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One of the most shocking aspects of the FTC’s two-day “town hall” on online marketing was the failure of the industry to be candid. They didn’t want to provide the FTC–and more importantly, the public–with information about how the business models they’ve developed are designed to tap into our personal data and use them at will without our real consent (and meaningful legal protection for consumers). There is real absence of social responsibility coming from the major companies and trade groups. What we heard from the IAB and DMA repeatedly during the event, in response to calls to protect consumers’ privacy rights, was that the “free Internet” would die without advertising. Such scare tactics reflect a narrow and self-serving mentality about the role of the Internet. `It’s our toy, brought to you by the following sponsors,’ is what they claim. But, our political and social culture as a democracy transcends such a simplistic analysis. A variety of public, nonprofit and commercial roles are needed to help ensure that the Internet and other digital media create a vibrant democratic culture of participation, equity, public health and–yes–economic growth. Such an intellectual failure and self-serving perspective underscores why this is an important public interest issue.

The U.S. requires the development of a legal framework which protects our privacy in an era where all our actions are fodder for corporate and governmental collection and use. We need to ensure that online marketing treats consumers fairly. There are special groups–and concerns–where business as they want it should not happen. The new CDD/PIRG amended complaint filed Thursday is just one of a number of things we will do to advance the public interest in the digital marketing and data collection era.

Let me also point to a very important article by the noted Peter Matthiessen in the current issue of The New York Review of Books. “Alaska: Big Oil and the Whales” is a chilling essay on what the demand for oil is doing to the native people, wildlife, and the land. So much destruction as we wantonly plunder for more oil and gas (including the use “of powerful [seismic] airguns” that “shoot sound waves through the sea floor (causing disruption to the “animal habitats and whale migrations”). Matthiessen also writes that: “Like most coastal Inupiat communities, Point Hope… is faced with the melting of the permafrost under the tundra and the erosion of the coasts; because of Arctic warming, the sea ice is forming too late in the year to suppress the waves that batter the shores in the fierce autumn storms. Shishmaref and Kivalina villages in the Point Hope region have been fatally undercut by storm erosion and must soon be abandoned; their inhabitants are likely to become the first “climate refugees” from global warming in the United States, and others may soon follow… The Eskimo people surely sense that the ground of their ancient culture is eroding on every side and even from beneath them.”

I am not against advertising. But we need to make all the marketing processes underlying interactive advertising visible, transparent, and accountable. I asked one panel during the FTC Town Hall focused on “disclosure” why they couldn’t tell consumers what they told their clients: how their interactive marketing techniques are designed to change user behavior (including encouraging people to spend more money). Not one person answered.

It’s time to go beyond our narrow self-interests, and work together to help make (or try to save) a world worthy for our children and our successors.

From Marketplace, Nov. 1, 2007:

“Teens are growing up in an immersive digital environment. On any given day, they’re glued to their cell phones, sharing videos on YouTube, and hanging out on MySpace or Facebook. These new online social networks are becoming critical tools for adolescent development – encouraging kids to explore their identities, find their voices, reach out to peers and even engage in politics.

But as social networks begin to “monetize” their businesses, the forces of interactive marketing are rapidly transforming them into sophisticated data collection and ad targeting machines. Advertisers are practically salivating over the abundant psychographic and behavioral information that social networking sites can offer. In addition to basic demographics, marketers can glean a wealth of “enormously rich” data. Including personal relationships, ethnicity, religion, political leanings, sexual orientation, or whether a person drinks or smokes. Dozens of new data miners and ad-serving companies have swooped in to “nano-target” and “hypo-target” individual users with personalized ads.

Social networks are just one part of what advertisers see as an expanding “digital marketing ecosystem.” Today’s teens are also being targeted on their cell phones, through instant messaging and in videogames. Marketers are making it fun and easy for kids to create online commercials for brands, which are then distributed widely on the Internet. Companies are crafting one-to-one messages, designed to work at a subconscious level by tapping into an individual’s innermost needs, desires and anxieties.

Most teens don’t realize the extent to which they’ve become part of elaborate, virtual focus groups. The Internet is still relatively young. It would be a shame if we allowed the promise of the new digital media to be undermined by the unfettered growth of invasive marketing. Such trends could turn the online world into a surveillance society.

The loss of privacy is too high a price for reaping the benefits of the Digital Age.”

