Category: Yahoo!

Thoughful Dutch Documentary on

We urge readers to view this very excellent 50-minute 2006 VPRO documentary on Google. “Google Behind the Screen” addresses many important issues, including open access to information and privacy. Brewster Kahle of the Internet Archive is especially thoughtful. Via YouTube.

It’s also interesting to see how so many Google executives and staff don’t want to acknowledge the conflicts the company has as its online data collection and interactive ad business evolves.

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IAB and its Proposed Privacy Guidelines: Will Fail to Effectively Protect the Public

So relieved where some in the interactive ad business when they read the FTC’s staff proposed privacy principles released last month that commentators described the reaction as the industry had “dodged a bullet” and “breathed a sigh of relief” [“FTC Online Ad Targeting Guidelines: Industry Breathes A Sigh Of Relief”].

Now Paidcontent describes plans underway by the IAB to offer “privacy standards,” via a “15-member working group,” that includes Time Warner, Microsoft, Yahoo! and others [“Online Ad Industry Groups Take Steps To Self-Police”]. According to the January 4, 2008 article by David Kaplan “[T]he IAB task force will address issues of consumer notice and choice, in terms of deciding the context for selecting opt-in or opt-out.”

IAB lobbyist Mike Zaneis says in the article that “[T]he level of appropriate choice needs to be flexible…consumer regulation will prove to be more efficient and powerful than government regulation.” Zaneis considers the campaign against Facebook that resulted in some modest–and ineffective in my view–changes in its data collection system as an illustration of “consumer regulation.” It’s clear that the IAB is incapable of developing a policy that will protect consumers. Anyone who understands the contemporary dimensions of the interactive marketing industry–and has the public welfare in mind–should recognize what is required. The IAB will not be taken seriously if it can’t deliver the truth (it’s so far failed to protect the public from troubling online lead generation practices, for example. See our November 1, 2007 FTC filing). Yahoo!, Microsoft, Time Warner and others on the committee should lead–and not follow–advice from the IAB that will lead to prolonged political conflict–in Europe, in Congress, at the FTC and FCC, and with the incoming Administration.

Real governmental rules are required–including measures that effectively protect every consumer and also address vulnerable groups and sensitive marketing issues. The IAB’s old school Beltway mentality will likely give online advertisers a bad name. Where are the ad industry’s thoughtful leaders who can help steer the IAB in an honorable direction?

The Interactive Ad Bureau: Its Political Posture is a Liability for the Advertising Industry

On December 14, the head of the U.S. Interactive Advertising Bureau–Randall Rothenberg–wrote a commentary for the Wall Street Journal (“Facebook’s Flop” sub. required) that will be used by graduate students someday as an example of what shouldn’t be done to help an industry address a political crisis. Using old cliches, scare tactics, name-calling, the piece reflects a real failure on the part of the IAB to address an important policy issue that affects everyone–including families. It also shows an inability to recognize concerns about online privacy in an historic context. Such an approach may be useful for rallying some of the old guard. But more sophisticated advertisers and marketers will recognize that the online ad industry doesn’t benefit from embracing such an approach.

So instead of saying that there has long been a concern about online privacy, including for children, we are called “anti-business groups.” Instead of admitting that advertisers and marketers are shaping the new media system so it can better track and target us all, the IAB head claims “the consumer is in control.” Instead of admitting that it was the request made by my group and others for the FTC and the European Commission to investigate Facebook’s “Beacon” system, it says that it just took Moveon to force a (partial) retreat (anyone who has political savvy recognizes it was the combination of Moveon’s organizing, the raising of public policy concerns, and advertiser skittishness that led to the Facebook change). The commentary claims we are calling for “the banning of behaviorally-targeted ads.” But almost everyone else recognizes that we have called for meaningful privacy safeguards for behavioral and interactive marketing practices that would protect consumers.

Finally, the oldest canard in the business is used, claiming that without advertising all the “free” content online would disappear. “Advertisers are paying for it,” it is said. Nothing about how consumers ultimately pay for all this–including now their loss of data, privacy and autonomy.

Anyone with insight into where we are historically with interactive media and marketing should recognize that the privacy and marketing related issues must be honestly dealt with. Old style lobbying may show some muscle, but will backfire. Here’s hoping 2008 will bring the gift of better reflection at the IAB–to its officers, board members, and members.

