Wireless Web in watchdog’s crosshairs: Proliferation of mobile marketing garnering increased interest

While mobile content is expected to contribute increasingly to wireless carrier revenue growth in coming years, it is also attracting increased scrutiny by the Federal Trade Commission, plaintiffs’ lawyers and a pugnacious industry watchdog known for taking on corporate giants and influencing public policy in official Washington.
Jeff Chester is not a household name in the cellphone industry. But that could soon change. For the past two decades, the broadcasting and cable TV sectors have been forced to confront Chester on programming, consolidation and other hot-button issues. Since 2001, as executive director of the Center for Digital Democracy, Chester has focused on marketing, privacy, net neutrality and other emerging issues in a changing world in which broadband is quickly becoming – if it is not already – the most powerful communications medium ever. Chester does not appear to play favorites. Everyone is fair game. Telecom giants like AT&T Inc. and Verizon Communications Inc., which dominate the wireless and wireline markets, are on Chester’s radar. So are the cable TV industry, which shares the broadband duopoly with Bell telephone juggernauts, and Google Inc., the Internet search engine and online advertising king.
Privacy concerns
Now the wireless space – especially mobile marketing – has Chester’s attention.
Chester does not see the transforming industry landscape in a vacuum, but rather views new digital communications and its manifestations – known and unknown – as critical components of a civil society based on free political expression and the unfettered exchange of ideas. His first book, released in January 2007, is titled “Digital Destiny: New Media and the Future of Democracy.”
“The ‘mobile marketing ecosystem,’ as the industry terms it, poses new threats to consumers,” said Chester, one of the speakers at a recent two-day FTC forum on mobile marketing. “Many of the same practices that have raised concern about online privacy – including profiling and behavioral targeting – are being migrated over to what is called the mobile Web.”
Chester wants the FTC from the get-go to safeguard consumers’ interests in the wireless space regarding mobile applications and data collection techniques.
“The FTC dropped the ball when it came to proactively addressing threats to privacy from the online advertising in the personal computer marketplace,” said Chester. “Luckily for consumers, we are still in a fluid period for mobile marketing, where the commission – if it takes action – can help ensure both the public and the mobile industry are each well served.”
Chester’s outfit, the CDD, and U.S. Public Interest Research Group, plan soon to ask the FTC to investigate behavioral targeting and privacy in the mobile Web space. Chester said the upcoming filing will address the implications of the personalization engine from Enpocket, a leading mobile advertising firm owned by Nokia Corp.
Consumers need input
Chester said other companies have developed multi-layered and precise targeting for mobile advertising, which includes such data as gender, age, language, income, and education; country, state, ZIP/postal code and GPS coordinates; behaviors, interests and tastes; the context of voicemail and test messages.
As such, the CDD and U.S. PIRGs intend to amend a 2006 complaint seeking a probe of similar issues in the online world.
Chester played key role in Congress’ passage of the Children’s Online Privacy Protection Act of 1998. He was named as one of the Internet’s 50 most influential people by Newsweek magazine in 1996.
“Mobile services will increasingly be an essential form of communications, including access to news, civic affairs, friends and family, entertainment and commerce,” Chester said. “Mobile marketers – out of view from most policymakers and consumers – are creating what the rules of the mobile Web experience will be for the public. Consumers need to be part of the mobile Web equation, not as passive recipients of advertising and services, but as co-creators of how this new marketplace should be structured.”
Industry representatives and analysts urged the FTC not to regulate a nascent mobile Internet market, especially before any serious problems can be identified.