Kerry-McCain Bill May Be Best Online Marketers Can Hope For

If online marketers have learned anything, it’s not to depend on big government to solve big problems.  In fact, oftentimes it seems big government legislates and regulates to make the business environment even more challenging than it already is.

Now the Kerry-McCain bill (written by two of the most unlikely senators to collaborate), officially known as “The Commercial Privacy Bill of Rights Act of 2011”, attempts to regulate online privacy in a way that refutes the FTC’s suggested “Do Not Track” mechanism, which it said it wanted late last year.

Any bill that deals with online privacy is already in a no-win situation. It inevitably will be challenged by two opposing forces for different reasons. On the one hand, privacy advocates always seem to want legislation to go much further in protecting the rights of consumers. On the other, those representing online businesses always seem gravely concerned about any attempt to put barriers in the way of high-impact marketing.

So how does the Kerry-McCain bill shape up? Privacy advocates like the fact that the bill wants opt out to be prominent; in fact, the bill would compel website owners to allow users to opt out of data collection when employed for behavioral ads or transfer to third parties. Users would have to consent to the use of sensitive information, and they would have access to such information so they could make corrections or delete it if desired. Businesses using personal data would have to explain why they want to collect it, and companies could only collect data that is needed to make a transaction or deliver or improve a service.

Online marketers will like the bill for one simple reason: It does not endorse the concept of “Do Not Track,” at least not at the federal level. Instead, the Kerry-McCain bill allows the issue to remain with individual Web browsers. Marketers will also likely be happy to hear that the bill does not give consumers the right to sue companies for abusing personal data; instead, action against a company could be taken only by state attorneys general or the FTC.

A potential “Facebook loophole” in the bill is the exemption related to companies that gather data through others (i.e., Facebook fans), but maintain an “established business relationship” with a customer. Social media marketers therefore seem to get preferential treatment.

While some privacy advocates think the bill falls short, Consumers Union and the Center for Democracy and Technology joined eBay, Hewlett-Packard Co, Intel, and Microsoft to praise the bill, according to the Wall Street Journal. The Interactive Advertising Bureau (IAB), however, “said the bill gave too much discretion to the Federal Trade Commission.”

David Card, writing for GigaOM, cites two key potential effects of the bill that impact the online marketer:

  1. There are those online publishers, says Card, who “might be perfectly happy” to forgo behavioral targeting across the web, instead promoting contextual targeting and sponsorships. Card notes that web portals will benefit, since the bill “lets publishers follow and target a user within their own site.”
  2. Card points out that the bill effectively “favors search advertising over display ad formats” because of the way it restricts behavioral targeting. While data companies may have to tighten up their contracts with content sites, third parties could potentially create anonymous groups of customer subsets with user information.

In the end, this is not a perfect bill (very few are), but it may have enough concessions to both sides that it could actually be enacted into law. And because it doesn’t mandate “Do Not Track,” the Kerry-McCain collaboration may just be the best online marketers can hope for.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

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