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FTC to Online Ad Biz: We Really

That’s the message I get from reading the commission’s majority report on the merger. Despite their protestation that they read a lot and interviewed people, it’s evident the FTC staff–and more troubling a majority of the commissioners–don’t have a clue about the online ad business they are supposed to be overseeing. Frankly, until CDD and USPIRG came in and brought the commission up to date, they didn’t have much of an understanding about behavioral targeting. We tried to help the commission since the proceeding began to get up to speed, sending them the data and offering contacts. Here, by the way, is an excerpt from a letter we sent the commission last week (December 10), recapping in writing what we had supplied them electronically over the months:

“Point 3: The combination of the metrics derived from the combination of the Google’s and DoubleClick’s “database of intentions” will trigger an unfortunate, anti-competitive, and economically harmful online advertising market structure. As the “Global Ad-Serving Leader,” DoubleClick explained in a 2006 presentation, its “Ad-impressions” have increased by 70 percent since 2005 (that year it served 1,346,149,954,854 such impressions). Each day, the company serves “8 billion Search, Display and Rich Media Ads.” Among the benefits of DART for Advertisers (“the number one choice for a 3rd Party Ad Serving Solution”), aside from the “Centralized Online Ad Management” system, was the “ROI Reporting” utilizing “Spotlight Tags [which] track consumer actions from impression to sale/action.” Certainly such data acquisition added to Google’s already-extensive wealth of market metrics and analysis tools (let alone user IP and search history) will help further broaden the already-impassable distance between Google and its closest competitor. Indeed, DoubleClick’s recent expansion of its cross-industry data-collection and tracking services will be a formidable anti-competitive advantage for the company. It’s new “Floodlight” system “combines the functionality of a spotlight tag with the ability to act as a universal tag for all other tracking tags, regardless of ad network.” If such a merger is approved, the Floodlight services will also reward Google with a way to track “post-click conversion…on a real-time basis across multiple ad networks with whom DoubleClick have no direction affiliation. The data advantages from DoubleClick’s operations, including such acquisitions as Falk, will provide Google a treasure trove of metrics that will only add to the anti-competitive network effects. If the FTC has not examined the IP-related analysis performed for DoubleClick by such clients as Digital Envoy and Quova, it should do so. How Google plans to incorporate this system, we would argue, is something that must be addressed.

The integration of the Google and DoubleClick data centers will also provide a far-reaching advantage (and, once again, raise the consumer privacy protection issue). In 2006, DoubleClick touted to clients its “Massive…Technical Infrastructure, featuring

• 640 Terabytes of storage
• 964 Gigabytes of log files processed each day
• Serving approximately 8 billion ads daily
• 17 Data Centers Strategically Placed Around the Globe

By the third quarter of 2006, DoubleClick had 30 Media Servers based in Chicago; 62 AdServers and 15 Media Servers in New Jersey; 62 AdServers and 30 Media Servers in New York City; 124 AdServers and 45 Media Servers in Ashburn, VA; 15 Media Servers in San Jose, CA, and a company-operated “backend system” in the Thornton, CO area. The company also had 118 Ad Servers through its International Data Center operation, including Sweden, United Kingdom, Germany, France, Japan, Taiwan, China (Hong Kong), and Australia. DoubleClick’s control over the database “log files” on its adservers that it collects and maintains for its clients provide it with a first-hand understanding of how the individual bits and patterns of data work most effectively for their clients, the vertical and cross platform content business, and finely-focused consumer sets. This is “cookie-level” information that DoubleClick—and potentially Google—can operationalize for their own anti-competitive activities.

We admit we are not experts about the range of Google’s clearly impressive data-storage and -analysis operation. But the melding of the two systems will clearly pose even greater challenges for competitors who will require the scope and range of such processing services. Google has, according to one recent published study, “anywhere from 100,000 to 165,000 or more servers…. Google data centers—now numbering about two dozen… come online and automatically, under the direction of the Google File System, start getting work from other data centers. These facilities, sometimes filled with 10,000 or more Google computers… are concentrated in North America with other data centers located in Switzerland, the Pacific Rim, and Beijing.” While Google shouldn’t be penalized for its cutting-edge development of servers and data centers, the manner in which they are combined with DoubleClick’s existing system must be part of the antitrust analysis.”

