Marketing giants form coalition on privacy concerns

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A coalition that includes top executives at 16 leading marketing companies is throwing its considerable muscle behind an effort to assuage consumer privacy concerns.

The chairmen and CEOs of such companies as Procter & Gamble Co., IBM Corp., AT&T Corp., Sony Corp. of America and Ford Motor Co. are backing the marketing industry's most unified initiative on the privacy issue because of concerns about its impact on digital commerce. P&G and IBM are the lead backers of the initiative.

The Privacy Leadership Initiative will push improvement of industry privacy practices and run an ad campaign to let consumers know how they can protect personal information.

"It's to let the American public know that the marketing industry, under some pretty impressive CEOs, is committed to finding a consumer-friendly, user-friendly solution to privacy," said Mike Donahue, exec VP at the American Association of Advertising Agencies. The Four A's is one of several trade associations in the coalition.


The initiative will look to speedily replace the oft-reviled Internet "cookies" that collect information from Internet users with a more consumer-friendly version, according to several members.

"It is important to establish a climate where consumers know what is happening and they are providing no more information than they wish," said P&G Chairman John Pepper. "We view the Web as an opportunity to customize, to bond with consumers, to deal with consumers in a whole new way." He added the company felt that if it didn't act, "the climate of distrust could increase."

"Dell has always been a leading advocate of protecting consumers' privacy," said Michael Dell, CEO of Dell Computer Corp. "The launch of the Privacy Leadership Initiative is an important step in ensuring consumers have the confidence to use the Internet to its full potential."

However, the scope of the effort extends to offline privacy as well. "The concern is that the online environment has created anxiety and people are becoming cautious," said H. Robert Wientzen, president of the Direct Marketing Association.

Top executives in the coalition include C. Michael Armstrong of AT&T, Michael D. Capella of Compaq Computer Corp., Kevin O'Connor of DoubleClick, Paul Schaut of Engage, Christos Costakos of E-Trade Securities, Daniel A. Carp of Eastman Kodak Co., Tom Newkirk of Experian, Jacques Nasser of Ford, Gordon S. Black of Harris Interactive, Louis V. Gerstner Jr. of IBM, Craig R. Barrett of Intel Corp., Jim Rutt of Network Solutions, Nobuyuki Idei of Sony, Terrel B. Jones of Travelocity, and Messrs. Pepper and Dell.

Associations in the initiative include the Four A's, Association of National Advertisers, DMA, European-American Business Council, Information Technology Industry Council, Internet Advertising Bureau, National Association of Manufacturers and

The group's formation is announced today in page newspaper ads headlined "Keeping your trust requires new solutions." Weber McGinn, Arlington, Va., created the ads.


Members of the initiative outlined five initial priorities:

* Marketers will quickly identify existing privacy tools and create new ones that empower consumers, yet be provided at reasonable cost.

* Marketers would attempt to eliminate some confusion about privacy policies by developing a common set of definitions and so-called best practices, roughly akin to the Federal Trade Commission's guides for environmental claims.

* Marketers will examine existing research on privacy and undertake new studies. They will also look at the economic benefits of targeting.

* Marketers will push other companies to comply with existing laws, adopt policies that meet all four elements of privacy as set out by the FTC and enter into self-regulatory or "seal programs" that guarantee compliance.

* Finally, marketers will launch an education campaign in the fall that will include TV spots that explain steps consumers can take to protect their privacy. The Privacy Leadership Initiative is raising money for what could be a $20 million to $30 million campaign. No agency has been named to handle the campaign.

"We want to create an environment where consumers have the knowledge, confidence and trust in the marketplace so they will take maximum advantage of the benefits with responsible companies," said ANA Exec VP Robin Webster.

* ews of the coalition's formation drew a cautiously optimistic reaction from one privacy critic.

"It's truly a case of the devil in the details," said Marc Rotenberg, executive director of the Electronic Privacy Information Center. "The key to the industry initiative is whether it is about public relations or privacy protection. If it is privacy protection, it is responsive."


The initiative comes as pressure increases on Congress to act this year on privacy. Last week, after a U.S. Senate Commerce Committee hearing on privacy, aides to Sen. John McCain (R., Ariz.) said he will proceed with privacy legislation this year, although they declined to provide details. The Senate Judiciary Committee is to consider a second bill this week. In the House last week, a proposal to create a privacy commission that would report in 18 months was approved by a panel of the House Government Reform Committee and is due to be considered by the entire committee shortly.

Marketers fear privacy legislation that reaches either chamber could be subject to numerous amendments that would curb lucrative marketing practices. But one coalition company denied its involvement is related to such concerns.

"This is not tied to legislation," said Harriet Person, director of public affairs for IBM's governmental programs office. "Any law that is passed is not enough. There has to be a contribution from the private sector."

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