Category: Yahoo!

The so-called tattered “wall” separating editorial content and advertising will soon be totally obliterated. So eager/desperate for ad dollars, a vast array of websites, TV networks, and others on the broadband highway are willing to do anything to please marketers. Financially powerful brands are using their clout—and online access–to create a web of channels and other content designed to promote products. It’s going to be an ad, ad, ad, ad world.

Take, for example, Time Warner’s new “digital ad content division,” which it named “Studio 2.0.” This unit will “integrate brands and develop programming specifically for ad sponsorship,” noted Ad Age. Time Warner and others want to give us a torrent of ad-created content designed to promote greater consumption of the products which pay them the most [think junk food, fast cars, and beer]. A model for such efforts, they proudly claim, is radio and early television. Radio broadcasting broke its promise to the public that there would be substantial commercial-free (known as sustaining) programming. Program schedules were created and packaged by ad agencies. TV networks also worked closely with Madison Ave. to help promote brands. For example, NBC’s evening TV news program was called “The Camel News Caravan,” named after its sponsor—Camel cigarettes. Lucille Ball and Desi Arnaz could be seen smoking cigarettes on their popular “I Love Lucy” series. Philip Morris was the sponsor.

Here’s what a senior Warner TV exec. said about the mission of Studio 2.0. “We view this an a natural extension of what we do every day as content creators, and we’re adapting to the digital environment. Since advertisers were intimately involved in the early days of television, it makes sense for them to be involved in this arena, too.”

Yikes! I hope they add that quote in Time Warner’s annual corporate social responsibility report!

Here’s an excerpt from the Time Warner Studio 2.0 announcement: “What has become eminently clear is that our advertising partners in our traditional television businesses are anxious to work in collaboration with the creative community to develop original digital content,” said [Bruce] Rosenblum [president Warner Bros. TV Group]. “At our core, we are a content creation company and Studio 2.0 is a natural, yet extraordinarily exciting, extension of our television production businesses. We are confident that…Studio 2.0 will successfully provide advertisers with cutting edge tools that will integrate their brands with inventive digital content in fresh, impactful and meaningful ways. At the same time, Studio 2.0 will present our creative partners in our television production divisions with a vibrant platform to express their vision in expanding digital arenas…” The complete release is here.

The role that advertisers are playing in the creation of content (see Bud.TV, for example) and with media companies such as Time Warner, Viacom, and Fox is more than troubling. It will require more than disclosure, although such prominent notifications about the financial arrangements and placements will be necessary. Web 2.0 must become more than a series of virtual advertorials. We will be returning to this topic in the months to come.

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Perhaps one reason behind the recent changes at Facebook is that this social web outfit wants to make itself more advertiser-friendly. Last June, Facebook and giant ad agency powerhouse Interpublic Group (IPG) signed a deal that is all about the harvesting of data. IPG’s investment gives it the clout to engage in “mining Facebook for market research trends among its young user base.” In exchange for buying .05 percent of Facebook by agreeing to spend around $10 million worth of ads, IPG is able to “participate in marketing programs on the website, including online advertising and promotions, as well as pilot programs involving sponsorships, consumer research and content creation on behalf of its clients.”

Of course, there’s also the new major (last month) advertising deal with Microsoft. According to the press release, “[A]dvanced technology from Microsoft and Facebook will help connect advertisers with Facebook users in more relevant, innovative ways through a combination of graphical ad placements, as well as automated text-based advertisements targeted to content and, over time, aggregate user behavior on an anonymous basis.”

We’re glad there’s a protest, and users feel their privacy has been violated. But Facebook and other social networking sites, such as MySpace, need to come clean about how their mega-marketing deals with advertisers/marketers threatens everyone’s privacy (at the very least!). We hope there will be more protests focused on social networking sites and their advertising/marketing deals and plans.

