Consumer and Privacy Groups at FTC Roundtable to Call for Decisive Agency Action

Washington, DC, December 6, 2009 – On Monday December 7, 2009, consumer representatives and privacy experts speaking at the first of three Federal Trade Commission (FTC) Exploring Privacy Roundtable Series will call on the agency to adopt new policies to protect consumer privacy in today’s digitized world. Consumer and privacy groups, as well as academics and policymakers, have increasingly looked to the FTC to ensure that Americans have control over how their information is collected and used.

The groups have asked the Commission to issue a comprehensive set of Fair Information Principles for the digital era, and to abandon its previous notice and choice model, which is not effective for consumer privacy protection.

Specifically, at the Roundtable on Monday, consumer panelists and privacy experts will call on the FTC to stop relying on industry privacy self-regulation because of its long history of failure. Last September, a number of consumer groups provided Congressional leaders and the FTC a detailed blueprint of pro-active measures designed to protect privacy, available at:

These measures include giving individuals the right to see, have a copy of, and delete any information about them; ensuring that the use of consumer data for any credit, employment, insurance, or governmental purpose or for redlining is prohibited; and ensuring that websites should only initially collect and use data from consumers for a 24-hour period, with the exception of information categorized as sensitive, which should not be collected at all. The groups have also requested that the FTC establish a Do Not Track registry.

Quotes from Monday’s panelists:

Marc Rotenberg, EPIC: “There is an urgent need for the Federal Trade Commission to address the growing threat to consumer privacy.  The Commission must hold accountable those companies that collect and use personal information. Self-regulation has clearly failed.”

Jeff Chester, Center for Digital Democracy: “Consumers increasingly confront a sophisticated and pervasive data collection apparatus that can profile, track and target them online. The Obama FTC must quickly act to protect the privacy of Americans,including information related to their finances, health, and ethnicity.”

Susan Grant, Consumer Federation of America: “It’s time to recognize privacy as a fundamental human right and create a public policy framework that requires that right to be respected,” said Susan Grant, Director of Consumer Protection at Consumer Federation of America. “Rather than stifling innovation, this will spur innovative ways to make the marketplace work better for consumers and businesses.”

Pam Dixon, World Privacy Forum: “Self-regulation of commercial data brokers has been utterly ineffective to protect consumers. It’s not just bad actors who sell personal information ranging from mental health information, medical status, income, religious and ethnic status, and the like. The sale of personal information is a routine business model for many in corporate America, and neither consumers nor policymakers are aware of the amount of trafficking in personal information. It’s time to tame the wild west with laws that incorporate the principles of the Fair Credit Reporting Act to ensure transparency, accountability, and consumer control.”

Written statements and other materials for the roundtable panelists are available at the following links:





AAAA Letter to DoJ on Microsoft/Yahoo Deal: `Mad’ Merger Men & Women Missing Some Truth in Advertising

The 4A’S advertising trade and lobby organization sent a letter to the Department of Justice yesterday supporting the Microsoft/Yahoo search merger deal.  Among the five signatories from some of the biggest and most powerful ad companies was the head of the Publicis Groupe. But missing from the `approve this deal’ letter was any acknowledgment that Publicis is a partner of Microsoft–something we and other consumer groups have asked the DoJ to investigate as part of its review.

The recent deal between Microsoft and Publicis includes the sale of Razorfish, combined online ad activities and also data sharing.   In addition, Microsoft is expected to own 3% of Publicis after the deal closes, according to the Wall Street Journal.

The letter to the DoJ should have disclosed this and other conflicts of interest.

Microsoft’s “Sweeping Vision” for Online Ads: “unlocking the Holy Grail of marketing” by “mining user intent”

The digital data collection arms race is unleashing powerful forces focused on data collection and consumer targeting across much of the online world.  As advertisers meet to discuss and celebrate their accomplishment and plans, as part of Advertising Week, Microsoft is playing a leading role.  As you read about their plans from this excerpt in Adweek, keep in mind that they hope to bundle their search marketing platform with Yahoo!

