Weighing In On ‘Do Not Track:’ Are Privacy Regulations The Right Answer?

Published: May 17, 2011

As you know, there have been many new draft laws put out over the last year that are trying to put control of how consumers’ information is used. For the record, I like that, but most of the laws seem deem target marketing as a bad thing when it’s not. What is happening here is that lawmakers are jumbling a bunch of issues in the Internet world and hoping to address them in one bill, when in reality they need to be addressed in separate regulations.

Many of the privacy bills being introduced are very broad in their definitions and are being proposed by individuals who don’t necessarily understand Internet advertising and marketing. In these bills, the definitions of what Internet advertising and marketing are is unclear. There is a need for regulations to make it mandatory to get consumers’ permission to use things like financial and healthcare data, but I have strong issues with proposed regulations that require permission to us an IP address or to drop a simplistic first party cookie on a consumer’s Web browser.

Consumers today don’t necessarily understand that their positive Internet experience is powered by non-harmful tracking technologies that deliver relevant and targeted emails and online advertisements based. These “cookies” also give the consumer the ability to try things out for free like Angry Birds on their mobile devices without having to pay for the whole thing. If privacy bills are allowed to pass in their current forms then marketers will lose the ability to garner advertisers to pay for things like freemiums for the consumer. This will also drive up the cost of most BtoC products to make up for the difference in lost advertising dollars.

What is even more disturbing is the unwillingness of government representatives to fully recognize the ongoing and successful self-regulatory manners of today’s top online companies or coalitions like the Direct Marketing Association (DMA) when it comes to online advertising and marketing. Of course, we can see the need for third party control and sharing permissions for the consumers but that’s because companies aren’t consistently offering consumer the option to opt-out of tracking situations.

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The government should really be focusing on are security regulations for consumer data. While pushing for privacy regulations on consumer data can be good if written properly, what lawmakers have not shown is that a data governance (privacy) issue really exists in most cases. What they can prove though is that there are a ton of security issues in which proper measures are not been taken to secure consumers data allowing for the true issues to occur, hacking. Putting privacy regulations into play only determines how consumers give up their data and how you use it. We know how those processes work through time tested self-regulations.

With government imposed regulations, when a law is put into place it becomes irrelevant in a short amount of time because of new technologies. Once technology makes a law irrelevant, it can take many years to updating it. With self-regulations you have the ability to immediately impose protections and processes onto your memberships and customers without all the long discussions. At the same time, you can take self-regulations models and without bending the rule impose them to still allow for industry growth and innovations without stifling it.

Privacy regulations aren’t bad in general but if we need them we should take the necessary time to look at how they will be applied to many business models to ensure we are not overriding the economics or stifling years of growth and prosperity for advertisers and marketers. Let’s ensure that customers are protected, but in a manner that still gives them the services they want, at the price they want it, and still allow for our business to grow using all that is available to us on the Internet.

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