Cross-Device Tracking: Could New Guidelines from the FTC Create a Hurdle for Businesses?

Now that cross-device tracking has become a commonplace tool for better personalization in marketing, the Federal Trade Commission is keeping a closer eye on the practice via several “recommendations” released in January.

Marketers are reaping the strategic (and ultimately financial) benefits of connecting, measuring and analyzing customer activity across smartphones, tablets, desktop computers and other devices enabled through the IoT. In fact, by 2015 only 18 percent of U.S. firms were still using a single customer view for most of their marketing. And that’s paying off: Google notes U.S. retailers achieve 16 percent more search ad conversions when including cross-device data, while travel companies achieve 14 percent lift and vendors of consumer packaged goods 11 percent.

“We were talking about the cookie — now we’re talking about cross-device,” advises Brian Anderson on Adexchanger.com. “(It’s) a critical component in the marketplace to provide mass personalization.”

The practice uses both probabilistic (data matching) and deterministic (signed-in usage) methodology to achieve its ends. And a good number of consumers are apparently copacetic with the resulting personalization; one survey shows 90 percent of American 18- to 34-year-olds and 82 percent of those 45 and older strongly value personalized messages. But others believe the process lacks transparency, and many customers are unaware of the ramifications; for example, research shows 55 to 65 percent of Americans mistakenly believe organizations with website privacy policies don’t share user data.

“I think it’s fair to say this area is evolving rapidly and may be … challenging traditional consumer expectations about their privacy,” advises Justin Brookman of the FTC on Adexchanger. “It’s really hard to determine objectively, from the end user point of view, when cross-device tracking is going on.”

In the January FTC report, the government division dictates the following recommendations for marketers:

  • Companies and publishers must truthfully disclose cross-device tracking activity — including categories of data collected, data recipients and how the data is shared and used — to all customers, publishers and business partners involved. The end user must be given the option of enabling opt-out tools, siloing activities or stopping use of a website, app or service altogether.
  • Data users must stop referring to email addresses and usernames (hashed or otherwise) as unidentifiable, since they can be tracked and thus qualify as personal information.
  • Data users must offer customers “clear and conspicuous” choices in how their cross-device activity can be tracked, then act on those choices on a device-by-device basis.
  • Companies must obtain specific customer permission before conducting cross-device tracking related to sensitive subjects such as health, financial, children’s products or exact geolocation information of adult consumers.
  • Data users must maintain high security standards to avoid “future unexpected and unauthorized uses of data,” storing only data relevant to their specific business purposes.

While the FTC expects some industry self-regulation by trade groups the Network Advertising Initiative and the Digital Advertising Alliance, businesses not adhering risk violations of longstanding FTC privacy regulations.

“While (the report) does not have the force of law, and is not binding precedent, it offers insights into the staff’s views on this technology, and on steps those involved with it should take to avoid deception or unfair practices,” states a summary in National Law Review.

Some analysts believe the recommendations will decrease use of cross-device tracking.

“You’re going to see a couple of companies get dinged on this, unfortunately, in the next six months,” advised digital privacy expert Alan Chappell in a September 2016 report. “Perceived risks to privacy and security, even if they never happen, can undercut consumer confidence necessary for the technologies to meet their full potential, and could well hinder adoption.”

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