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Time Warner recently acquired behavioral targeting firm Tacoda, in order to expand the data collection and targeting capabilities of AOL and the company’s other online properties. It seems Time Warner wants to also deploy Tacoda technology onto its vast cable network as well, raising serious privacy concerns. Here’s an excerpt from a new interview on imediaconnection with Tacoda founder Dave Morgan, who’s now helping Time Warner better use BT technologies. He was asked whether “Tacoda’s technology can be applied to the cable platform.”

He replied [my italics]:  “We do believe that BT will be applied to cable networks and we have built our business and our technology with that future in mind. What we do on the PC we certainly intend to do for the TV.”

The digital media system permits unprecedented opportunities to collect data about individual voters and target them with more precise ads. Recently, the behavioral targeting firm Blue Lithium launched what it calls a “Voter Network.” Here’s what its press release said [excerpt]: “The BlueLithium Voter Network is powered by the same advanced technologies that are widely used by brand marketers to influence consumer buying behavior. Political and issue-oriented campaigns now have the ability to leverage behavioral, demographic and geographic targeting to reach the most receptive and persuadable voters as they visit hundreds of top sites across the Web… The BlueLithium Voter Network reaches 119 million U.S. Internet users, or 65 percent of the US Internet population, making it larger than Google Search, AOL, MSN or MySpace. The network includes most of the 250 top household-name Web sites. Real-time reporting capabilities, and the ability to modify campaigns on the fly, deliver high levels of control and flexibility, important factors in the world of politics where tides can turn in a matter of hours.”

In a Aug. 29, 2007 Behavioral Insider interview, Blue Lithium’s CMO explained [my italics] that “[T]he rise of behavioral targeting allows campaigns to go beyond demographics or Zip codes to connect with voters based on highly specific interests and passions…Using online behavior, it becomes possible to identify people who are most engaged in and motivated by the issue based on sites they’ve visited, searches they’ve made, offers and ads they’ve been responsive to and communities of interest. In the past, campaigns were limited to looking at demographic markers like education level, age, income and race as a proxy for who might be interested in an issue…Online there’s a far richer pool of data to work with, including sites they visit, petitions, polls, or types of publications — and within [those pubs], specific articles they’ve read.

In addition to browsing, search and previous call-to-action response behavior, we’re finding that new approaches such as online polling on particular issues or special interests are a great way to identify activists. Questions like ‘Do you think the price of gas is too high?’ And ‘What should the government do about it?’ are ways of identifying preferences and profiling attitudes, and can be highly predictive of wider political orientations…We think that, as with Zip code targeting in swing states and districts in 2004, behavioral innovations forged in 2008 will become the new template for future campaigns.”

Before candidates and campaigns embrace such targeting techniques, they must examine the ethical and privacy concerns. Consumers and voters have no idea they are being tracked, profiled and targeted in this way. Protecting privacy in the digital age should be part of every candidates’ platform and position. Behavioral targeting and related interactive marketing approaches require strong federal consumer safeguards. Once those policies are in place, such new media election techniques can perhaps be done in a responsible manner.

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For now, here are key excerpt’s from a recent [8/24/07] Behavioral Insider interview that demonstrate the links between BT, online lead generation, and the interactive ad business. It’s not about sub-prime mortgages, but could easily be.

From the story intro:
“Lead generation is a discrete wing of interactive marketing, and so the ways in which it uses behavioral targeting are a bit different as well. Active Response Group uses behavioral tracking to enhance its ability to gather qualified leads from its banner network.” [what follows are responses from Active Response Group’s CEO]: “We’re able to use BT and retargeting, so when someone registers for a particular form or takes an offer or clicks on a banner, or doesn’t click on a banner — we record all of that, and then, based on the vertical they are clicking on, we will use that to retarget additional offers…One of the most powerful things that you can do is offer either a free trial to begin the dialogue or as a carrot, or some sort of information that’s relevant to that consumer…We consider credit cards a lead because there is no transaction involved other than signing up. We find people will sign up for multiple credit cards at the same time…. And one of the interesting things about that is, behavior is the same in the prime market as in the sub-prime market, although we have stayed away from the sub-prime of late.”