Microsoft is heading into Advertising Week looking to capture the ad industry’s attention by laying out a sweeping vision for the online advertising market and the integral part it plans to play in its the future…At the heart of that undertaking is the plan to build a product that can determine exactly what ads Web users want to see and when. “At the core, the most important thing to us is mining user intent,” Howe [Scott Howe, corporate vp, Microsoft’s advertiser and publisher solutions group], said. “What does a user really want to see in the way of advertising.”

That’s easy in search. But intent is not so clear on content sites or social networks. “If Bing is step one [for Microsoft Advertising], step two is extending that engine to power the ads that someone sees across all display ad formats and multiple devices,” Howe said.

…”When people talk about behavioral targeting, often they’re talking about flat display formats on a PC — and we’re talking about across all digital devices,” he said. “And so, by having this engine power all the different things holistically, we’re actually in some respects unlocking the Holy Grail of marketing.”

Online Consumers Require Real Privacy Safeguards, Not the Digital Fox [AAAA, ANA, BBB, DMA & IAB] in Charge of the Data Hen House

The self-regulatory proposals released today [2 July 2009]  by five marketing industry trade and lobby groups are way too little and far too late. This move by the online ad industry is an attempt, of course, to quell the growing bi-partisan calls in Congress to enact meaningful digital privacy and consumer protection laws. It’s also designed to assuage a reawakened Federal Trade Commission–whose new chair, Jon Leibowitz, recently appointed one the country’s most distinguished consumer advocates and legal scholars to direct its Bureau of Consumer Protection (David Vladeck). The principles are inadequate, even beyond their self-regulatory approach that condones, in effect, the “corporate fox guarding the digital data henhouse.” Effective government regulation is required to protect consumers. We should have learned a painful lesson by now with the failure of the financial industry to oversee itself. The reckless activities of the financial sector—made possible by a deregulatory, hands-off government policy–directly led to the current financial catastrophe. As more of our transactions and daily activities are conducted online, including those involving financial and health issues–through PCs, mobile phones, social networks, and the like–it is critical that the first principle be to ensure the basic protection of consumer privacy. Self-dealing “principles” concocted by online marketers simply won’t provide the level of protection consumers really require.

The industry appears to have embraced a definition of behavioral targeting and profiling that is at odds with how the practice actually works. Before any data is collected from consumers, they need to be candidly informed about the process–such as the creation and evolution of their profile; how tracking and data gathering occurs site to site; what data can be added to their profile from outside databases; the role that data targeting plays on so-called first-party websites, etc. In addition, the highest possible consumer safeguards are necessary when financial and health data are involved. Under the loosey-goosey trade industry principles, however, only “certain health and financial data” are to be treated as a “sensitive” category. This would permit widespread data collection involving personal information regarding our health and financial concerns. The new principles, moreover, fail to protect the privacy of teenagers; nor do they seriously address children’s privacy. (I was one of the two people that led the campaign to enact the Children’s Online Privacy Protection Act).

The failure to develop adequate safeguards for sensitive consumer information illustrates, I believe, the inability of the ad marketing groups to seriously address online privacy. The so-called “notice and choice” approach embraced by the industry has failed. More links to better-written privacy statements don’t address the central problem: the collection of more and more user data for profiling and targeting purposes. There needs to be quick Congressional action placing limits on the collection, use and retention of consumer data; opt-in control over profile information; and the creation of a meaningful sensitive data category. Consumer and privacy groups intend to work with Congress to ensure that individuals don’t face additional losses due to unfair online marketing practices.

[press statement by the Center for Digital Democracy]

Google studies the online behavior of tweens (10-14 year olds) with message to target them via search advertising

When Google acquired DoubleClick last year, they also took over its search marketing division called Performics. A new study commissioned by Performics focuses on the media behaviors of 10-14 year olds, so-called tweens. The aim of the study is basically to get more online targeted marketing aimed at young people. The senior VP of search operations at Performics–Stuart Larkins–recently wrote an article on the new study that appeared in Chief Marketer. Here are some excerpts.

