Nuts & Bolts - Eye on Privacy : Can We Walk the Talk of Self-Regulation?October 2012 By Gwenn Freeman
As we look toward the end of 2012, one of the more troubling issues facing marketers is the focus the Federal Trade Commission (FTC), Congress and the media are putting on data brokers. While marketers are only one segment of the data broker debate and cannot resolve this issue alone, we must be proactive in defining our segment and restating and reaffirming our self-regulatory practices. If we are all following our stated "best practices," our arguments for continuing to self-regulate will carry more weight.
I continue to believe that we need to do more to differentiate consumer marketing data from all other types of consumer data compiled by data brokers. The Direct Marketing Association's (DMA) Guidelines for Ethical Business Practice (PDF) require that marketing data be used only for marketing purposes. If we are all complying with that guideline, our data broker segment is much easier to define. When the data use goes beyond list selection, ad targeting and segmentation, and wanders into decisions on employment, ability to pay and prioritizing service, then the data use can no longer be classified as marketing. Our ability to clearly set boundaries on the use of marketing data and our willingness to comply with those boundaries is critical.
The FTC has specifically asked data brokers to create a centralized website to "identify themselves to consumers and describe how they collect and use consumer data." No one has been able to define data brokers, much less bring them all together to create a single website to describe data collection and use.
The DMA does require that a database compiler, which they define as "a company that assembles personally identifiable information about consumers (with whom the compiler has no direct relationship) … for marketing purposes," should, if asked, provide consumers with an explanation of the nature and type of information it collects. Perhaps it's time to expand this requirement past just parties without a direct consumer relationship and require that any marketer with consumer data be prepared to disclose this information when asked.
The FTC also requested data brokers to "detail the access rights and other choices they provide with the respect to the consumer data they maintain." No participants in the marketing ecosystem, whether they are providers of consumer data or individual brands, to my knowledge, offer direct access to individual records. This isn't how marketing systems operate. Reputable marketers, however, offer consumers a choice about participating in the process.