Data, advertising and media pros explain what the agency’s rulemaking plan means for the industry and for the future of data privacy at large.
The US Federal Trade Commission (FTC) Thursday announced it is kicking off a rulemaking process intended to “crack down on commercial surveillance and lax data security practices.” The announcement signifies the first step in a multi-stage effort that could take a number of years.
The new Notice of Proposed Rulemaking touches on a range of important data protection and privacy issues, including data monetization models, transparency and user autonomy, children’s privacy and safety, secondary uses of data, discrimination and algorithmic biases and data security.
Though no specific ruling has yet been spelled out, the move represents a major milestone in the global shift toward more stringent regulatory stances on data privacy and protection.
Now, media and marketing professionals weigh in on the potential impacts of the decision and its implications for the industry.
Part of a larger cultural sea change
Arielle Garcia, chief privacy officer at UM Worldwide
It is worth noting that among the FTC’s reasons for the rulemaking is the assertion that in the absence of concrete rules, “firms that are careful to follow the law” are “at a competitive disadvantage” and could benefit from the level playing field enabled by clear requirements that the FTC would be empowered to enforce for first-time violations.
This is particularly salient as marketers and the broader ecosystem navigate amplified public discourse and a rapidly evolving landscape on the heels of Roe v. Wade’s reversal, the Office of the Director of National Intelligence’s investigation into national security risks posed by advertising technology and the Consumer Financial Protection Bureau’s interpretive rule clarifying expectations of digital marketing service providers such as big tech companies for complying with consumer financial protection laws.
The rulemaking process is lengthy by design – so while specific impacts will take time to materialize, the commencement of this process serves as a welcome catalyst and yet another reminder of the importance to the entire ecosystem of driving to durable, responsible solutions that align to consumer and regulator expectations and mitigate risk of harm – intentional and inadvertent – to individuals.
Kelly Anderson, senior vice-president and head of data privacy and compliance, Emodo
With the fate of the American Data Privacy and Protection Act (ADPPA) still in question, the FTC put forth a notice of proposed rulemaking that includes many of the key points present in the ADPPA that will impact the ad ecosystem. These include a focus on cross-device tracking, advertising to minors and data minimization that have been an interest to the FTC for years. The FTC also focused on potential civil rights violations in the targeting of protected characteristics that could expose vulnerable groups to predatory offers or deny these same groups of critical services which are also included in the ADPPA bill in the House. The longer timeframe for the rulemaking process gives the FTC time to see what happens with the ADPPA in Congress while making steps to fill that gap if required.
With the Commission’s focus on targeted advertising, we will see the FTC’s notice expand the definition and treatment of personal information and address every aspect of the real-time bidding process. This could provide the addition of new industry frameworks that will address the requirements in both regulatory actions similar to the Interactive Advertising Bureau’s Transparency and Consent Framework in the EU and the California Consumer Privacy Act’s Compliance Framework. Publishers and marketers will need a higher level of due diligence and discernment in their ecosystem partners … to ensure they have sound data protection and privacy compliance. Since much of the user information is collected by the publisher apps, ensuring other entities in the real-time bidding process use the data appropriately will require a stronger focus on reducing risk in their trading partners and not getting caught in costly enforcement action. Setting up due diligence processes for trading partners requires setting up a program to assess the risk each partner presents and what evidence of a sound privacy framework is required to adequately mitigate.
Brian Mandelbaum, chief executive officer at Klover
The potential ruling … from the FTC is critical to the future of marketing, advertising and broader media. The onus and responsibility to protect consumer data has traditionally been on the companies that hold that data, but with no clear rules and regulations, companies have run afoul. It is imperative that the FTC enacts clear and strong guidelines with how businesses can collect consumer data to make it harder to misuse and abuse a person’s most prized possession — their personal data.
Companies like Google, Apple and Microsoft are making concerted efforts to eliminate tracking through cookies, while adtech companies are out there developing cookieless solutions to enable tracking without storing data. But without streamlined and consistent laws from our federal government, consumers won’t have confidence in businesses that their data is safe.
As the industry continues to take strides toward zero-party, consented data tactics to strengthen protection of consumer data, these regulations being instilled on a federal level will aid in pushing these strides over the finish line.
A time for marketers and publishers to innovate
Mark Pearlstein, chief revenue officer, Permutive
It’s no surprise that the FTC is looking to step in here as data has shown that nearly nine in 10 consumers are already more likely to spend money with a brand that makes a commitment to protecting their personal data versus one that doesn’t. If big tech is reluctant to put customer privacy first, as we’ve seen with Google’s delays in third-party cookie deprecation, does the FTC really have a choice?
Now is the time for advertisers and publishers to lean in and lead the charge to restore consumer trust. In fact, publishers already have the answer for advertisers in the powerful first-party data and relationships they have access to. The challenge is being willing to step out of the comfortable methods and embrace privacy-forward solutions that build consumer trust and safeguard against violating future FTC regulations.
Tony Weber, chief data officer, Wunderman Thompson North America:
[This is] just a starting point, and it is crucial that brands focus not just on what they cannot do but rather what they should do with the data they acquire and act upon. Approaching this challenge with a clear understanding of and commitment to the ethical use of consumer data is foundational to building and ensuring trust between consumers and the organizations they engage with. We are encouraged by this action and hope that the agency will be bold in its advocacy for consumer rights and continue to strengthen the rules in place to protect them.
Nadia Gonzales, chief marketing officer, Scibids
First things first: the industry is already reacting the way it should have when the EU’s General Data Protection Regulation and the California Consumer Privacy Act kicked in — starting to embrace technology that allows adtech to be used in privacy-preserving ways (because that technology already exists).
But this new FTC … initiative signals that this embrace of privacy-first technology in adtech needs to speed up. At this point, behavioral targeting techniques are going to be made obsolete one way or another. It's time for an enabling path in adtech — one that rises above the confusing, contorted, cookie-filled ecosystem that we currently wrestle with as consumers, publishers and brands.
Going too far?
Doron Gerstel, chief executive officer, Perion
There is no doubt that data capture and monetization have gone too far and have alienated consumers and provoked regulators. Nonetheless, it is never a good thing when regulators overreact and overcorrect, creating negative and unanticipated reactions. It’s the law of unintended consequences. It is rarely a social good to radically upend or corporately disfigure entire business models, when what they require is sensitive and effective precision adjustment. The risk is when a matter becomes ideological — which then overrides good policymaking. Consumers continually say that they want ads and content — and it is increasingly hard to tell them apart — that are meaningful and relevant. If someone with celiac disease wants to see ads for new gluten-free products, the FTC should encourage good public health measures.
At the same time, technology and innovation can be privacy's friend, and use totally anonymized, cookie-free data to assess interest. Sensible and progressive regulation would require that all digital ads inform consumers when their clicks are being captured and stored, and when their privacy is being fully protected. The FTC needs to encourage innovation, protect privacy and encourage growth. ‘Trade,’ after all, is its middle name.
Paul Kelly, chief revenue officer, A Million Ads
‘Personal information’ is a loaded term and [planned rulemaking] of this type can have unintended consequences. People don't want their bank details stolen — but that's not what advertisers are looking for. They want to know what you buy. Removing that signal will inevitably mean two things: a race to find a reasonably reliable and compliant replacement or proxy signal; and a modest re-balance of advertising investment from lower funnel 'buy now'-type campaigns that are prevalent on social to other areas of the funnel (and therefore channels).