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    New York Times: Take a Step Closer for an Invitation to Shop

    The New York Times reports on a new advertising tactic that sends text messages to mobile phones. Notably, some advertisers choose opt-in, while others impose  opt-out. I consistently urge the opt-in process, which gives consumers control over their relationships with advertisers. Opt-in puts the burden on companies to have strong privacy and security protections and use limitations so consumers will choose to share their data. Opt-out, the choice of the majority of ad industry players, puts the burden on consumers to learn about what the privacy policies are, whether they protect consumer data, whom the data is shared with and for what purpose, and how to opt-out of this data collection, use and sharing.

    I have joined a coalition of consumer advocacy organizations in urging Congress to enact legislation to protect consumer privacy in response to threats from the growing practices of behavioral tracking and targeting. We need strong privacy-protective federal legislation, which will not preempt state privacy laws and is based on the Fair Information Practices and OECD Principles: collection limitation, data quality, purpose specification, use limitation, security safeguards, openness, individual participation, and accountability. These have ben the foundation of the past four decades of U.S. privacy policies.

    The Times reports:

    Advertisers have long been intrigued by the promise of cellphones, because they live in people’s pockets and send signals about shoppers’ locations. The dream has been to send people ads tailored to their location, like a coupon for a cappuccino when passing a coffee shop.

    Despite the hype, few cellphone owners have received such ads. This year, that may change, analysts say, as companies like the North Face embrace location-based mobile ads. [...]

    The [North Face] campaign was created by Placecast, a location-based mobile ad company in San Francisco. It uses a practice called geo-fencing, which draws a virtual perimeter around a particular location. When someone steps into the geo-fenced area, a text message is sent, but only if consumers have opted in to receive messages. [...]

    Placecast created 1,000 geo-fences in and around New York, San Francisco, Seattle and Boston, cities where the North Face has many stores and areas that get a lot of snow or rain, so the company can tailor its messages to the weather. In urban areas, the fences are up to half a mile around stores, and in suburban areas they are up to a mile around stores. [...]

    To determine a cellphone’s location, Placecast uses techniques including a phone’s GPS signal, location data provided by carriers to companies that sell it to Placecast and information gleaned from triangulating the phone’s distance to cell towers.

    But shoppers should not expect all of their favorite brands to suddenly send alerts as they walk through town. According to Forrester Research, advertisers spent just $391 million on mobile last year — only 1.5 percent of what they spent on interactive advertising as a whole — and location-based ads were just a small portion of that. [...]

    Mobile ads are promising because they are highly personalized, but that intimacy also means the bar is higher for the ads to be well done and relevant, [Forrester Research analyst Julie A. Ask] said. Placecast sends a maximum of three texts a week to avoid annoying people, [Alistair Goodman, chief executive of Placecast,] said. During a campaign last year, 6 percent of people opted out.

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