Category: Yahoo!

Online Ad Expenditures to Surpass "All Other Media by 2011"

Just a reminder–if it isn’t obvious–that the “new media” world is fast upon us. We should be focusing more of our policy and creative energies to make sure the digital landscape provides the U.S.–and the rest of the world–with the kind of democratic media system civil societies require. If we don’t use this brief period of transition to build a more humane, diverse, and informative media system, we will set back the path of democratic growth and diminish the public health (in the broadest terms). As you will see from this excerpt of a trade news report on the latest study coming from media financial analyst concern Veronis, Suhler, Stevenson, there’s a tremendous amount of money that will be made in the digital field. The time to make sure some of those revenues go to groups who put people ahead of solely a profit-oriented approach is now. Now is also the time to build-out an array of social networks, online video platforms, cooperatively-managed search engines, responsible mobile online marketing ventures, green digital structures, etc, etc. Otherwise, our programming will continue to be shaped by the forces from Sand Hill Road and the LA-NY media communities. Note the changing use of media as well, illustrating a dynamic we should take advantage of. Here’s an excerpt from Laurie Peterson’s recent [8/7/] article in Mediapost:

“Internet Ad Spending Set To Overtake All Other Media By 2011: VSS”

“SPENDING ON INTERNET ADVERTISING WILL reach $61.98 billion, and will surpass newspapers to become the nation’s leading ad medium in 2011, projects private equity firm Veronis Suhler Stevenson in its 21st Communications Industry Forecast released today.

“We are in the midst of a major shift in the media landscape that is being fueled by changes in technology, end-user behaviors and the response by brand marketers and communications companies,” says James Rutherford, executive vice president and managing director at VSS.

At the same time, the consumer migration to digital media–which require less time investment than traditional media counterparts (think 3-minute YouTube clips versus 30-minute TV shows)–has spawned a year-over-year decline in the amount of time consumers spent with media, VSS researchers say. The tally came in at 3,530 hours in 2006, a per-capita decrease of 0.5%. It’s the first time since 1997, researchers say, that such a behavior has occurred.

Consumers are also migrating away from ad-supported media and spending more time with media they support, according to the VSS Forecast. Consumers spent an average of 1,631 hours in 2006 with consumer-supported media, such as the Internet and video games–a gain of 19.8% compared to 2001. Time spent with ad-supported media, such as broadcast television and newspapers, has fallen 6.3% since 2001 to 1,899 hours per person.

“We expect these shifts to continue over the next five years,” Rutherford adds,” as time and place-shifting accelerate while consumers and businesses utilize more digital media alternatives, strengthening the new media pull model at the expense of the traditional media push model.”

CDT’s Privacy “Report”—Full Disclosure is Missing

CDT has long been an ally of the various data collection companies it purports to oversee on behalf of consumers. It’s funded by a number of them. In fact Microsoft’s Bill Gates helped raise money for the group just last March.

The report released today fails to address the wide-ranging privacy threat coming from the major search engines and their advertising clients. It fails to acknowledge that it’s only because of policy-related pressure from privacy advocates—including the FTC complaint filed last November by my Center for Digital Democracy and US PIRG—that there have been modest corporate changes. [As well as the work of these two groups and EPIC in the case of Google’s proposed merger with Doubleclick, and the role of European Commission authorities]. CDT’s report also fails to acknowledge that it’s because of the unprecedented series of mergers in the data collection sector over the last few months, including Google, Microsoft, Yahoo!, AOL [$33.4 billion in the first half of 2007 alone, according to Ad Age. sub may be required.] —and the subsequent US and international regulatory scrutiny—that has created the “pressure” to bring about a few modest changes in data collection and retention practices. Without real advocates pressing—and regulators taking up their demands—we would have no changes at all (as minimal as they are). The marketplace’s approach isn’t protecting consumers.

Most troubling is that CDT fails to acknowledge that the widespread and evolving role of interactive advertising practices by these companies—including behavioral targeting, “rich” immersive media, and virtual reality formats—pose a serious threat to privacy and personal autonomy. It is not just the “bad” actors that require federal legislation, as CDT’s report suggests. If all Americans are to be protected online, the entire industry must be governed by federal policies designed to ensure privacy and consumer protection.

Here is a comment from my colleague Jennifer Harris: “When a group – with as close ties to the industry as CDT has – calls for government oversight, it is necessary to recognize just how much slack the online advertising and marketing industry has been given with our personal information. The main point is that consumers are at risk; updated federal consumer protection policies are essential to an environment that increasingly uses personal data as its commodity.”