All along, we said that one of the key reasons why cable and phone companies oppose network neutrality safeguards is that they plan to impose a whole new business model for broadband communications in the U.S. They want, in essence, a “pay-per-packet” scheme where they can install digital tollbooths all over cyberspace. Favored content ($$$) gets sent over the fast lane. Others placed on a slower and more limited “tier.” High on their target list as an enemy for profits are peer-to-peer applications (P2P). They don’t want users harnessing the power of the network to bypass their “monetization” plans for the Internet. Technology companies are working to help them give P2P the cold shoulder. Take this new [Aug. 29] announcement from Allot Communications, a company that manufactures a broadband control device called “Net Enforcer.”

Allot can now “detect and manage encrypted BitTorrent traffic,” which it says is taking up too much network bandwidth. Since some of the BitTorrent communications is encrypted, it’s difficult for ISPs, says Allot, to detect and manage it. But with its new service, Allot assure the phone and cable companies (and other places such as college campuses) that encrypted P2P can be sent to slower lanes, limited, or even blocked. Here’s what Allot says in its release: “Using deep packet inspection (DPI), Allot NetEnforcer allows service providers and enterprises to have greater visibility into their networks to inspect identify and analyze hundreds of applications and protocols, track subscriber behavior, prioritize traffic and shape traffic flows. DPI technology provides a comprehensive view of traffic and applications on the network, allowing providers to maintain greater control of quality of service (QoS) on both the subscriber and the application level, and to differentiate themselves in the industry based on tiered service offerings and guaranteed service delivery.”

For more industry documents that give us a digital “Rosetta” stone into our digital future, see here. And remember. The phone and cable companies must be defeated politically when Congress returns next week. We don’t want to have an AT&T, Comcast, Verizon, Time Warner styled “Big Brother,” able to control our broadband travels. Nor do we want to see these companies use their power to help out the government—say the NSA!

Just a reminder, although I’m sure you all know. So-called Web 2.0 services are being shaped to help advertising and marketing. Users should beware—and be informed—about what kind of deals are being made now that big media companies such as Murdoch’s News Corp./Fox owns the 100 million user MySpace site. For example, what exactly happens when you visit all those “friends” pages placed by Burger King, Wendy’s and Jack in the Box? For a list of companies plying “profiles” of their brands on MySpace, click here.

Evidence that MySpace is for sale to marketers was yesterday’s announcement that its homepage was sold for a day to the new youth-targeted TV network run jointly by CBS and Time Warner—called CW. On September 20, which is the day CW officially begins operations, MySpace’s “skin will be made over in CW green, with prominent mentions of the debut that night of “America’s Next Top Model.”

We have nothing against folks making a digital dollar. But some limits and safeguards are required—including a clear delineation between interactive advertising/marketing and content. Full disclosure about exactly what advertisers are getting for their sponsorship is also a must. It seems that MySpace is becoming “MySpaceforsale Space.”

[source: “Inside Move: CW Marks a MySpace Page.” Josef Adalian. Variety, August 31, 2006. Subscription required]

While we are pleased that groups are on the lookout for interactive advertising abuses, such as the one reported today focused on AOL, we believe that the attempt to make a distinction between “badware” and “adware” creates a false dichotomy. The ever-growing field of digital marketing adware is really all about “badware.” A pervasive data collection, profiling, and targeted marketing culture is shaping our broadband era, fueled by ever more powerful digital ad technologies and marketing networks. So when the “StopBadware.org” group “targets” an ad industry outrider or practice, it is important to remember that by making the case that there are only a few bad examples, it ultimately helps companies such as Google. Google, of course, is one of the key sponsors of StopBadware.org (as is Sun Microsystems, which has helped create rich media applications designed to deepen branding and marketing relationships with individuals). A Google, Yahoo! and a Microsoft, among too many others to mention, depends on a world where digital marketing practices are permitted to go unchecked by policy.

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We just learned that early this year, PBS began running “sponsored links” on some of its webpages, such as on “arts and drama.” When you go to these pages, there are ads promoting such things as a “Are You Normal” quiz from Chatterbeam.com. That site tries to capture personal information, including your email. Even a pop-up ad shows up. One major problem is that PBS fails to disclose that a cookie may be placed on your computer, and that other information may be shared with third-parties. In other words, PBS is helping place our privacy at risk. It is certainly aiding commercial data collection. [Read the privacy policy at the bottom of the Chatterbox page.]
This is another example of how out-of-touch PBS senior management are with their non-commercial mandate. They shouldn’t be involved in a ad-revenue sharing deal with Google. They certainly shouldn’t be acting as a digital go-between with commercial sites engaged in data collection. PBS.org’s flimsy “what’s this” disclosure link under the ads is totally inadequate.