The role which the search engines and others have played in the subprime mess requires serious scrutiny from regulators, policymakers, and consumer advocates. Our blog will be posting a few thoughts on this topic over the next few days. We believe the tracking of individuals seeking such loans and the online process created for them raises many questions, including privacy. For example (and not to single any one company out), but Ipagio.com explains that “Mortgage Lead Generation is dependent on high search engine rankings. Every mortgage website we sell is Search Engine Optimized to insure you get the highest search engine rankings possible in leading search engines such as Google, MSN, and Yahoo.” Ipagio then goes on to discuss how the sites they work with can track users, using Google Analytics: “Google Analytics Implementation – All mortgage lead generation websites come with Google Web Analytics installed. A few things this enables you to track are: who is visiting your site, where they are coming from, what pages the are viewing, what pages they are entering or leaving from, and many more related variables. This analytics suite is one of the most comprehensive on the market and does not cost you anything. There are no monthly, annual, or setup fees involved.” Ipagio–and I’m only using them as an example and know nothing about the company beyond what they say on its site–then explains the “Mortgage Lead Conversion” process: If you are successfully driving traffic to a search engine optimized website, then you must be able to convert those visitors to leads when they visit your website. For a website to be able to convert visitors to leads, it must be authoritative, must provide ample opportunities to gather leads, must be a resource for visitors with useful information and tools, and must have high converting application forms.”

The FTC and other agencies must investigate the online lead generation sector, especially mortgages and credit. To the extent that companies are taking advantage of consumers, such practices must be exposed and stopped. Online lead generation raises privacy issues which require a thorough examination from officials.
PS: We note a description by the New York Times’ Brad Stone in his blog about mortgage lead generator LowerMyBills.com. It raises issues related to the use of rich media, flash, immersion, etc. in such ads. Excerpt: “The notorious ads, with their dancing silhouettes, shimmying green aliens and bizarre boogeying office workers, were once plastered across many major Internet sites, including NYTimes.com. They are now much harder to find.”

Check out this blog for some more info on the ads.

The further privatization of media outlets is an important story, esp. in the context of the current FCC media ownership proceeding. We wonder what those new lobbyists will be working on! Look at excerpts from two stories with almost back-to-back datelines.

1. Hearst Launches Offer For TV Stations. 8/24/07

Multichannel News) _ Hearst Corp launched a $600 million cash tender off for the remaining 27% of Hearst-Argyle Television it doesn’t already own, an effort to take the television station group private.

Hearst already owns 52% of the outstanding stock of Hearst-Argyle, and with its 100% ownership of its super-voting Class B shares, controls about 73% of Hearst-Argyle’s equity and general voting power.

2. Aug. 20, 2007
Hearst-Argyle Hires Lobbyists

WASHINGTON — Hearst-Argyle Television Inc., operator of 29 television stations, hired Brooks, Pierce, McClendon, Humphrey & Leonard to lobby the federal government, according to a disclosure form.

The firm will lobby on legislation that affects broadcast television stations, according to a form posted online Aug. 8 by the Senate’s public records office.

Earlier this month, the buy-out firm where former FCC chairman Michael Powell is a “senior advisor,” Providence Equity Partners, acquired a 10% stake in the new online joint venture run by GE/NBC Universal and Murdoch’s News Corp. Providence contributed $100 million to what is valued as a $1B business. Named for now “New Site,” the venture is aimed at competing with Google’s YouTube and provide a broadband video platform more under the control of major entertainment and advertising brands. Content and ad deals have already been made with Time Warner, Intel, Cisco, Cadbury Schweppes, Esurance, and General Motors. As long as we have former FCC chairs and commissioners–and top staff–going to work for the very companies they once regulated, the Commission’s work will be suspect. With the next FCC opening, advocates should press for a candidate who commits not to escape via the oh, so lucrative, media & communications biz revolving door.

By the way, the role which private equity is reshaping the media business–much to its ultimate detriment, in my opinion–is the focus of an upcoming Columbia University event. Prof. Eli Noam, who organized the session, has a thoughtful piece on the issue that appeared in the Financial Times. Advocates and policymakers must press Congress to hold hearings on the role of private equity in media deals and the public interest. New laws, regulations, and strategies are required to protect democratic governance and accountability of communications in the digital era.

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from Google’s job description listed under “Team Manager, Entertainment Vertical – Irvine or Santa Monica.”

excerpt: “As a Google Entertainment Team Manager you’ll help to provide integrated, cross-platform advertising solutions for media and entertainment clients including TV, movie, gaming, music and web publishing companies. Google has become a leader in this space because we’ve developed effective products and services targeted to entertainment marketers and consumers. You’ll serve as a mini-CEO responsible for developing and implementing strategies to sustain and grow a multi-million-dollar revenue business in the Entertainment industry. This will require you to hire, train and lead your Advertising Sales team, whose job is to sell and provide Google advertising solutions to Fortune 1000 clients and the agencies that serve them… You’ll own the relationships with clients and agencies, which includes targeting, educating and developing new clients to grow the business in unpenetrated territory. You have excellent client-servicing and relationship skills along with the entrepreneurial drive to approach and persuade new and existing customers with large, multi-faceted propositions.”