Yesterday, the FTC sent out a release announcing its November town meeting on online advertising and privacy. The hearing is in response to the formal complaint my group Center for Digital Democracy and the USPIRG filed last November.

It’s clear that the FTC is fearful of really tackling the privacy and consumer-manipulation problems intrinsic to the online ad field. Behavioral targeting, which we also address in our complaint, is just the tip of the proverbial data collection and target marketing iceberg. Policymakers at the FTC, the Congress, and state A-G’s must do a better job in addressing this problem. Chapter seven of my book covers the topic, along with recommendations. As we noted in our statement yesterday, CDD has given the staff at the FTC a ton of material since November, further making the case for immediate federal safeguards. There is so much at stake regarding the future of our (global) democratic culture and its relationship to online marketing. We hope others will join with us and raise the larger societal issues, in addition to the specific online ad marketplace concerns.

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Bravo! for FCC Commissioner Copps: Will other Officials (Hello Democrats in Congress) Call on FCC to Investigate Concerns about Murdoch & Cross-Ownership?

Michael Copps remains one of the most interesting public-service minded officials ever to serve the Federal Communications Commission. He has put concerns about the public before the interests of the media conglomerates, helping give meaning behind the public interest clause of the Communications Act.

Yesterday, Commissioner Copps correctly called into question Rupert Murdoch’s News Corp. acquisition of the Wall Street Journal, noting that there is a key role for the FCC. After all, Fox already owns both the New York Post and TV station “Fox 5” and TV Station WWOR in the New York market. The notion that the Journal is strictly a national paper, and hence outside the broadcast-newspaper cross-ownership rules needs to be seriously examined. Indeed, Mr. Murdoch’s own desire to better compete with the New York Times suggests that the Journal needs to be seen as part of the New York DMA. Hence, the cross-ownership safeguards should apply. At the very least, the FCC should be deluged with letters and emails demanding a serious inquiry into the nature of the Journal in relationship to the rest of Murdoch’s New York area holdings and FCC rules. FCC approval of the deal, as Mr. Copps noted, should not be considered a “slam-dunk.”

We hope that leaders in the Congress–especially Reps. Ed Markey, Dingell, Conyers & Sens. Inouye and Dorgan–will issue public calls to Chairman Martin to conduct an in-depth inquiry. Republicans only recently concerned about cross-ownership should also be pressed to speak up–that should include Senators such as Snowe, Lott and Hutchison.

Here’s what Advertising Age’s Nat Ives reported, including a quote from Commissioner Copps: “This deal means more media consolidation and fewer independent voices, and it specifically impacts the local market in New York City,” Mr. Copps continued. “What’s good for shareholders of huge media conglomerates isn’t always what’s good for the public interest or our civic dialogue. We should immediately conduct a careful factual and legal analysis of the transaction to determine how it implicates specific FCC rules and our overarching statutory obligation to protect the public interest. I hope nobody views this as a slam-dunk.”

The 700 MHz Auction: It’s about Online Advertising, Mobile Targeting, Commercialism and Threats to Privacy

We are glad Google is pushing a more open system for wireless. Cable and the phone monopoly want to run a closed shop. But we also believe that Google ultimately has the same business model in mind for wireless. Google wants access to more mobile spectrum so it can advance online advertising via data collection, profiling and one-to-one targeting. Missing in most of the debate about wireless is how can we ensure the U.S. public has access to non-commercial and community-oriented (and privacy-respectful) applications and services. There should be well-developed plans simultaneously advanced with the auction that will ensure the spectrum really serves the public interest (we see some have made such proposals). Such spectrum should be community-run and help stimulate a new generation of broadband public interest content and network services. But we fear that all that will happen is that Google and others will further transform what should be public property into a crazy maze of interactive [pdf] advertising-based content. This will further fuel a culture where personal consumption takes further precedence over the needs of civil society.

excerpt: “Google continues to garner a much larger percentage of media
spend than its percentage of searches, and thanks to a recent algorithm tweak,
now extracts greater revenue per search than any engine. (Specifically, to
reduce spam in its listings, Google made a significant change in June
regarding landing page relevancy.)

“Google’s second quarter algorithm change continued to propel its
leadership in monetizing search for large brand marketers, surpassing
Microsoft, who has historically been able to monetize search very well,
albeit with fewer eyeballs,” explained Roger Barnette, president of
SearchIgnite.

In June, Google received 76% of media spend but only 60% of searches
across its network. During the same time period, Yahoo earned just 18.3%
of media spend while receiving 34% of searches across its network.”

from: “Search Spending Flat, With Google Disproportionate.” Gavin O’Malley, Jul 18, 2007. Mediapost.