At DoubleClick Performics, we sought to better understand the online search and purchase behaviors of seven influential demographic segments and commissioned ROI Research to study these habits across 10 different product categories. Results just arrived for one of the most dynamic segments – Tweens, consumers between the ages of 10 and 14…Tweens consume information through many channels, but the Internet leads. When asked how much time they spent with various media types, 83% said they spend at least an hour per day online, and 68% reported at least an hour per day watching TV. Radio, magazines and newspapers came in much lower…

Nearly half of respondents go online many times per day (more than three), and 87% usually spend at least a half hour each time. Looking closer at this time spent online, the survey found:

72% have a profile on at least one social networking site
· 54% have a MySpace profile
· 35% have a Facebook profile…

For search engines, Google was the overwhelming choice among tweens, with 78% indicating they use Google most frequently…

Tweens reported varying levels of involvement across product categories…

To capture the demand generated in complementary channels, marketers should incorporate search ads into other online and offline marketing campaigns. While a nice rule of thumb for any marketing program, this golden rule is especially true when targeting tweens.”

A story on the Performics study in today’s Marketing Daily noted the research came just as kids were getting ready to get their back- to- school gear. As reporter Tameka Kee explained, the study showed that “search marketing in the media mix is crucial to snagging the attention and influence of tweens, as they are increasingly using search to make product recommendations and find pricing info for their parents...Peformics also found that tweens were using search to find specific product information and store locations across multiple product categories. Nearly half of all respondents said that they used search to find product Web sites in the electronics, telecom, apparel and CPG categories, while nearly half said that they used search to find out where to purchase said products online.”

Marketing is a fundamental part of our lives–and will be increasingly so with digital media. But researching the online media behaviors of young people so they can be targeted with interactive digital marketing raises a number of policy issues, as well as parental concerns. We know that Google has announced plans to sell Performics, although it will incorporate some of its activities within its business operations. But Google’s senior executives should play a leadership role in addressing how to ensure the healthy development of young people. Consumer and childrens’ advocates in the U.S. and the EU-among other places–will be watching closely.

Update. The announcement just came from the Google press office that global ad giant Publicis will acquire Performics. Of course, Google and Publicis are also working together and announced an alliance earlier this year.  Here’s an excerpt from today’s email to the press: “Publicis Groupe and Google (NASDAQ: GOOG) announced today that Publicis Groupe has agreed to acquire the Performics search marketing business (Performics) from Google. Chicago-based Performics, one of the leading search marketing services providers, helps to improve the performance of advertisers’ investments and maximize
client campaign effectiveness. Its profit-driving suite of marketing solutions includes Performics’ reporting platform, local platform, advanced market expertise and active account management….Publicis Groupe has been a leader in the advertising industry for decades, and we believe Performics’ growing business will benefit from being part of it,” said Eric Schmidt, Chairman and CEO, Google. “We look forward to working with Performics as a partner.”

Google/Yahoo! Combine also raises questions about Publicis and WPP deals

Officials need to examine the recent deals made both by Google and Yahoo! with advertising agency powerhouses, Publicis and WPP, respectfully. The Google/Yahoo! combine reduces competition in the online ad sector, and these agreements need to be part of the analysis. Google and Publicis completed their deal last January “based on a shared vision of how new technologies can be used to improve advertising.” Last month, Yahoo! and WPP formed a “multi-year strategic partnership” that is connected to the online ad trading Right Media Exchange.

Search should not be considered a “natural monopoly,” as some cynics suggest. Nor should search by viewed as separate from display; increasingly the two are intertwined. Marketers desire cross-platform strategies. Perhaps that’s one reason Google is hiring cross-platform ad specialists. To quote from a Google job posting: “The Cross Platform Solutions team forms partnerships with advertisers and agencies to build brands online. We strive to deliver the most efficient and effective digital platform upon which the world’s leading brands are built. We connect advertiser’s brand messages to their target audience through innovative, precise and accountable online marketing solutions whose reach can extend around the world.”