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FTC Fails to Protect Consumers, Competition, Citizens and Privacy: Google takeover of DoubleClick

“The Federal Trade Commission (FTC) sidestepped its responsibility today when it approved the merger of two companies whose new, extended data-collection reach will give it unprecedented access to track our every move throughout the digital landscape. By permitting Google to combine the personal details, gleaned from our searches online and YouTube downloads, with the vast repository of information collected by DoubleClick, the FTC has sanctioned the creation of a new digital data colossus. The FTC is supposed to protect the privacy of Americans in the digital age. The excuse offered by the majority of the commission–that consumer privacy can’t be addressed by current antitrust law–reveals a lack of leadership and determination to protect U.S. consumers. It’s clear that this merger—and the ones that follow—will be about companies creating the twenty-first-century’s equivalent of railroad, steel, and oil monopolies in the past. Monopolistic control over consumer data is both anti-competitive and a threat to privacy.

“Despite the FTC’s claims, privacy is most certainly an anti-trust issue. A key component of the online market dominance that companies such as Google have achieved is the aggregation and analysis of consumer profiles, including the merger of far-flung data sets and vast data warehouses that only a handful of companies now have at their disposal.

“Since the merger was announced, CDD has provided abundant evidence to the FTC that Google will now be able to extend still further its market dominance over online advertising. But several commissioners mistakenly believe that we are still living back in the dot-com boom of the 1990s, when barriers to market entry were low. Its analysis of the market is flawed. With today’s decision, the FTC is helping ensure that U.S. consumers will have to live under the shadow of an even bigger digital giant, with a privacy time bomb ticking in the background.”

“Having side-stepped its responsibility to protect both competition and privacy, advocates will press the European Commission to impose the necessary safeguards on the proposed Google acquisition of DoubleClick. Congress too will need to conduct oversight hearings into how the FTC conducted this merger review. Staff privacy principles put out for comment iare not a substitution for adopting specific safeguards for this merger.

“CDD especially commends Commissioner Pamela Harbour, who dissented today, for her insightful and independent critique. Commissioner Jon Leibowitz also raised the critical privacy issues in his thoughtful separate statement.

Even Online Ad Trades See the Google/DoubleClick Privacy Threat!

excerpt: “…If the deal is passed without any restrictions, the combined Google/DoubleClick would have access to the vast majority of online data and could build profiles of users by mining data from them as they use web services and applications, track users across websites with behavioural targeting, and use ad tracking and ad serving data. The fear is that the currently two separate pots of data would be largely complementary and would make Google the Big Brother of the internet, with access to a massive pool of consumer data.”

from: Is Google becoming an online big brother? [sidebar] to:

“Privacy Issues.” Greg Brooks. NMA magazine | Published: 13.12.07 [sub required]

Google is an advertising giant, and is now in the process of using its tremendous resources to expand how it serves the marketing needs of the largest companies, their products and brands. The online medium will undergo a subtle change as the financial interests of marketers help shape how search engines, social networks, mobile services and broadband video platforms serve us. Google’s push to become a more important must-buy for global advertisers is one reason why it’s buying DoubleClick (think about all of DoubleClick’s data collecting and ad serving system of global data centers merging with Google’s sophisticated technology so it can deliver more precision targeted ads wherever we are. That’s one principal reason Google opposes any privacy safeguards related to its proposed DoubleClick takeover).

Google’s now presenting advertisers with research it sponsored, notes Brandweek, that “measured the effectiveness of identical advertising creative for three leading CPG [consumer package goods] brands in the food, beverage and personal care industries across three separate platforms: traditional TV, the YouTube online video environment and ad-embedded click-to-play video. The study found that YouTube (which is owned by Google) and embedded video ads performed just as well as TV spots to aid brand affinity and drive purchase intent. A case study using a campaign for Dove’s Ultimate Clear deodorant showed that ads on 271 of Google’s network Web sites and 121 groupings of sites geared toward the 18-34-year-old female target drove brick-and-mortar sales an incremental 25%. Of particular interest, 96% of that extra traffic represented new customers for the brand.”

As we’ve always said about the new media industry, as a way to warn the public that it would (like broadcasting and cable) be transformed by powerful economic forces into a system that undermined its democratic potential, it’s really about show business and advertising. Unless we proactively act during this transformation period to ensure we have the global democratic digital media system we require.
Source: Google’s Latest Search: More CPG Advertisers. Brandweek. December 17, 2007.

Microsoft Digital Advertising Sales exec: Facebook is social media testing ground for brands

One of the best ways to track what’s in store for us with interactive advertising and digital marketing is to follow what companies are doing in Asia or the United Kingdom. Here’s some insight via Asia Media Journal about Microsoft’s expanded relationship with Facebook. Excerpt follows [and registration is required for the entire article]:

Microsoft (MSFT) set tongues wagging after paying US$240 million for a 1.6% stake in Facebook. The move prompted the same question from a lot of people: why?

