Privacy concerns and what could be done by the mobile app & advertising industry

Mobile Apps, Advertising and Privacy in 2011 Consumer Privacy is going to be very important. This year there were major concerns raised by consumer groups with lawsuits and massive coverage by well known publications such as the WSJ about privacy issues related to advertising and tracking of consumer data through mobile applications.

Online advertising is behavioral users being tracked using cookies their profiles being generated with browsing and searching patterns. Data about the user is also being mined across the internet to create a in-depth profile, which happens to have too much of personal information. This information is being shared with prospective advertisers. The other concern was the sharing of mobile application data user including user location in mobile apps to third party ad networks. This information may include phone number and unique user ids identifying each user.

Consumer Privacy at Risk

As mobile devices are becoming more common and more ubiquitous, mobile apps and services such as search, advertising etc, get access to more and more consumer information.  Customer privacy is at risk and in both web and mobile applications. With the respect to the online advertising industry, the industry has started self regulation mechanism which we believe has had some effect in protecting consumer privacy, unfortunately FTC and consumer privacy advocates don’t seem to agree.

FTC’s Do Not Track

The Federal Trade Commission has proposed a universal “do not track” mechanism that would allow people to choose whether they want Internet companies to collect information on their browsing habits. The idea is that users would be able to choose to have their browser not to track them for advertising purposes. It is not clear whether this proposal includes mobile services and mobile advertising but we believe that this should serve as a wakeup call for mobile ad networks, app developers, advertiser, agencies and mobile ad networks.

Mobile App and Advertising Ecosystem

What could be done by the mobile apps and advertising ecosystem so that the consumers don’t feel spooked?.  There are various choices on the table

a) Self regulation with choices to the consumer to opt out is one great option that should be immediately initiated. This could be done with a common website or this could be offered as a choice in every application like the way browsers today have choices to reject cookies being saved.

b) Standards could be set where industry players agree to to limiting information collected, users tracked or the way information is shared or restrict the quantum of information being shared.

c) Key information must never be tracked or shared: Key identifying information about the user (ids, phone numbers etc) should be completely left untracked.  This could be a part of a standard or an adhoc initiative that could be immediately implemented.

Some of these steps may lead to some stifling of ad revenue dollars or tech companies may feel that innovation is being throttled but in long term this could have obvious benefits as more consumers would openly adopt newer services without the fear of being tracked.  This could also help the industry avoid expensive lawsuits.

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