It’s hard to keep up with the online ad world, so it’s not surprising that regulators have been slow to address the critical consumer and competition issues. But much is at stake in how diverse and consumer-friendly the new media world will become. That’s why the DoJ and the Hill need to look at these ad agency deals, among other issues we will discuss soon.  Btw, privacy is a serious issue in the deal, no matter how Yahoo! may be spinning it.

Comcast works with Miller Beer, Kraft Foods, Mars, Publicis to expand cable TV ad targeting. Baltimore new location for its micro-targeting–and consumer privacy threatening–trials

Here’s the excerpt from the 4/4/08 Comcast and Starcom (a division of Publicis ad giant) release. See too the role of outside databases in the targeting, including from Experian, Acxiom, List USA and Equifax. We hope Comcast watchers, privacy and consumer advocates, and Maryland state officials, take notice:

“Comcast Cable, and leading media agency network Starcom MediaVest Group (SMG) announced today the expansion of their agreement to test addressable TV advertising with a trial scheduled to launch in the third quarter of 2008 in the Baltimore, MD area. The companies also shared findings of a recently completed groundbreaking trial of addressable advertising technology…

The initial technical trial, which began in December 2006, took place in Huntsville, AL… Comcast has been offering zone-based advertising, but this was the industry’s first significant effort to deliver different ads within the same commercial break to different household groupings, based on demographics and advertiser segments…

“Addressable advertising gets us closer to the power of mass personalization by delivering highly relevant brand messages to engaged consumers, and this is the ideal connection in a world of scarce consumer attention,” said Laura Desmond, CEO-The Americas at Starcom MediaVest Group.

Major marketers active in the trial, all SMG agency clients, included General Motors, Discover Card, Hallmark, Kraft Foods, Mars, Miller Brewing Company and Procter & Gamble. One of the unprecedented capabilities demonstrated in this trial was advertisers were able to segment the market into audiences based on demographic data, and Comcast was able to deliver relevant ads for the advertisers’ products and services to each segment.

Comcast’s data services partner, Experian(R) Marketing Services, assisted Comcast in segmenting the market and matching relevant messages to groupings of households. Addressable advertisements were delivered with the support of OpenTV’s SpotOn(TM) advanced advertising solution, which allows for seamless switching of video ads to aggregated groups of set-top boxes…
The trial revealed that viewers who saw ads directed to households within a particular group were less likely to change channels… The Huntsville market was selected to pave the way for a larger scale deployment in 2008. The next Comcast Cable market slated to receive an expanded trial of addressable advertising is Baltimore, MD using Invidi’s Advatar(TM) technology.”

Comcast, in its release, claims that privacy will be honored. We think that’s a claim that requires to be challenged. Here are excerpts from Invidi, the technology company Comcast is using for this micro-targeting and data collection trial:
” For operators, ADVATAR provides the ability to address every subscriber on an individual basis. Marketing messages can be fine tuned and matched to the diverse interests of viewers and to the rapidly changing marketing needs of operators…
Viewer Present Classifier
Learning the demographic make-up of the household is critical to targeted impressions delivery
Age Classifier
Behavioral cues, viewer patterns and remote control click-stream data create gender IDs that are accurate and reliable
Gender Classifier
Converging industry data and program category information with remote control usage generates superior gender identification
Income Classifier
Cross-tabulating US Census data and zip code+4 information creates dynamic blocks of median household income
Geography Classifier
Periodically published tables correlate unique DSTB IP addresses with zip code + 4 data for dynamically generated targeting zones
Additionally, INVIDI is expanding its classifier set to include a Multicultural Classifier and a Contextual Search Classifier…
With Spot Optimization advertising inventory on the most popular cable programs is expanded by segmenting the audience to enable either a single advertiser to deliver multiple ads or multiple advertisers to advertise to different demographic targets all within a single time-specific break – generating substantial additional revenue by creating more quality targeted inventory to sell…
Geo Targeting
Every advertiser and marketer has the ability to create their own unique geo targeting mapping criteria. ADVATAR’s Geo Targeting used in combination with addressable, demographic and behavioral processes creates a new and powerful television advertising and marketing landscape…

