NEW BLOG: Apps exist for everything from gaming, to tracking health and fitness. They augment reality through real-time overlays and add another screen to some of our favourite sources of entertainment. And for a large portion of these applications, they’re funded by targeting advertising based on user data.
Data-driven app economics are still very young and there are no clear standards about how data is collected or used. While technical standards may be in the distance, there are calls for user education and disclosure to lead the way. One proposed solution is to develop a kind of data ‘nutrition label’, similar to those found on food containers.
This would illustrate to a user the types of data being collected and how it is being used to support the app in an easily digestible format, which would then allow the user to make an informed choice about the apps they use.
But what are the benefits to the app owner themselves? Is this just a kind of data-collection tax to innovative businesses, or do the app developers have something to gain as well?
The benefits of transparency
Research from the beginning of the desktop browser-based AdChoices programme indicates that 61 per cent of UK users believe it is important that companies tell them how they are collecting and using information about them; and 54 per cent agree that when brands are transparent it makes them feel better about those companies.
So there are gains to be made in terms of brand reputation when clear disclosures are part of an app. This is especially relevant as companies attach their brands to apps for marketing purposes — every major retailer and many large consumer brands have offerings specific to their stores or products.
And there are more tactical advantages than reputation.
Consider the tracking companies deployed across five different apps owned by an international consumer brand.
There are 12 unique data collection scripts that are deployed, but one — Flurry — is used by more than one app. This app developer is subject to consumer concerns about data sharing — but isn’t effectively sharing data even among its own applications. Disclosure standards would force internal auditing, and begin the process of implementing more effective data practices.
Similarly, consider the third parties deployed by a branded app from leading American sports entertainment company WWE. Over 50 distinct technologies are deployed on a single application – spreading the user segment for this app pretty thin.
This is behaviour that’s usually reserved for a content provider seeking the most lucrative audience for its advertisements – not a publisher who controls an interesting dataset and can be judicious about its partners in marketing that dataset.
This may be a considered strategy for this app developer, but again, the process of active disclosure would mean these tactics are audited, and that checks and balances are weighed each time a new technology is added.
Business benefits
So a sound strategy for privacy disclosures, even ahead of some industry or legislative standard in the mobile arena, is advantageous for a number of reasons.
Not only would helping to establish a disclosure standard result in a more technically sound standard than if the details are left to a governmental body, but consumers have demonstrated that transparency directly enhances their perception of a brand.
Further, in the chaotic world of digital mobile marketing, dedicated disclosures are an excellent catalyst for auditing data collection practices. Whether an organisation could benefit from more tools deployed in a more efficient manner, or by trimming the number of partners with which they work, disclosing those partners is an excellent place to start.
The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members.
Andy Kahl is senior product strategist at privacy tool provider Ghostery.
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