Tips from the FTC for Mobile Marketing

Mobile applications are critical to today’s marketing environment.  The number of Smartphone users is skyrocketing.   The Pew Research Center indicates that 45% of adults and 66% of Americans aged 18-29 have a Smartphone and 25% of adults own a tablet.   According to a survey by ReturnPath quoted in Joel Book’s Exact Target blog, nearly half of all emails are read on mobile devices.  What this trend means is that marketers need to get savvy about all aspects of mobile marketing, including best practices in privacy and security.  Mobile marketing has expanded to include SMS/text messages, in-app advertising, mobile action codes like QR codes, mobile coupons, check-in promotions, mobile payments or other aspects of digital wallets, emails, telemarketing calls to a mobile devices, RFID tags and much more.

Mobile Marketing has its challenges because fewer ads display on mobile devices and users are still somewhat reluctant to purchase on them (although they seem to be more likely to purchase on tablets rather than Smartphones).  All this will certainly change as users become more familiar with these devices.

I recently attended the Promotion Marketing Association Marketing (PMA, recently rechristened BAA, Brand Activation Association) Promotion Law conference in Chicago which covered some practical tips for launching mobile applications.  The Federal Trade Commission (FTC) is only one agency involved in the oversight and regulation of mobile marketing is charged with protecting consumers and suggests these tips for implementing mobile marketing applications.

      1.  Tell the Truth.  Tell the truth about what your app can do.  False or misleading claims anger users and can land you in legal hot water.  If you have health safely or performance claims (i.e., our pedometer will help you lose weight), you need to back these up with solid scientific evidence.  Disclosure must be ‘clear and conspicuous,’ which is not always easy on small screens.

      2.   Respect Privacy.  The mobile application, unlike the company’s legacy applications, may offer the chance to incorporate privacy concerns from the beginning, which the FTC calls ‘privacy by design’  The FTC suggests only collecting the information you need, storing it securely and disposing of it when no longer needed.  Some other privacy tips include:

a.       Being transparent about data practices

b.      Honoring published privacy practices

c.       Protecting Children’s privacy by adhering to the Children’s Online Privacy Protection Act (COPPA) and getting parental consent before collecting information from children under 13 years of age.

      3. Offer choices that are easy to find. Tools that allow for choices in how to use the app and have privacy settings, opt-outs and other ways to control their information is good business practice.  The standard should be ‘clear and conspicuous;’ make privacy choices easy to use and then follow through on your promises.

You can get more information from the “Marketing Your Mobile App Get it Right from the Start” and other documents available at business.ftc.gov.  How hard do you think it is it to follow these guidelines and implement a successful mobile app?

By Debra Zahay-Blatz.
You can find Debra on Google+ and Twitter as well as LinkedIn.

Multichannel Marketing Class June 1: Database Marketing and the Multichannel Challenge

Joe DeCosmo, EVP from The Allant Group in Naperville, addressed us on the difficulties of developing and maintaining customer databases to support multichannel marketing. Companies want to address the customer individually with an offer that is relevant and timely, but often don't have the data structure to support that effort. Ryan underlined these problems in his presentation, where he said that his own company has a customer database but does not really use the information to market across channels or just to mine the exisitng data in stand-alone marketing campaigns. Joe outlined a mapping process that we have talked about in class whereby customers are increasingly using a multiple channel approach to purchasing and how companies can get started developing databases that integrates across all customer interactions. Joe suggested that we use the term interactions instead of classical CRM. This terminology would be consistent with our approach in this class, where we have emphasized the importance of interactive marketing from the first day. Joe also stated that the ROI on multichannel marketing is anywhere from $4-8 for every dollar spent.

We talked in my portion of the class about The Loyalty Effect and the Net Promoter score as developed by Frederick Reichheld and the eighty/twenty rule and moving customers up a value pyramid as outlined by Arthur Hughes. We then had a discussion on data privacy and security. Privacy law has been evolving in this country and the internet has made everyone more concerned about data privacy in particular. The European Union has a stricter policy and an explicit right to data privacy. In the U.S., we focus on self-regulation and guidelines, such as the FTC Guidelines, but we still have legislation in the area, such as CAN-SPAM and the Do-Not-Call legislation. Privacy is an emotional issue. Consumers are concerned about privacy but don't really want to go through the effort to select the exact offers they would receive from all their vendors. We talked about a privacy policy as a way to help consumers feel more comfortable about doing business with a company, as well as using privacy seals from a trusted organization on the web site. We also looked into what the future might hold as technology allows marketers to target ads during our private conversations and as we are entering stores and shopping malls.