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Venable attorney claims marketers must balance privacy concerns with consumer needs

NEW YORK ? A Venable attorney speaking at the fifth annual Mobile Marketing Day said that while data privacy and security are important concerns for consumers and regulators, there is also a need for more relevant advertising, forcing marketers to balance these issues.

There are many instances of how congress, the Federal Trade Commission and the White House are focusing on issues around mobile privacy. At the same time, momentum is building behind a self-regulatory initiative introduced last year by the Digital Advertising Alliance.

?Mobile users are more privacy sensitive than Web users and are looking towards trust indicia and other measures of trustworthiness,? said Kelly DeMarchis, associate in the regulatory affairs practice group at Venable, Baltimore, MD.

?Sixty-eight percent of consumers do say they want relevant advertising,? she said. ?Customers do prefer relevant ads but they are also privacy sensitive.?

The bad news for marketers is that concern surrounding mobile privacy continues to be pronounced.

A recent Truste survey showed 78 percent of consumers will not download an application they do not trust, which is down from 85 percent in 2012.

Privacy is also a primary concern for 22 percent of smartphone users when using mobile apps, second only to battery life at 46 percent.

The good news is that awareness is growing around some of the self-regulatory tactics in place.

For example, 40 percent of smartphone users check whether an app has a privacy policy while three in ten check for a privacy seal, and 39 percent research apps.

These findings suggest that marketers could help address some of consumers? concerns by adopting privacy best practices such as transparency, having a privacy policy and using a privacy trust mark.

Data security concerns grow
Regulatory concern around privacy is a real issue that cannot be overlooked.

For example, a California Do Not Track law went into effect in January 2014.

Additionally, a data broker accountability and transparency act was introduced in Congress in February.

While a lot of discussion has been on privacy, the focus has shifted somewhat to data security in the wake of the Target data breach, with the scale of the breach renewing the push for legislation and five bills around data security pending.

These run the gamut from requiring companies to provide customers notification only when there is reasonable threat to them to having to provide notifications in every instances of a security threat.

Additionally, some of the bills would require companies to send notifications expeditiously while others would require customers to be notified within 48 hours.

Currently, different states have different data security requirements in place, making it a cumbersome process when companies do incur a security breach. For this reason, industry is likely to support a bill that imposes a federal standard without being too cumbersome.

Big Data review
The FTC is also making privacy a big focus. The agency is holding a series of privacy seminars, including one that was held in February covering location awareness technology.

The FTC is also focused on the Internet of Things, having already taken an enforcement action against a manufacturer of Internet surveillance cameras.

The FTC is also looking into data brokers.

President Obama introduced a Big Data privacy review in January that will study the collection, analysis and use of data with an eye towards its effect on the public. The study will extend beyond the challenges of privacy as they relate to the government ? which has been in the news a lot following Edward Snowden?s revelations ? and to commercial issues as well.

All of this is happening alongside ongoing industry attempts at effective self-regulation.

The DAA is attempting to extend its AdChoices icon for the Web onto mobile applications with a program it introduced last summer. The icon, which is viewed one trillion times a month, lets users know how information about their activity is being gathered.

The group is currently working on specifications for delivering the icon in the mobile environment and building a choice tool for cross-app data that it expects to introduce some time this year.

?Growing awareness across users is indeed happening and as knowledge grows, comfort grows,? Ms. DeMarchis said.

Final Take
Kelly DeMarchis is associate at Venable, Baltimore, MD