PBS needs to maintain a coherent and ethical non-commercial approach to digital communications. Commercial exploitation on PBS sites will only do damage to the service in the long run.

As the Congressional battle to secure network neutrality nears, with a possible Senate vote next month, it’s important to place a spotlight on the broadband domination plans of both the cable and telephone industries. We know that companies such as AT&T, Verizon, Comcast and Time Warner fear the Internet. They don’t wish to see an open, non-discriminatory platform compete with them in the delivery of IP-based communications (voice, video, etc.). As a Alacatel white paper explained, “service providers [meaning cable/phone co’s] are really competing with the Internet as a business model, which is even more formidable than just competing with a few innovative service aggregators such as Google, Yahoo and Skype.” [Alcatel is helping both AT&T and Verizon build its networks].

Comcast, the largest and most powerful cable T.V. company, plans to use its clout to leverage greater control over the delivery of IP video. It has recently acquired “thePlatform,” a major web publishing technology company. Through thePlatform, Comcast will be able to ensure that it can deliver its own and “approved” broadband content more efficiently, including better positioning, pricing, and the capture of critical personal subscriber/user information (so they can more effectively market to us vs. competitors and other providers). Comcast plans to use this technology as part of its plans to make its web portal a national broadband video [rich media] service—one that can better compete with Google, Yahoo!, and other independent providers.

Comcast also plans to deploy an advanced video/broadband integrated set-top box that will serve as a “high-end” home gateway, capable of delivering a full range of multimedia into the home (including a powerful personal video recorder). They call it “RNG,”—standing for real next-generation. Comcast’s other recent acquisitions, including interactive TV software developer Liberate [now called Double C Technologies, a joint venture with Cox], will also be part of its platform.

It doesn’t take a mind reader to understand why Comcast, its cable brethren, and giant phone companies lobbied the FCC to sweep away the Internet’s non-discriminatory safeguards. By removing the key policy impediment to their plans for broadband dominance (or relevance!), they can deploy the range of technological/economic controls that will shape our broadband future.

Source: “New Cable Strategies Spawn Efforts By Vendors to Push Set-Top Envelope.” ScreenPlays, August 2006.

The Bush Administration has come to the aid of GOP Hill leaders who are desperately working to derail network neutrality legislation. Federal Trade Commission Chair Deborah Majoras has just announced plans for her agency to explore the network neutrality issue. The message from the Bush White House via Ms. Majoras is clear: Congress shouldn’t be concerned about the need to restore the Internet’s neutrality, now that the so-called consumer watchdog FTC is on the case.

In a speech delivered at the annual tony confab of the Progress and Freedom Foundation (a Newt Gingrich co-founded group funded by industry that opposes net neutrality rules), Majoras questioned whether any Internet freedom rules were needed at all. The market, she noted, can protect us. But she also announced plans for her agency to convene an Internet “Task Force” to “evaluate Net Neutrality proposals in detail.” Her discussion of the issue ignored, of course, how the phone and cable giants purposefully lobbied to have the Bush FCC kill the U.S. Internet’s non-discriminatory governing principles in the first place (with cable in 2002 and with the phone network in 2005).

Majoras was a controversial appointment herself. The government’s chief regulator for competition in the oil and gas industry was formerly a top corporate lawyer for Chevron-Texaco (as well as for Halliburton). Just as she has helped big oil, she is now aiding big phone and telecom interests. The move by Ms. Majoras is designed to help Senator Ted “Tube” Stevens sway enough Senators so he can swiftly have the Senate pass his major telecom bill–minus any real network neutrality safeguards. Ironically, it was Oregon Senator Ron Wyden (D) who led the effort to oppose the Majoras confirmation in 2004. Wyden was concerned (rightly, it turns out), that a Chevron-lawyer-led FTC would do little to challenge gasoline price hikes. Now Wyden is also leading the effort against permitting the Stevens bill to come to a vote if it is lacking net neutral rules.

