Last week, I talked about the future of location-based advertising, which often involves mobile tracking of consumers to determine which ads to launch. In this article, I’ll talk about some ethical concerns that have arisen as companies start to roll out location- tracking ad campaigns, and what your business can do to maximize privacy and minimize the creep factor.
Location Tracking In Action
More and more, businesses are able to use mobile data from users’ phones to figure out their shopping patterns, down to which routes they take through stores and where they tend to pause. Using a combination of WiFi access points and unique device IDs, customers’ every movement can be tracked down to the meter as they shop.
From a business perspective, this is super useful information to have. In the article linked above, for example, a bakery owner uses this type of location tracking to see how many people stop and look at window displays, and how many then enter the shop. Based on that information, the owner is better able to create displays that convert to sales. It’s a pretty smart strategy.
However, on the customer side, there are some privacy concerns, and location tracking doesn’t sit well with everyone.
A Violation of Privacy?
Even though the unique device IDs, WiFi information, and newer Advertising Identifiers used to track potential customers’ movements don’t capture or store any private information, the targets of such tracking are understandably concerned. One problem is the general sense that someone’s watching your every move – understandably unsettling.
Another issue is the consent problem. Location tracking systems rarely, if ever, notify shoppers that they’re being tracked, and most systems automatically opt consumers in. This has created a somewhat sticky legal situation for location tracking systems. Last December, for example, the Federal Trade Commission updated the Children’s Online Privacy Protection Act (COPPA) to require parental consent for geo-location data collection for mobile device users under the age of 13.
And outside of the legal sphere, a sense that users don’t want to be tracked inspired Apple to include a Limit Ad Tracking option in iOS 6. Users who take advantage of this option on their phone or other device will no longer receive targeted ads based on Advertising Identifier (i.e., location tracking) information. Clearly, many users are either not interested in targeted ads, or have concerns about the safety of their personal information.
What You Can Do
Location tracking is on the forefront of demographic data collection and analysis, so it’s worth your time to figure out how you can use it in a way that your potential customers feel good about. If your company is thinking about using location tracking, consider the following tips for minimizing the creep factor.
- Alert customers to the fact that they are being tracked, whether through a mobile push notification or a posted sign. Allow them to opt out of the tracking system if they are uncomfortable with it.
- Alternatively, create an opt-in program. In this case, customers can be active in your data collection, rather than feeling like they’re being spied upon.
- Be clear about what data you’re collecting. Customers who understand that the data you collect will not be able to identify them in any way will have fewer privacy concerns than those who believe you are storing their personal information.
- Inform customers about how you will use the data. Many individuals will feel better about you collecting data that will only be used to improve their shopping experience rather than data that will be sold to a third party.
Don’t miss out on opportunities to utilize the potential of location tracking. However, do make sure that you do so ethically, so that you don’t lose the trust of new and loyal customers alike.
Is your business using location tracking to guide your advertising decisions? How are you dealing with the potential privacy concerns?
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