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Private Property: Mobile Marketers Accused of Compromising User Privacy

By: NMK Created on: February 2nd, 2009
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As more and more consumers access the Web via mobile devices, fears have arisen about user privacy on mobile devices. New Media Knowledge looks at a storm brewing in the US which could have implications here. 

Issues of consumer data protection traditionally associated with the Internet are now migrating across to mobile platforms, if a new debate in the US is anything to go by. Two user interest groups – the Center for Digital Democracy and the US Public Interest Research Group – have teamed up to petition the Federal Trade Commission (FTC) over what they claim are underhand marketing tactics particularly aimed at children, teenagers and migrant groups.

The chief issue is behavioural targeting. Jeffrey Chester, executive director of the Center for Digital Democracy, believes that privacy issues are raised if companies build up profiles of mobile consumers.

“The basic business model for mobile marketing is the adoption of behavioural targeting and marketing and now location is a part of the model as well,” Chester is quoted as saying.

The US complainants conclude that: “It is especially critical that the FTC act now to protect the interests of the public, while the mobile platform is still in development and as an even more interactive Mobile 2.0 environment looms on the horizon.”

The Mobile Marketing Association (MMA) refutes the claims, saying that the industry self-regulates itself “responsibly”.

Defence Mechanism

One of the firms cited to the FTC was mobile marketing technology provider Xtract, whose behavioural targeting systems were labelled as “deceptive”.

The company was quick to defend its technology, emphasising that it did not support methods that use subscriber data directly for targeted marketing, as some social network operators in the mobile and Internet spheres have tested.

Jouko Ahvenainen, vice president and co-founder of Xtract, said in a statement: “Using analytics tools, mobile operators do not need to mine data directly from individual accounts and so analytics tools provide the very foundation for privacy that users demand. Customer details are kept hidden, with the data always anonymised. Without using analytics tools one could imagine a world where all mobile subscribers are blanketed with irrelevant ads and promotions that are useless to most of the recipients.”

Xtract says it recommends that mobile operators and social Internet communities use data aggregates and behavioural data patterns to gain a better understanding of their customer base instead of making user data visible coming from the network level.

Permission to Brand

Wunderloop is a German developer of behavioural targeting technology and runs its own ad network. For the company’s UK managing director, Donald Hamilton, the industry needs to strike a balance between protecting the rights of the consumer and helping them make more informed purchasing decisions with relevant advertising. Those firms which don’t respect the consumer will ultimately suffer, he argues.


Above: Donald Hamilton

“It should go without saying that any company operating in the mobile marketing industry needs to prioritise the safe storage of private data and ensure they gain the permission of their consumers,” he told NMK. “However, it should not be overlooked that there is a growing demand from consumers for more targeted marketing. Consumers are becoming tired of receiving irrelevant ads and increasingly expect intelligent and innovative companies to start making use of that data which they choose to share to generate a more personal marketing experience. If a company doesn’t take the time and effort to understand and engage with them then consumers will soon start turning to companies that do.”


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