Majoras plans to hold a public net neutrality related hearing as part of its “Consumer Protection in the Next Tech-ade” event on November 6-8. (Seriously, they call it that. They mean next decade!). Advocates should tell the FTC at that time it shouldn’t be flacking for a Bell-Big cable Net takeover. Ms. Majoras should also hear from everyone as well: 202-326-2492.

Anti-Internet freedom giant Verizon announced that it will be using its FIOS network to sell and deliver online ad-supported gaming, according to Online Media Daily [Aug. 11, 2006]. “The service is optimized for the Verizon fiber-optic broadband network, and runs fastest when players have subscribed with Verizon,” [my italics] it was reported. Verizon’s PlayLinc gaming service will feature ads for the phone giant’s “fiber-optic network, mobile phones and phone service…and on the program itself.”

Oh, what a tangled web we will have, as the anti-net neutrality monopolists use their new discriminatory powers to shape the Internet to their liking.

We are flabbergasted—but not surprised—that the forces supporting monopolization and consolidation of the U.S. digital broadband pipeline will resort to practically any argument to shore up their poorly grounded rationale against network neutrality safeguards. Take, for example, a recent post by Scott Cleland at the so-called netcompetition.org. He attempts to use the Google deal with News Corp.’s MySpace.com as an example of the search giant’s hypocrisy. Cleland terms Google a “search-opolist,” since—in his view—they have entered into an exclusive agreement to serve MySpace’s advertising needs. Such a deal, however, has no relation with what netcompetition.org backers have in mind. They wish to fundamentally control the evolution of the entire U.S. digital media system (wired and wireless) so they can profit from “triple play” and beyond. They plan to ensure their (or affiliated) content, search engines, social networking and gaming sites are given a fast ride—while others are left in an uncompetitive and undemocratic digital sphere.

The MySpace deal should be sounding alarm bells about the further commercialization of our culture—and how young people are seen as nothing more than “brand breeders.” But the deal also underscores why we need to have Congress restore Internet Freedom rules now. So we can give the public access to a wide range of interactive services that don’t try to control our web travels and also further commodify our eyeballs, clicks and democratic souls.

PS: We think it strange that Mr. Cleland ignores the history of the open access broadband fight (the precursor to network neutrality), including his own calls on Congress to enact safeguards. He shouldn’t treat the issue as if it was something new. In fact, during the open access debate, Mr. Cleland warned Congress that “market forces alone are not enough to develop or sustain competition in telecommunications” (his emphasis). He told the Senate Commerce Committee that “[W]ithout required open-access of local broadband access platforms in the increasingly complex market for broadband bundles, competitive forces won’t develop sufficiently or rapidly enough to ensure that consumers are offered maximum choice and protection from anticompetitive pricing of broadband vertical services.” He also said that it was “naïve to believe that market forces alone will eventually open the cable network to competition. It does not square with past experience or market reality.” [Source: Written Testimony of Scott C. Cleland, Managing Director of The Legg Mason Precursor Group. November 8, 1999. Before the U.S. Senate Committee on Commerce, Science and Transportation. Hearing on Telecommunications Mergers.]

PPS: Here’s another one of our favorite—keep those pipes open—quotes from Mr. Cleland. From the Washington Post.

“To Scott Cleland, an analyst with Legg Mason Precursor Group, the special treatment that allows cable operators to shut out other providers follows neither history nor logic. “Cable is the fifth wire into America’s homes,” Cleland says. “The principle of nondiscrimination applies to the other four. The electric company cannot tell you what kind of brand of appliance to buy, the gas company can’t tell you what kind of furnace or stove to buy. The water company can’t tell you what kind of faucet or sink to buy. The telephone company can’t tell you what kind of or brand of phone to buy or who to do business with over your phone. Why should cable?” [Source: “How Much Room In the Fat Pipe?” John Schwartz. September 19, 1999; Page H01].