Digital Signage and Offline Behavioral Advertising

This is a guest post by Harley Lorenz Geiger from the Center for Democracy & Technology

The digital signage industry is rapidly becoming aware of the privacy issues raised by interactivity and audience measurement techniques. There is, however, no industry-wide consensus about how to address those concerns. Some industry figures agree that privacy guidelines need to be adopted if audience measurement and other digital signage applications are to progress. Others, though, have referred to calls for the industry to be sensitive to privacy as “attacks” and have condemned privacy concerns as a lot of hype over nothing. The privacy issue is real, particularly if one considers the big picture of where digital out-of-home (DOOH) media is headed.

 (What is digital signage? Please see my earlier post, Ads with Eyes.)

Internet marketers use various tools to profile consumers and deliver targeted advertisements to them as they browse the Web. Digital signage has begun integrating tools that can track and profile consumers as well, but the difference is that the targeted advertisements appear in the offline world.

The DOOH industry’s burgeoning “2.0″ phase is a mix of identification and interactivity applications used for targeted advertising in various contexts. Among these are mobile marketing, facial recognition, RFID, GPS, Microsoft’s Project Natal, and social networking. Each of these technologies already has the ability to identify individual consumers, track them as they move from place to place, and store detailed information about their preferences and habits. The industry trend is clearly toward greater identification and surveillance capability, not less. This sets DOOH on a collision course with consumer privacy.

There is strong public support for privacy measures that give consumers control over their personal information. UC Berkeley School of Law and the Annenberg School for Communication at the University of Pennsylvania recently released a broad study of consumer attitudes towards behavioral advertising. The study found that two-thirds of Americans “definitely would not” allow marketers to track them online, even if the tracking is anonymous. The study also upended the stereotype that young adults are carefree with their personal data, finding that 86% of young adults don’t want tailored advertising based on online tracking, and 90% reject it if it is based on information gathered about their offline activities.

The Berkley-Annenberg study has profound implications for the digital signage industry. Like others who track consumers for marketing, digital signage companies trumpet that audience-profiling systems provide “more relevant content” that “enhances the consumer experience.” Yet the study repudiates claims that most consumers find such practices unobjectionable. Ethics aside, it seems imprudent from a brand loyalty standpoint to use behavioral advertising on consumers who do not want it. Instead, consumers should be given greater control over how they are advertised to.

The DOOH industry should integrate credible, transparent privacy standards with its interactive marketing efforts. Consumers should be notified when digital signage units are using measurement and identification technologies. Other privacy safeguards will have to depend on the particular technology, what consumer information the unit collects, and the context of its use. While opt-out consent might be sufficient minimum protection for anonymous facial recognition data reported in aggregate, opt-in is more appropriate for any technology that can uniquely identify individuals or their property, such as RFID or mobile marketing.

By adopting strong privacy protections early on, the digital signage industry can help avoid consumer distrust, the ire of regulators, and the embarrassment of advertisers. It will be cheaper for the industry to integrate privacy into business practices now than it will be to retrofit privacy protections onto existing systems. There’s also the matter of consumer trust: it’s far easier to keep than to win back.

About

The Center for Democracy and Technology is a non-profit public interest organization working to keep the Internet open, innovative, and free. Harley Lorenz Geiger is part of the Staff Counsel at the CDT.