We also think the job entitled “Brand Accelerator” is interesting. Here’s an excerpt as well:

“The primary objective of the Google Brand Accelerator (GBA) is to become the indispensable partner to advertisers and agencies for building brands online. GBA will allow Google to consistently deliver the most efficient and effective digital platform upon which the world’s leading brands are built. We will connect advertisers’ brand message to the target audience at the highest moment of relevance through innovative and accountable online marketing solutions that offer unmatched precision and scale… Responsibilities:…

• Develop compelling programs in response to RFPs delivered by agency and advertiser clients.
• Liaise with the YouTube product team in the development of new products, verticals and sponsor-able opportunities; deliver marketer/sales point-of-view to help shape these new offerings and maximize revenue…

Google’s public policy blog is promoting its CEO recent speech on “Internet Freedom.” Curiously, Mr. Schmidt’s failed to address the privacy concerns related to his search business (especially crucial given the pending Doubleclick deal. Isn’t privacy such an Internet Freedom, Mr. Schmidt?). Here’s a link to it. It’s worth listening to. But it didn’t really provide the dramatic call for democratic communications the country and world requires. It’s really about making the world’s policy regime safe for Google’s interactive marketing plans–especially mobile.

Here’s an excerpt about the speech on the Google policy blog, entitled:

Eric Schmidt at PFF: what Internet freedom means to us

In the policy arena, Eric offered three specific calls to action. First, he said we need to defend freedom of speech as more speech comes online – and give teeth to the issue by pressing governments to classify censorship as a trade barrier. Second, we need to continue working toward universal broadband access, by government collaborating with industry and making sure that networks remain content neutral. And third, he called on government to be more transparent to its citizens – citing as an example our Sitemaps partnership with the federal government and five state governments.

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The Progress and Freedom Foundation (PFF) is a classic example of a think-tank whose ideological worldview is so distorted, it can’t be relied on to truly provide an objective analysis. Its commentary, “Googling `Monopoly’ (Wall Street Journal, Aug 21, 2007. Sub. maybe required), fails to be an well-informed discussion of the issues raised by the FTC’s review of the proposed Google acquisition of Doubleclick. The commentary was co-authored by PFF’s acting president Thomas M. Lenard and Paul H. Ruben (a professor at Emory University and a PFF senior fellow). Both were FTC senior officials during the 1980’s. Clearly it was written to influence the FTC as that agency currently engages in a serious review of the proposed deal.

The piece urges that the FTC—and the public—dismiss concerns my Center for Digital Democracy and others have raised about issues critical to the future of content diversity, competition and privacy online. Really, PFF should be ashamed for issuing such a commentary without engaging in a more thorough, probing and honest discussion. But sadly, a great many think-tanks dependent on financing from the very companies they write about—Google funds PFF, btw, as do other online advertisers—run afoul of such intellectual problems regularly. (PFF should have disclosed its funding in the Journal piece, which it failed to do).

PFF’s first analytical problem is that it doesn’t really understand the online ad market. Online advertising consists of two principal parts: search advertising and third party display ads. Google wishes to take-over the segment of the market it currently doesn’t control (precisely at the point when the online market is converging the use of distinct data-related application sets, such as rich media and search). But instead of Google competing with Doubleclick and deploying salespersons ready to meet and greet their Fortune 1000 type clients it covets, it is simply buying what would be its most important competitor. When you have the largest search ad firm (in the world) acquiring the number one provider of rich media display advertising for the largest corporate ad budgets, you create an even more powerful online ad gatekeeper. Perhaps PFF should spend less time schmoozing with their supporters, such as at their recent tony Aspen retreat, and review the literature.

Two, PFF completely misunderstands the privacy issues related to online advertising, as incredible—and sad for personal freedom in the digital age—as it sounds. We are talking about unprecedented, moment-by-moment, collection of a vast store of personal information. Used to create profiles that are then developed in a lightening flash into powerful marketing messages that follow individual users website to website. Google and so many other major online advertisers don’t want a meaningful privacy policy where data can’t be collected at all without express prior and informed consent from users; where the use of such data is truly limited to specific transactions approved by the individual. In the absence of privacy protections, consumers will be manipulated by the online ad ecosystem. Once again, PFF officials should spend more time analyzing the literature.

Finally, Mr. Lenard and Prof. Rubin should immediately ask the Journal to run a disclosure that Google—the subject of their commentary, funds Progress and Freedom Foundation. They should make a public apology that they didn’t disclose such a connection. Then, they can—in the spirit of pending `back to school’ time—go and hit the books so they can be truly informed about the subjects they tackle.

PS:  We see that Google was also a sponsor of PFF’s recent Aspen event. Don’t they recognize that failure to disclose is a sin–even by Washington “inside the Beltway” lobbying standards!

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