“Transparency” is a word that gets tossed around a lot in the data-driven advertising industry, usually because it’s lacking.
Brands don’t know where their ad dollars go. The programmatic supply chain is basically an enormous bowl of pea soup. And principal-based buying is par for the course at the agency holdcos.
But transparency is also lacking in another area: consent data.
(Not so) good gravy
Although most people probably understand in an abstract way that they’re being tracked online, the details are fuzzy. Honestly, the details are fuzzy to me, and I write about this stuff for a living.
Early last week, the Federal Trade Commission, in a mad dash before the administration change in January, announced proposed settlement agreements with two different location data providers – Mobilewalla and Gravy Analytics – over allegations that they collected and sold sensitive location data without consumer consent, let alone consumer awareness that it was even happening.
One location-based audience segment Mobilewalla allegedly created was for women who visited pregnancy centers.
Gravy Analytics, meanwhile, allegedly sold data sets with sensitive characteristics derived from location data, such as medical decisions, political activities and religious viewpoints. According to the FTC, Gravy at times continued to use location data even when it knew consumers hadn’t provided informed consent.
The writing on the wall(a)
Gravy and Mobilewalla join an ignominious list of location data vendors that have been singled out by the FTC over the past two years for their alleged mishandling of sensitive data, including InMarket, X-Mode and Kochava.
The Mobilewalla complaint is particularly interesting, however, because the FTC specifically calls out real-time bidding as a vector for unfair data collection practices.
The FTC accused Mobilewalla of collecting and retaining information from bid requests – including device IDs paired with precise geolocation information – even when it didn’t win an auction. According to the FTC, Mobilewalla would then sell this raw data to third parties despite the fact that exchanges forbid that behavior.
This is rather noteworthy, because it’s the first time the FTC has alleged that collecting and retaining sensitive data from an ad exchange counts as unfair under Section 5 of the FTC Act.
Settling down
As part of its settlement with the FTC, Mobilewalla is banned from selling sensitive location data without “taking reasonable steps” to verify a consumer’s consent.
What counts as reasonable? Well, the FTC says in its complaint that although, as of 2020, Mobilewalla did start requiring partners to certify annually that they had consent from consumers to collect and transfer information, it didn’t implement procedures to follow up and verify those certifications.
For its part, Mobilewalla issued the usual statement one would expect from a company that just tangled with the FTC, noting that while “we disagree with many of the FTC’s allegations and implications that Mobilewalla tracks and targets individuals based on sensitive categories, we are satisfied that the resolution will allow us to continue providing valuable insights to businesses in a manner that respects and protects consumer privacy.”
Gravy Analytics and its subsidiary Venntel, meanwhile, are prohibited from selling, disclosing or using sensitive location data in any product or service and must establish and maintain a program to prevent the future misuse of this type of data.
Location data provider Unacast, which merged with Gravy Analytics last year, did not respond to a request for comment in time for publication.
Sunlight is the best, etc.
So, what happens now?
To be fair, it’s possible that neither of the proposed settlement offers with Mobilewalla or Gravy Analytics are finalized once President-elect Donald Trump appoints a new FTC chair. All signs point to a far less active commission over the next four years, with fewer cases and less enforcement.
Still, the current commission’s categorization of data collection from bid requests as a violation of Section 5 is a meaningful omen.
As the FTC wrote in a post on its technology blog: “The Mobilewalla case shines a new spotlight on the collection and use of data through ad exchanges, the invisible intermediaries that auction off digital space to advertisers.”
Last Tuesday, when the FTC dropped its twin announcements about Gravy and Mobilewalla, I was on LinkedIn reading all the hot takes and comments, as one does.
One comment, which was below a post from Arielle Garcia of Check My Ads, stood out to me. It was from Carlos Diaz Ruiz, an assistant professor in the department of marketing at the Hanken School of Economics in Finland.
He wrote: “It’s incredible how the industry can’t stand almost any form of scrutiny.”
That struck me, because my first thought was, “Yes, but scrutiny is good.” It’s healthy to poke for holes to see where the vulnerabilities are.
It’s also healthy to think about how business practices appear to people who aren’t in the industry.
If you find yourself at a cocktail party this holiday season, and someone asks you the obvious and usually anodyne question, “So, what do you do?” and then, in the process of explaining your job, the other person’s facial expression changes from polite interest to eyebrow-furrowed confusion tinged with aversion – well, that’s an invitation for self-reflection.
🙏 Thanks for reading! And while I have your attention, please check out this critical public service announcement. It contains some very important mews. As always, feel free to drop me a line at allison@adexchanger.com with any comments or feedback.
