White House Supports Self-Regulation in Data-Driven Marketing

The White House released a report yesterday on Big Data and privacy that largely supports data-driven marketing and the self-regulatory practices favored by industry organizations such as the Direct Marketing Association (DMA). The report culminated the White House’s 90-day review of Big Data usage by marketers. But if legislators, consumer groups, or privacy activists were hoping the report would speed up data usage legislation, they are apt to be disappointed.

“There’s very little time left in terms of working days that this Congress will be in session,” said Rachel Thomas, VP of government affairs, DMA. “There are a lot of other priorities. I’m not sure that [this report] will move comprehensive privacy legislation across the finish line.” 

Likely referencing organizations such as the Digital Advertising Alliance (DAA) and DMA, the report states, “For well over a decade, the online advertising industry has worked to provide consumers choice and transparency in a self-regulatory framework.” The White House calls for reform of the Electronic Communications Privacy Act—one of the DMA’s five fundamentals for the future—and for the Administration to advance the Consumer Privacy Bill of Rights.

The report recommends comprehensive legislation, though Thomas notes that this recommendation has stood for two years without moving through Congress. “That said, one of the things DMA was happy to see highlighted in the White House report was the power of self-regulation,” she added. “A federal law may be unlikely to pass, but it isn’t necessary to make sure consumers are protected properly. DMA members work every day to make sure data is used responsibly. We’ll continue to do that regardless of what happens in Congress.”

While the report acknowledges and commends digital marketers’ efforts on increasing transparency, it declared that consumer engagement with opt-out initiatives such as Do Not Track and the standardized information icon on banner ads has proven lackluster. Nonetheless, the White House endorses marketer’s use of Big Data, stating that it’s natural for personalized targeting to take root and flourish in the interactive marketing industry. “Expensive television slots or full-page national magazine ads seem crude,” judged the report, “compared to the precisely segmented and instantaneously measured online ad marketplace.”

Overall, the White House report is good news for marketers, according to DMA SVP of Government Affairs Peggy Hudson. “DMA is pleased to hear the White House recognizes the value that data has for consumers and the nation’s economy,” Hudson said in a statement praising the administration. “The report is thoughtful and deliberative,” added Stuart Ingis, general counsel for the DAA.

Although the White House seems in accord with marketers’ treatment of data and transparency, it encourages the data service industry to improve. “The data services industry should follow the lead of the online advertising and credit industries,” the report counseled, “and build a common website or online portal that lists companies, describes their data practices, and provides methods for consumers to better control how their information is collected and used or to opt-out of certain marketing uses.”

The prevailing grievance expressed in the report centers on the use of data for discriminatory purposes. “Unfortunately, perfect personalization also leaves room for subtle and not-so-subtle forms of discrimination in pricing, services, and opportunities,” the report says. “We must begin a national conversation on Big Data, discrimination, and civil liberties.”

The discrimination mentioned in the report has less to do with marketing and more to do with data-based practices with existing questionable ethics. The report specifically mentions cases such as Staples charging consumers less for simply being closer to a Staples brick-and-mortar location. Such practices are already viewed as something of a slippery slope by organizations such as the DMA. “The DMA has long opposed the use of marketing data for discriminatory purposes and would support Administration efforts to restrict such uses,” Ingis said.

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