[I spoke yesterday at the beginning of a two-day hearing at the FTC. There wasn’t time to say my complete prepared remarks. Here it is]:

Exactly one year ago—November 1, 2006—the Center for Digital Democracy and the USPIRG filed a 50-page complaint asking the commission to “undertake an immediate, formal investigation of online advertising practices.” When we met with Chairman Majoras soon after, it was evident from her interest that she recognized we had identified a series of major consumer privacy concerns. Commissioners Leibowitz and Harbour expressed concern as well. Over the last year, I have come to admire the hard work and dedication of the FTC privacy staff.

But we believe the time for fact-finding is over. The commission is the designated federal agency that is supposed to safeguard consumer privacy. It must now act to protect Americans from the unfair and deceptive practices that have evolved as part of what the industry calls the “interactive marketing ecosystem.” As we stated last year, “The data collection and interactive marketing system that is shaping the entire U.S. electronic marketplace is being built to aggressively track us wherever we go, creating data profiles to be used in ever-more sophisticated and personalized “one-to-one” targeting schemes.” This is true today across all platforms: PCs, cell phones, social networks, broadband videos, even eventually TV.

Few members of the public understand this (as the new Annenberg/Samuelson poll analysis shows). They don’t know that when they—and their children—go online, marketers are digitally shadowing there ever move. Interactive marketers—and the technologies being deployed (from behavioral targeting and retargeting, immersive rich media and with new forms of social network profiling)—are helping create a commercial surveillance society. Our every move, interests, even mouse clicks—tracked, tabulated, stored and then used or sold to the highest advertiser bidder.

Yes, online marketers. You can track, collect and use for commercial purposes when someone searches for a health concern—such as their child’s use of Ritalin. But just because you can do it doesn’t mean its right.

Yes, digital advertisers can behaviorally target consumers looking for a sub prime mortgage and sign them up. But just because you can do it doesn’t mean its right.

And, online marketers can eavesdrop on the members of social networks, including the harvesting of their personal profiles for commercial purposes. But just because you can do it doesn’t mean its right.

The online marketing industry is trying to hide behind a number of things, inc. the facetious claim that much of what they collect isn’t personally identifiable. They claim they respect the privacy of children and teenagers. We are given assurances that all these services are to make our online experiences more personalized and convenient. But personalization doesn’t require the creation of a wholesale data collection system. Yes, online advertising plays a critical role for the “monetization” of content, esp. the news, information and culture a civil society requires. But the industries—and its trade groups—have so far failed to provide the necessary leadership to address privacy concerns.

That is why today, CDD and USPIRG are filing an amended complaint. We provide abundant details about new and emerging privacy threats since November 2006. We show how children and teens are the focus of behavioral targeting; how online mortgage loan and lead generation companies have contributed to the recent national tragedy where too many Americans lost their homes; we provide a disturbing window on the target marketing and data collection practices used by social networks, inc. MySpace and Facebook. It discusses new forms of racial and ethnic profiling. We also remind the commission that we urged it one year ago to investigate the already disturbing growing consolidation in the online advertising and marketing industry. A warning that was before the new wave of takeovers including : Microsoft/aQuantive and AdECN; Yahoo!/Blue Lithium and Right Media; TW/AOL and Tacoda, Third Screen Media and AdTech AG; WPP and 24/7; and, of course, Google/Doubleclick.

We want to underscore that the privacy threats arising from the Google/Dclick merger are the gravest—and we urge the commission to act on the EPIC petition.

Just because online advertising is helping paying for the content doesn’t give the industry carte blanche to unleash a wide spectrum of abusive practices. No one is saying you can’t engage in marketing in this new era. But we need rules—not a lawless “wild west.” Some in the industry are offering an implicit fear tactic: suggesting that if you are messing around with advertising you will kill the golden goose of the digital economy and online content. That’s absurd and untrue. What we are saying is we need governmental rules and action from the leading companies to protect consumer privacy. The trade groups have failed to provide any real leadership—which is why self-regulation has failed—and cannot truly work. In addition new online privacy channels run by interactive marketers such as Google should not be propaganda tools—they must foster a broad public debate about the role—and harms—of the online medium.

It’s time for the FTC to protect consumers by fully implementing and enforcing Fair Information Practices, as proposed by the OECD. Unless the commission does this, our privacy—and that of our children—will be increasingly at risk. The time for fact-finding is over. Our data collection and behavioral targeting models are being exported abroad, posing risks to EU consumers (as we explained recently to the Article 29 Working Group). As incidents such as the public exposure of personal information collected by AOL of our searches revealed, the vast gathering of information by marketers also raise concerns about identity theft and fraud.

