 percent), but also were frequently because the consumer never signed up to receive the offers from the brand (42 percent). (Brand stalkers!) Finally, one-third broke up because the messages were too generic and ‘obviously meant for the masses, not just them.’

And then we had a TRUSTe study which produced a daunting AdWeek headline: “Consumer Confidence in Online Privacy Hits 3-Year Low | Most afraid of businesses, not government” This is perhaps not surprising given all the general media’s coverage of overreaching government surveillance and of the untimely, huge data breaches (security). No wonder there has been a spillover effect on privacy, even as we would argue they are not the same issues.

There are two necessary responses from marketers here: do whatever you can to build trust with your customers—and do whatever you can to be relevant. And, from the reverse side, never do anything with your customers’ data that would undermine trust. Never do anything with your customer data that would convey irrelevance.

Transparency matters. Providing consumers in layman’s language an explanation of how each brand uses data to serve their customers goes a long way toward anticipating skepticism and, for some, dispelling hostility.

Choice matters. Using consumer data to make a personalized, 1:1 experience (one that is driven by segmentation, analytics and marketing triggers) that resonates with customer needs and desires, establishes relevance. Let consumers optout any time they choose to do so, but when you’re relevant, that choice is less likely to happen. It’s a new week—so how can I spend my time building trust and relevance with customers?