For advertisers, ADVATAR is the ultimate impressions delivery system – making “Prime Time” whenever viewers are watching television. For the first time ever on any television platform media planners can precisely execute their advertising campaign with reach, frequency and separation – guaranteed impressions delivery to true demographic targets.
For media buyers ADVATAR provides unprecedented access, prevue, purchase, verification, real-time campaign management and dynamic reporting of television delivered impressions.”

PS: From Invidi’s December 2007 deal with Nielsen [excerpt. our emphasis]:
“The Nielsen Company and INVIDI Technologies Corporation today announced a multi-year agreement to share data and explore ways to measure personalized television ads targeted at specific viewers. As part of the non-exclusive agreement, Nielsen will provide INVIDI with demographic data that will enable INVIDI to refine and improve its advanced software engine – called Advatarâ„¢ — to track “addressable” advertising. Addressable or “targeted” advertising allows digital television providers to simultaneously deliver different ads to specific groups or even individuals based on their demographics, buying habits or personal preferences.”
PPS:  A video report on Comcast & Invidi (note mention of privacy concerns). via YouTube.


The Microsoft/Yahoo! Threats to Privacy Issues Exemplied by Ad Industry Reaction to Deal

Once again, we thank the ad industry for writing our blog (and regulatory!) copy: “”I think what we lose in being able to negotiate with both of them we’ll gain with new opportunities. The biggest opportunity would be to leverage Yahoo’s behavioral targeting across Microsoft’s relationships with Facebook, XBox and Massive, which has the ability to dynamically insert ads in console games.”–Andrea Kerr Redniss, SVP, Optimedia US.”

from: Madison Avenue: We Love MSFT-YHOO. Silicon Valley Insider. Feb. 1, 2008.

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Google’s Privacy PR: Here’s What They Sent to Reporters. But real safeguards are required, especially in the GoogleClick era

Yesterday a reporter sent me the following email sent from the Google PR shop. Instead of calling for responsible policy safeguards to protect consumers, Google is distributing booklets, videos and other self-help materials (in other words, let the user beware). It’s not surprising that Google is on a PR effort to quell the growing calls for real privacy protection. But they are not living up to their own ideals if they fail to really be more candid about the conflicts they have with a business model entirely based on data collection and targeted marketing.

Here’s the email:

“From: “Adam Kovacevich”
To: undisclosed-recipients:;
Sent: Monday, January 28, 2008 12:23:11 PM (GMT-0500) Auto-Detected
Subject: Happy Data Privacy Day

Okay, okay, so you can be forgiven if you didn’t realize today was Data Privacy Day here in dear old North America. At Google we’ve been doing a lot lately to educate our users about our privacy policies (particularly the launch of our Google Privacy YouTube channel ), but we figured today was a good day to unleash a few more education efforts. To wit:

• A brand spankin’ new video on the YouTube channel explaining how cookies work:
• A new booklet ( ) that gives our users an in-depth look at our privacy practices and approach. This should be a particular good resource for you journos too.
• We’ve co-sponsored the creation of educational materials ( ) on teen online privacy for parents and educators.
• Our senior privacy counsel Jane Horvath is today joining legal scholars, privacy professionals, and government officials from Europe and the U.S. at an international data privacy conference being held at Duke University in Durham, North Carolina.

For more on all of this, check out our blog post:

or background from the Search Engine Land blog:


Adam Kovacevich | Sr. Manager, Global Communications and Public Affairs | Google
1101 New York Ave NW | Second Floor | Washington, DC 20005 “