Why Privacy Standards Need to Catch Up With the Rapidly Advancing Internet of Things

In his day job, Peter Bihr is a strategic consultant who provides big tech companies and the occasional government with policy work, research and product advice around Internet of Things (IoT) technology and other emerging platforms. But earlier this year, Bihr set out to solve one of the many problems that marketers face when using the IoT to advertise: Consumers had no idea which devices they could trust to securely and transparently handle their personal data. With the support of a German nonprofit called ThingsCon and a research fellowship from Mozilla, Bihr created a heptagonal Trustable Tech Mark awarded based on consistent criteria that would indicate to consumers whether the companies behind their smart speakers or connected appliances should be considered reliable stewards of sometimes-intimate information about their lives. The right to advertise based on your signals and behaviors is a tight thread to needle. “As a consumer, it’s basically impossible to find out which devices are OK—you can only go by brand name essentially," Bihr said. "I’m not going to lie; I wish bigger organizations had tackled that a long time ago. But they didn’t, so here we are." As Bihr helps to establish one universal standard, smart device makers, software platforms and advertisers are grappling with a multitude of problems on how to monetize a world in which all manner of everyday objects may have the capacity to sell consumers something. With the IoT economy still in its infancy, many see it as the ideal time to set standards and practices in an attempt to avoid the same consumer trust issues that currently plague the rest of the digital marketing world. “What we want to be most careful not to do is to replicate the opaque and corrupt supply chain that everyone complains about in the existing digital advertising ecosystem,” said Gartner digital marketing analyst Andrew Frank. “There’s a whole litany of concerns—privacy, security, the control over the experience itself, concerns over concentration of the market.” [kickout id="1"] IoT advertising has been a topic of conversation at forward-thinking industry conferences, like last week's Consumer Electronics Show, for years now. But actual use cases still remain mostly in the conceptual or experimental stage, according to industry experts. One issue is that, like many early-stage tech markets, the space remains fragmented and advertising capabilities vary between different platforms and manufacturers, making universal standards difficult. "Internet of Things as it exists today is not the kind of interconnected network of data that it can eventually become—all of the data is siloed by the actual thing and the manufacturer of that thing,” said Sarah Mannone, evp at digital marketing agency Trekk. “Because we’re in this phase right now where these devices are sort of disjointed and we don’t have this interconnection yet ... now is really a time for advertisers to establish themselves as it relates to standards around privacy." Mannone said marketers should develop a set of ironclad consumer privacy commitments now that are incorporated clearly into website copy and marketing materials. A longstanding reputation for data security will become all the more important when consumers are deciding which brands they want to allow into the most personal aspects of their lives. Some of the companies that are diving into IoT ads say the key to holding consumer trust is to approach them more as sponsored products that integrate with the functionality of a given device. Sal Dhanani, co-founder of location services company Telenav, which rolled out an in-car advertising platform earlier this year, said each of the promotions the company runs on its systems must offer more than simple display ads—whether it’s a gas pump coupon or deal listings from a nearby grocery store. "I tell the team, 'You’re not putting ad units anywhere—you’ve got a normal product experience where you have the natural element to fulfill a use case,'" Dhanani said. "The question is how we decorate that experience such that there’s more value to the user—we don’t even call them ads; we want to offer a ‘promotion’ or ‘predictive help.’" Frank said he has faith that advertisers and their trade groups can learn from mistakes made in the digital advertising world and better self-regulate early enough to avoid losing consumer trust. But if they fail to do so, he expects GDPR-style regulation will eventually grow to encompass the IoT space. “There’s a lot of activity that’s focused on trying to clean up [digital advertising] and make it more transparent and more accountable and so forth," Frank said. "It would be helpful if that were done before we just start to replicate today’s practices on Internet of Things platforms."