The short answer is to see what happens next, explained Erik Johnson, Greater China general manager for Microsoft Digital Advertising Solutions… The multi-million dollar outlay has bought Microsoft an invaluable vantage point from which it can both observe the ongoing development of Facebook, and test out theories about the potential of it and other forms of social media for brands.

“You’ve got to cover all your bases on this,” Johnson says. “… We have a lot of respect for the work they do in building out this social audience, but we also believe that the Facebook experience is still a little too flat, doesn’t have depth. The brand doesn’t stand for enough to provide huge differentiation for advertiser and marketer…The investment we made gives an option for Microsoft, at some point in the future, to work tighter with Facebook, or maybe we’ll just work with them on the advertising side.”

… “If there’s any phenomenon that we may think challenges that, it’s the social networking space. It is an experimentation phase, but we’re going to focus in on social networking versus paid search, and how you differentiate that to the advertiser in such a way that they would pick one or the other….”

source: “Why Microsoft Teamed Up with Facebook.” December 14, 2007. Asiamediajournal.com

The Jones Day, Google/DoubleClick & FTC conflict of interest: a higher standard is required by the agency

Our lawyers are advising my organization on this matter, but I want to remind readers of one point. John Majoras of Jones Day is listed on its web site as the “Partner-in-Charge of business development in the Washington, D.C. Office and is a member of the Firmwide Business Development Committee.” [better read it now before Jones Day removes it!]

In that position, his role raises conflicts of interest with cases involving the FTC, in my opinion. With an issue involving the future of the Internet and the fate of digital media in a democracy, the highest standards are required. Chairman Majoras should have recused herself in this case. Jones Day should not have taken on DoubleClick as a client. Jones Day’s removal of the web pages discussing its role as advising DoubleClick in both the U.S. and EU raises serious questions about the firm’s activities in this merger case. There are so many key questions that must be publicly resolved. When did Jones Day begin representing DoubleClick? When did it announce, via its website, internal communications system, and through its representation with clients, regulators, and other outside parties, that it was representing DoubleClick? Did the FTC staff learn of the relationship between their boss’s husband’s law firm and the merger? (Please don’t tell me that such a relationship, even if spread informally, doesn’t have an impact on the proceeding.)

The public requires the highest standards of conduct from its public officials and leading law firms. This incident illustrates that more must be done to make such institutions accountable. Yesterday’s FOIA request by EPIC asking that the FTC provide it with all records related to its communications with Jones Day in this merger case (and related privacy issues) is a step in the direction of obtaining some sunshine.

Over the last six months, we have been focused on the business and privacy issues related to the Google and DoubleClick merger. We knew a huge lobbying operation was in effect, with Google having added significant political capacity in D.C., and various competitors (Microsoft, the phone companies, Yahoo!) jockeying for position. Our job at CDD was to provide some honest analysis about the realities of the online advertising business–its market structure, goals, and privacy threats. We didn’t have the time–nor the resources–to dig into the political aspects of the issue. Sadly, there was little serious journalism on the deal as well. But last Monday we decided to examine what role Jones Day was playing in the Google merger and learned–via its website–that it represented DoubleClick.

This case illustrates something we all know. That the big money and special interest nature of Washington politics is at odds with the concerns and needs of the average American. As I said, a higher standard is required–for public service, disclosure and intellectual rigor (something we believe the FTC has failed to do in this case and related privacy matters). It’s a story that not going away. That’s why we are writing about it–and keeping a watch as well!

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NYU Legal Ethics Expert Says FTC Chair Majoras should recuse in Google/Doubleclick review

Before we run this legal comment, we want to make something clear. This is about ensuring transparency and accountability in the process. It’s not about political ideology or trying to affect the outcome of a proceeding. There are standards that must be adhered to when one is serving the public (oh, and btw, the idea of disappearing web pages from the Jones Day website reflects, I suggest, their own ethical confusion as well). Here’s an important perspective from today’s Online Media Daily:

“Legal ethics expert Stephen Gillers, a professor at New York University Law School, maintains that there’s no question that Deborah Platt Majoras should recuse herself, regardless of whether Jones Day appeared before the FTC in the matter. John Majoras “stands to gain from the success of Jones Day, especially in a high-profile case like this and, therefore, her decision can affect his interest and therefore her interest,” Gillers said.”

“DoubleClick Law Firm Accused Of Concealing Involvement In Merger.” Wendy Davis. December 14, 2007

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