Why we’re moving towards a permission economy

A new bill has been proposed by U.S. senator Al Franken, which calls for users to be allowed to grant explicit permission for companies to access their location data in order to advertise to them. While users of iPhones for example have to select to allow an app to use their location information, quite what you’re allowing, which includes passing information to third parties, is unclear. What this bill proposes is that there be a stage whereby the user grants consent for their location information to be shared with third parties, which if passed, could have a huge impact for location ad providers on mobiles. The proposed bill would affect both service providers and developers. This is the first time a bill has been proposed in relation to mobile privacy and it represents an important shift as we move to a permission-based economy. The bill is titled the ‘Location Privacy Protection Act of 2011′ and the title alone shows how pervasive local social networking has become and the legal implications this has as the service develops. The bill could set the tone for the new currency of permission, which will become paramount as social media marketing develops.

EU bill passed for permission to set cookies

Interestingly, alongside the proposed bill in the U.S. , a bill has recently been passed in the E.U. that calls for sites to get explicit information from the user to access and use the data. While this has long been standard practice for the likes of email marketers to add users information to email lists, what this bill covers is far more extensive, including express permission when using tracking mechanics such as setting cookies on a site. This permission can be granted either through an explicit popup for example, or it can be implied, as in Germany, that by using a browser that accepts cookies, you are thereby granting information to individual sites to set cookies. Expect a large portion of companies to opt for the latter, as it doesn’t interrupt the user experience or present a possible a barrier to entry.

Taking these 2 bills into consideration together shows that we are steadily moving into a permission-based economy, where more and more emphasis is being placed on individual’s privacy, to protect them from new communication methods that they might not be familiar with. Some may argue that this might have been too long coming – I have always had a problem with the hierarchy system that’s developed through social media, between the tech-savvy who now how to protect themselves online, and those that find out the hard way, or have no idea what information they’re sharing online. With changes such as the proposed location bill possibly coming into place, it shows more emphasis on respecting the individual user and also forces to companies and providers to attain that permission, instead of it being a given. This puts the user even more in control. Up until now companies have been able to use social technologies in pretty much any way possible to reach their consumers, now they could face certain barriers where the user gets to explicitly decide if you can have access to them. It creates a new currency of permission online, that users and brands will begin to trade in.

Protecting information

The location bill is not the only one in this area being proposed, and comes amidst a range of bills that look specifically at permission and protecting individuals. These include topics such as theft of intellectual property and also the Commercial Privacy Bill of Rights Act of 2011, which looks close to being passed. All of these bills are designed with the user in mind, and with the Privacy bill above, expressly concern users’ access to the data that is being gathered about them, or alternatively the power to block companies gathering this data at all. These bills are necessary right now due to the huge influx of information that is being shared and collected online. As we create more and more profiles on social networks and steadily build up the history of information shared on just one channel alone – think of all the tweets you’ve sent since you opened an account – there needs to be stricter rules in place to protect the individual. And here the user has the power and the brand must convince them that they deserve to access that information.

Essentially this means that brands will have to work harder to build up their potential to trade in permission. When the user knows that they have the control, they will start becoming more selective as to who gets to access them. And this is where all companies have a real responsibility to encourage the user to ‘trade’ in their permission. As with the location bill, individuals are only likely to grant this permission if they continually get a satisfactory experience. If the ads that they receive, and the way in which they receive them add to their experience, then they would be given no reason not to grant permission. If they don’t, they’ll have no problem blocking you next time. This presents possibly the biggest challenge that brands and marketers will face. Up until now, access to users online and their data has been relatively easy, if you know the right ways to engage with them. But now the risk of bad marketing means that users might decide to stop trading in permission and block companies from their online experience altogether.

Companies will trade in trust

While the bills in the U.S. have not yet been passed, they are reflective of the measures being put in place to protect individuals and put them higher up the chain of command in social technologies. This is needed now particularly with the rise of location services, as this type of information becomes sensitive in ways we’ve not experienced before. The individual will slowly become more and more aware of the control they have over the ways companies and advertisers can access them, and will have to choose who they give their permission to carefully. As social media usage proliferates, there will be a point at which users have to decide who gets to their information, which is at an absolute premium. This calls for smart marketing of course, but also trust. Clicking on an ad is one thing, but clicking to expressly allow someone to access your information is quite another. And so while the user holds the permission that can be traded, the company or service has the opportunity to build up the trust that is needed for this exchange.

This shift towards the permission economy is good news both for individuals as well as brands. While it places more control for the user over how their information is shared and stored, for the brands, service providers and sites it forces a more trustworthy relationship with users that will end up benefiting the company even more. If you do things correctly and persuade your users or consumers to give you their permission, the actual consumer experience will be more beneficial and you will be interacting with them at a point when there is already a level of investment in your service. This is a challenge, but a good one.