The question is: will the FTC act to protect the US public and help ensure that the Internet and other online media is a safe environment for communications and commerce.

We wait its answer.

Thank You

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Via SearchEngineWatch: Excerpt: “Is Google moving towards being a total online advertising resource? Absolutely, they have search, analytics, content publishing resources both with AdSense and the newly added YouTube, and now an ad serving platform with video and rich media expertise – but also tracking abilities for the source of the pageviews, and more importantly the ability to monitor behavior across all sources of traffic.

Add DoubleClick and Google now has access to the bulk of the world’s online behavior. Not only search behavior, but anywhere they are controlling the ads. Impression and click counts are not the only thing they gain buying DoubleClick.

They tried to get the world to give them access to online behavior when they bought Urchin and started giving away online analytics. Fortunately the majority of online companies decided to keep paying independent third parties – though Google would have had no problem forcing out all the web analytics companies that needed to have their customers pay for their programs.

The buy of DoubleClick is another end run – sure Google is claiming they will not use this information – bit hard not to collect it – but with each step Google is fast becoming Big Brother.”

“Google, DoubleClick: Myths and Facts.” Frank Watson. October 22, 2007

Take a quick look at Tangozebra, especially its ad gallery. It will help you better understand where Google is headed (as if its 3Q analyst call didn’t say volumes!). DoubleClick acquired Tangozebra last March.

Just an excerpt from Monday’s Communications Daily.

[Verizon lobbyist and former Congressman Tom] “Tauke…confirmed he had visited Google’s Mountain View, Calif., headquarters. Google invited him, he said… “I’m not the business guy, so I’m not going to say that I came away with any sense from the meeting as to where the future is on the 700 MHz auction or other things,” said Tauke, Verizon’s executive vice president for public affairs, policy and communications. “But clearly, when you look at what they do and what we do, there are some great opportunities, as there are with many other companies.” Google wants to get its applications and services such as Google Maps onto mobile phones, and Verizon wants its customers to have access to those services too, Tauke said. “It’s a matter of getting the right devices, having the right protections for the customer and being able to figure out how to use the technology and the new opportunities that are out there in a way that will serve both companies well as well as serve our customers,” he said.”

from: Tauke Hints of Talks With Google Over 700 MHz. Communications Daily. Oct. 22, 2007.

We wrote about the interactive TV company Visible World in our book, Digital Destiny. Backed by Comcast, Time Warner & WPP, Visible World is know for its “IntelliSpot” technology designed to create precisely targeted “customized” TV commercials (based on the information they know about you, even in your household. Among the targeting parameters used by IntelliSpot’s broadband service include zip code, content classification, time of day/day of week, demographics, & same user viewer number. There is also “advanced targeting”  They use “unique” URL’s and “beacons” to measure the impact of the ad ). Now, Visible World has teamed with Doubleclick, in a move which should be viewed in the context of a Google takeover. Here’s the new service described in yesterday’s release:

“The combination of intelliSpot(R) and DoubleClick Rich Media and Video, is designed to provide advertisers with the ability to easily create and monitor hundreds or thousands of versions of their video creative messages and dynamically deliver the exact optimized message to each Web browser across hundreds of Web sites. For example, an automotive dealer group could feature the pictures and addresses of their local dealers within the video seen by end users within a specific geographical area.

“Working with Visible World, we’re able to incorporate some of the best practices from the television world online. By combining the engaging nature of customized video with the advantages of online advertising, our clients are well positioned to enable a whole new era of advertising effectiveness,” said Ari Paparo, vice president of rich media at DoubleClick.”

In what should raise privacy and competition concerns, read how Clickz describes it (excerpt):

“Pairing a history of geographically-targeted ads with an expertise in rich media ad delivery and reporting, DoubleClick and Visible World will combine their platforms to deliver highly-targeted online video advertising to their clients.

The deal links DoubleClick’s DART ad management platform and rich media and video technology with Visible World’s intelliSpot system, which has primarily been used to advertise on cable channels. Users of the premium service will be able to create online video and rich media campaigns managed through the DART system, yet be altered by the intelliSpot technology based on the viewer’s geographic location, to provide specialized content.

“We delivery the granular targeting of the creative message of Visible World through the DoubleClick network, but it simplifies the ad trafficking solution by saying here is a simple DART tag and behind it can be thousands of creative solutions,” said Andy Sheldon, vice president of broadband and wireless at Visible World…As a combined service, DoubleClick and Visible World will have access to one another’s client base, and both company’s logos will be attached to the technology, but campaigns will be managed through the DoubleClick system.”

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