Exhorting advertisers to provide consumers with greater notice and control—particularly with regard to native advertising and cross-device tracking—Commissioner Julie Brill of the Federal Trade Commission explained that traditional truth in advertising principles apply to 21st century technology.

Speaking at the AdExchanger Industry Preview, Brill said it is clear that advertising is one of the most technologically advanced and data-driven industries in the economy today. "More than ever, advertisers leverage data to reach customers, personalize experiences, and predict consumer behavior," she noted. While the use of such data certainly has its benefits, Brill expressed concerns about consumer privacy and autonomy.

Despite the 21st century context, "the principles the FTC employs to protect consumer privacy and choice date back over 100 years," Brill told attendees, and the agency "has long believed that consumers must be given reasonable notice and control over how their personal data is collected and used—and that applies regardless of how many zettabytes of data we are talking about."

The Commissioner focused her remarks on two specific topics: the tracking of consumers, including cross-device tracking, and native advertising.

With regard to tracking—using sensors to follow mobile phone signals to detect individualized or aggregated traffic patterns as a consumer moves through a store or mall, for example—the bare minimum required of businesses is to give "relevant information about retail mobile location tracking when it is happening," and permit consumers "to exercise some control over its use," she said.

Brill referenced the FTC's enforcement action against Nomi Technologies to add that the choices provided to consumers must also be truthful. In that case, the company's privacy policy stated that it would "always allow consumers to opt-out of Nomi's service on its website as well as at any retailer using Nomi's technology," but the promised in-store opt-out mechanism was not available for nine months, the agency alleged.

Cross-device tracking magnifies privacy concerns, Commissioner Brill said, and it "is not clear that consumers are meaningfully informed about the cross-device tracking that's happening even today." She discussed the "troubling" findings of a recent agency look into cross-device tracking, where the FTC examined the top 20 websites in five different content categories. Although cross-device tracking mechanisms were employed at many of the sites, only a few provided an opt-out for consumers.

Lacking options and control, consumers will take matters into their own hands, as demonstrated by the rising popularity of ad-blocking technologies, she said. "It has surprised me that, so far, few advertisers seem willing to take up the offer to limit data retention, or to otherwise ensure consumers that they are treating their data properly," Brill said. "It's hard for me to believe that serving an ad while limiting data retention isn't better than serving no ad at all."

Turning to native advertising, the Commissioner reminded advertisers about the FTC's recent policy statement on the topic. She emphasized that advertising messages should be easily identifiable to consumers as advertising and that "consumers should be able to recognize that content is sponsored before actually interacting with the content."

The policy statement "has roots in our past enforcement and policy efforts," where we address the tactics of door-to-door encyclopedia salesmen who misled consumers to think they had won a prize to get in the door or unsolicited e-mails with misleading header information designed to get consumers to open the message, Brill explained. "We will look at the entire ad to evaluate the net impression that the ad conveys to reasonable consumers," she said. "We also look to whether the consumer is misled to believe that a party other than the sponsoring advertiser is the source of the advertising."

In conclusion, Commissioner Brill noted that despite the explosion in technological sophistication in the advertising industry—and the agency's own technological capabilities—the principles of truth in advertising (consumers' choice over their data and privacy protection) still apply.

To read Commissioner Brill's prepared remarks, click here.

Why it matters: "I urge you to continue to explore the creation of innovative and usable tools to address consumer concerns about privacy," Brill told her audience. "Not to find ways to work-around consumer choice, but to provide consumers with something they clearly want: to see advertising that respects their privacy and that they can trust."