Calling the current advertising climate “a technological revolution at the intersection of marketing and consumer data,” Director of the Federal Trade Commission’s Bureau of Consumer Protection Jessica Rich discussed the importance of protecting the privacy of consumers who make online transactions.

In the new era of advertising, “timing and context are everything,” Rich told attendees at the AdExchanger Industry Preview event. “Advertisers are looking to connect with the right consumers, at the right time, and in the right context.”

Targeted advertising benefits consumers, Rich acknowledged, and added that the FTC has “no interest in jeopardizing” such ads that help support online content and services that might not otherwise be available or for which consumers would have to pay.

Despite its benefits, “targeted advertising raises consumer privacy concerns, plain and simple,” she said, particularly as online tracking becomes increasingly more invisible due to technological advances like device fingerprinting and enhanced tracking of consumers across multiple devices.

What should advertisers do?

Rich made the business case for privacy, noting that she has seen an uptick in companies that use privacy choices as a selling point. She praised industry efforts like the Digital Advertising Alliance and Network Advertising Initiative to establish privacy codes of conduct for online tracking.

She also set forth three “privacy rules for the road” featuring privacy by design, increased transparency, and “usable” choice. Companies should build in privacy protections at every stage of the product or service development, she advised, emphasizing the importance of deidentification.

“[B]olster sound technical strategies for de-identifying data with a strong commitment and effective policies not to re-identify it,” Rich suggested. “This means that companies should publicly commit not to seek to re-identify the data and should, through contract, require the same of those with whom they share data.”

Increased transparency should be a goal for advertisers. Privacy policies should be easy to read, include “just-in-time” notices, provide key information and set forth the choices consumers will have at the time they provide data or make other decisions. These choices also included practices that would come as a surprise given the context and the consumers’ overall relationship with the company, Rich said.

She also noted four key pitfalls that marketers should avoid. “[M]ake sure that any claims you make about how you collect, use, or share data are truthful and complete,” Secondly, “be careful about who you do business with.”

To be meaningful and non-deceptive, the information and choices given to consumers must cover all tracking practices, not just a subset. And finally, advertisers should “be very careful about marketing using sensitive data.” Avoid it altogether she suggested, but at the very least, provide an opt-in.

To read Rich’s prepared remarks, click here.

Why it matters: Rich repeatedly emphasized the importance of transparency and providing choices to consumers, some of whom know nothing about cookies or even know that they are being tracked at Internet sites. The FTC isn’t interested in cracking down on online tracking, she explained, but instead wants companies to be open and honest about how they are collecting and using data. “[T]he Commission’s central goal is to offer consumers truthful information and meaningful choices as they navigate the marketplace. And we have learned that when companies explain the ‘value proposition’ to consumers and give them such choices, many consumers choose to continue to engage, or to allow use of some of their data, rather than opting out altogether. Giving consumers choices about their data is essential to building the trust necessary for this marketplace to flourish. In the long run, hiding the ball will erode consumer confidence, which benefits no one.”