Two consumer advocacy groups plan to file an FTC complaint about mobile marketing and its emerging practices. The advocacy group Digital Democracy filed its complaint in conjunction with U.S. Public Interest Research Group.
According to an article in MediaPost, Jeff Chester, founder of Digital Democracy, says, “We’re filing a complaint to force the FTC to take a proactive stance. Mobile ad companies incorporate the same problematic business practices that we witnessed with PC-based broadband marketing, including behavioral targeting and profiling techniques — except that this time they know your location.”
The main focus of the complaint is behavioral targeting in general since this type of data is often captured without first obtaining consent. The Federal Communications Commission already prohibits marketers from sending text message ads to consumers without their opt-in consent, but some other types of mobile ads — such as wireless application protocol banners or search ads — are not similarly restricted.
The Kelsey Group forecasts the mobile marketing segment to grow from a current $33.2 million to $1.4 billion by 2012. Our forecast also predicts the mobile Internet population will grow to 91 million by 2012, making the mobile advertising market too attractive to ignore.
The goal of the FTC complaint is to place restrictions on mobile advertising while the category is still developing. The downside is that these types of restrictions are the very things that have kept the mobile advertising industry from developing in the U.S. With search growth slowing, mobile advertising is the next logical platform for growth and investment particularly by the major portals, meaning it will be a hard-fought battle to maintain the freedom to experiment with advertising formats and data gathering techniques to determine what consumers will and will not accept on their mobile handsets.