What Google should have said about “Why we’re buying Doubleclick”

Why can’t Google admit to its real reasons for acquiring Doubleclick? It’s not truly candid recent post (by Group Product Manager Alex Kimmier) dodges the key issues. If Google can’t be more honest—and at least admit to real public policy concerns—it’s a strategic blunder (let alone an example of a corporate culture where candor isn’t truly valued). So first, this “official” Google blog should have admitted that there are real privacy concerns with the merger. When you merge the number one online ad search firm (Google) with a leading provider of cookies for display advertising (Doubleclick), in a medium where revenue generation is all based on the collection and targeted use of personal information, the deal rings five-alarm privacy alarm bells. It’s unbelievable—and frankly disquieting—that Google can’t admit this is an serious issue with its proposed $3.1 b takeover of Doubleclick.

Google is also being disingenuous when it discusses the online ad business. For example, in the post it lumps itself together with Yahoo! and MSN when discussing the 40% market share search ads have in the overall online ad market. But the official blog should admit that it’s far and above the dominant force in the search market, both in the U.S. and abroad (with a 64% market share in US search, leaving Yahoo and MSN trailing at 22% and 9% respectively.) It should acknowledge that the one part of the online ad market they don’t yet dominate is display advertising. Through it’s acquisition of Doubleclick, Google will be able to quickly expand its dominance to the rest of the market. It’s not about, as its blog suggests, creating a more “open” platform that can “improve online advertising for consumers, advertisers and publishers.” It’s about tapping into Doubleclick’s blue-blooded client list of Fortune-type companies so Google can better digest that vital part of the online ad market.

But beyond online ad consolidation, we wish to return to privacy and targeting. No matter how useful Google is helping to identify key sources of information, it’s not in the best interests of a democracy to permit a private gatekeeper of so much (continually updated) personal data. Google’s business is advertising: it will do what it must to collect information about each of us so it can personally target us wherever we are. Online advertising is a very powerful medium, utilizing technologies designed to affect our behaviors [pdf] in a variety of ways (including so-called immersive targeting). Google’s expansion—and its apparent inability to acknowledge key civil society concerns—should be part of the media reform debate.

Google Has Lobbyists in "at least" 10 European capitals

[we are now back from vacation. Expect a larger post soon].

excerpt: “In a preemptive move, Google in 2005 opened an office in Washington, and in March 2006, it hired lobbying firms. It recently also has recruited lobbyists in at least 10 European capitals. A company blog recently was launched devoted exclusively to public policy issues.”

from: If Trust Is Lost, Google Will Crumble. Oxford Analytica 07.04.07.

Online Marketing & Advertising– “the core of creating online demand.”

Excerpt from: Editorial: The Internet Revolution

“…Beyond all this is a basic truth—online marketing and advertising have moved from the periphery to the core of creating brand demand. It is also now at the core of the research industry and at the core of how business gets done today.”

Joseph T. Plummer. Journal of Advertising Research. June 2007

From SEC S-1. June 12, 2007 (excerpt):
“The interactive nature of digital media on the Internet enables businesses to access a wealth of user information that was virtually unavailable through offline audience measurement and marketing intelligence techniques. Digital media provide businesses with the opportunity to measure detailed user activity, such as how users interact with Web page content; to assess how users respond to online marketing, such as which online ads users click on to pursue a transaction; and to analyze how audiences and user behavior compare across various Web sites. This type of detailed user data can be combined with demographic, attitudinal and transactional information to develop a deeper understanding of user behavior, attributes and preferences… Our products and solutions offer our customers deep insights into consumer behavior, including objective, detailed information regarding usage of their online properties and those of their competitors, coupled with information on consumer demographic characteristics, attitudes, lifestyles and offline behavior.

Our digital marketing intelligence platform is comprised of proprietary databases and a computational infrastructure that measures, analyzes and reports on digital activity. The foundation of our platform is data collected from our comScore panel of more than two million Internet users worldwide who have granted us explicit permission to confidentially measure their Internet usage patterns, online and certain offline buying behavior and other activities. By applying advanced statistical methodologies to our panel data, we project consumers’ online behavior for the total online population and a wide variety of user categories…

Unlike offline media such as television and radio, which generally only allow for the passive measurement of relative audience size, digital media enable businesses to actively understand the link between digital content, advertising and user behavior.”

PS:  The S-1 also notes that “[O]ur database infrastructure currently captures approximately 182 million Web pages and 4.5 billion URL records each week from our global Internet panel, resulting in over 28 terabytes of data collected by our platform each month.”