Policy Debate: The Value of Data To Our Economy

What data-driven marketers do is so visible and important to the economy and consumers that we are at risk of overzealous regulation.  DMA is at the front lines of the policy debate for protecting our data-driven lifestyles and the business of data-driven marketing.   With the launch of the Data-Driven Marketing Institute  (DDMI) “think tank” last year, we provide a platform for this type of vital research to inform and shape policy debates in Washington and beyond, engaging industry, policymakers, the press and consumers in conversations about the responsible use of consumer data and how to ensure that the data-driven future remains bright for everyone.

Rachel Nyswander Thomas, Executive Director of the Data- Driven Marketing Institute led a panel at a DMA policy symposium discussing the findings of a new study, “The Value of Data: Consequences for Insight, Innovation and Efficiency in the US Economy,” commissioned by DDMI and authored by professors John Deighton of Harvard University and Peter Johnson of Columbia University.

Panel participants were:

  • Jason Bier, Chief Privacy Officer, ValueClick
  • Pam Dixon, Executive Director, World Privacy Forum
  • Stu Ingis, Partner, Venable, LLP
  • Jessica Rich, Director, Bureau of Consumer Protection, Federal Trade Commission.

” The point of doing the research study is to have the facts, so that we can have a conversation about the value of data-driven marketing and the potential harm from heedless regulation,” Rachel said.

Jason agreed.  ” We follow the ‘privacy by design’ approach that the FTC encourages, and it’s good for our business model.  We only take in data that we need, it’s not PII by our definitions and it helps us maximize our business with advertisers and small businesses, and allows us to follow the principles about good data practices.  We take a business approach using a scalpel and not a sledgehammer when it comes to responsible privacy practices.”

Nothing in the study is inconsistent with having reasonable privacy protections, said FTC director Jessica. “For example, California has high innovation and no one has more regulations than California,” she said.  “Although I mostly agree wtih the study findings, it seems to set up a false conflict that if any regulation is imposed it will be cutting off the entire DDME, and that is not so.

“Many of the protections we have been seeking have been basic common sense protections:  Don’t lie, be transparent, provide reasonable security, give choices and honor them, give thought to the data you are collecting and don’t over do it, and be careful about who you sell data to,” she said.  “These protections will not impede the business model or stifle innovation.”

As a general matter, notice, choice and transparency are not problematic, Stu replied.  “However, the things that do wind us back are around limitation of transfers to third parties which require express consent (like the one that has been pushed in Europe), focusing on marketing data rather than other sensitive data (like health or financial data) which puts an onerous restriction on business, or a push to encourage opt-outs as if the use of data is inherently bad.”

What scares consumers is not marketing or behavioral marketing, but issues like identify theft and cyber security, Rachel  said.  What can we do to address privacy concerns around the real issues, she asked the panel.

“Consumers care about what impacts the way they live.  Privacy is a fundamental human value, and the fair protections are not going away,” said Pam of the World Privacy Forum.  “However, privacy must be re-imagined.  As we move from an analog to digital architecture, that creates an entirely new arena for privacy.”

Privacy is an important  global value, but it’s not unprotected, Stu from Venable replied. “There are 25 Federal laws that regulate privacy directly in specific areas of distinct harm.   There can and will be more and they need to be granular in what harms they protect.”

Finding out the right ways to provide transparency about data is a core topic of the policy discussion. The Value of Data study identifies 650 companies that fuel the economy, and the AboutAds.info behavioral targeting service includes 150+ companies.  Clearly, that is a range of companies and business models and interactions with consumer data.   Rachel asked, How do we create transparency and recognize the many varied consumer benefits and interactions with business?

“Sometimes it matters and sometimes not,” Stu said.  “You don’t need to know how an airplane flies to get the benefits of air travel.  We have to measure transparency  needs around the specific business uses.  The resources would be better spent by narrowing the issues down and tackling them one by one in specific guidelines.”

“What has to happen is coming forward and having a fact-based conversation,” Pam said.  “I support a web-based portal, as a unified opt-out portal, but I think the “data brokers” are going to need to be seen as a complex set of companies with various and non-consistent business models.”

FTC’s Jessica noted that they have a data broker study in the works.   “The idea behind having a ‘data broker portal’ is that many data brokers are completely invisible to consumers and no one knows they exist.  Some are consumer facing and also sell data.  We want to bring into the light entities that are not invisible to consumers but are creating packets of information on consumers,and affect the types of offers and services that consumers get.

“Privacy is very consistent with innovation,” she concluded.

Privacy can sell, but it must be tied to education and recognize that privacy is a very individual thing, Jason said.  “We must educate consumers if we put a choice in their hands and the more people who make a uninformed choice will harm the economy and the value for all.”

 

 

 

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