FTC Keeps Data Brokers in Regulatory Crosshairs

Federal officials are keeping the data brokerage industry in their regulatory crosshairs, and another warning shot has been fired. The Federal Trade Commission (FTC) just issued formal letters to 10 companies, alerting them that they may be violating federal restrictions on the collection and sale of consumers' personal information, reported The Washington Post. The targeted data brokers ranged from firms that compile consumer lists for credit offers to a website helping parents screen potential nannies. The list also includes well-known names in the direct marketing business. The FTC letters follow a broader inquiry into 45 data brokers appearing to market information whose use is restricted by the Fair Credit Reporting Act, which regulates how private companies can use personal information. Individuals are supposed to know when data reports affect their eligibility for insurance, credit or employment, and they are supposed to have the opportunity to correct errors. The FTC last year urged Congress to pass a law forcing the data brokerage industry to disclose its practices. The Post could not confirm whether any of the data brokers receiving letters face a full FTC investigation. Letter recipients were 4Nannies, Brokers Data, Case Breakers, ConsumerBase, Crimcheck.com, People Search Now, U.S. Information Search, US Data Corporation and USA People Search. The story did not name the tenth pending confirmation. For more, see the news story at http://www.washingtonpost.com/business/technology/ftc-warns-data-brokers-on-privacy-rules/2013/05/07/2e152c16-b748-11e2-92f3-f291801936b8_story.html

Study: Small Businesses Still Don't Embrace Digital

Big corporations may be rushing into digital marketing, but small businesses are dragging their feet and sticking with the tried-and-true, including direct mail, according to recent research by The Boston Consulting Group (BCG). As reported in Adweek, the consultancy surveyed 550 U.S. businesses with less than 100 employees and found only 3% of their total advertising dollars went to online channels. Compare that with big companies' commitment of up to 16% of the marketing pie to online efforts. The small businesses—including restaurants, hair salons and furniture stores—relied mainly on newspaper circulars and direct mail to lure customers, according to the study. Of course, most of the mom-and-pops had websites, but BCG did not count that as active digital marketing, seeing it as closer to a white-pages phone directory listing in today's digital era. So why the small-business aversion to digital? It isn't because small firms don't get lots of unsolicited digital advertising pitches—20 or 40 a month, remarked John Rose, a senior partner at BCG. But small firms are rightly cautious about shifting dollars to untried promotional avenues, and they generally don't have a professional marketing staff to evaluate online opportunities, pointed out Rose. Instead they rely on peer advice, and too many small business peers apparently have been burned by digital forays. If digital marketers want smaller clients to come aboard, they are going to have to come up with a strategy to get "the right offers" to clients "in a way that allows them to figure out what’s right for them" is Rose's quoted conclusion. For the full article, go to http://www.adweek.com/news/advertising-branding/small-businesses-are-slow-digital-party-148029