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Online ad industry to introduce self-regulation

UK: The online ad industry is rushing to introduce self-regulation for location-based marketing to allay privacy concerns around the billion-pound sector. Industry bodies, the Direct Marketing Association (DMA), Internet Advertising Bureau (IAB) and Institute of Practitioners in Advertising (IPA) are launching initiatives to guide advertisers keen to invest in the sector, worth GBP 1.8bn  by 2015, according to analyst company ABI Research.

The move follows Facebook’s UK launch of its location-based platform Facebook Places earlier this month and the growth of platforms including Foursquare, Gowalla and Vouchercloud.

They also come as mobile payments using near-field communications technology (NFC) from companies such as Orange and BarclayCard are prepared for launch before the end of the year – a potential catalyst for NFC as a marketing channel.

However, fear among consumers that sharing their location amounts to a loss of privacy is the biggest obstacle the ad industry has to overcome, according to industry experts.

CAP guidelines about location-based advertising are unclear to marketers eager to take advantage of the potential opportunities, so the drive to update the guidelines is an attempt to ward-off regulation.

Mark Brill, CEO of text marketing specialist Formation and chairman of the DMA Mobile Council, said, “Location-based services have major privacy concerns and it’s important that brands are sensitive to them. Pick up any tabloid newspaper and it’ll have a piece about how big an invasion of privacy Facebook Places is.”

The new DMA guidelines are aimed at increasing trust between brands and consumers regarding sharing of location information, added Brill.

Sienne Veit, mobile commerce development manager at M&S and a DMA Mobile Council member, agreed that brands are tentative about how they should use location-based services. “We’d like to target around location and want to address issues that are unclear, such as targeting people who haven’t initiated contact by visiting our mobile site, for example,” she said.

“The future of mobile marketing will have a significant location-based element to it, because it’s the unique feature,” said Nigel Gwilliam, head of digital at the IPA. “Google says that one-third of all mobile searches have geographical element to them.”

Gwilliam added that the challenge facing all advertisers was balancing innovation with respecting people’s privacy. “It’s time for testing, but you have to be very careful just how you do it,” he said.

Source: Marketing Week