Some commentators–and groups funded by online marketers that target teens–are worried that proposals to the FTC and Congress that adolescent privacy be protected will somehow create a system that requires forms of age verification online. The coalition of leading consumer, child advocacy, health and privacy organizations filing comments at the FTC last week aren’t calling for the parental permission paradigm used by the Children’s Online Privacy Protection Act [COPPA] be extended to teens. But there are many online commercial services specifically targeting adolescents–that’s their target market. It’s those sites and services specifically focused on adolescents that we want to have better privacy safeguards.  We want those sites to be governed by an opt-in regime that gives teen users meaningful control of how their information is collected and utilized. Those sites should be required to engage in the Fair Information Principles known as “data use minimization.” Commercial sites targeting adolescents should make its data collection practices fully transparent and under the control by the teen (including a truly accessible privacy policy). In another words, a privacy safeguard regime that really should be available for everyone. Teens are ‘ground zero’ for much of digital marketing–for examples see our site: www.digitalads.org [especially the update section]. If you look at the reports on that site, you will see that the most recent scholarly thinking is that brain development in adolescents occurs much later than what was once thought. They don’t have the ability to effectively understand the intent of highly sophisticated interactive marketing and the corresponding data collection which underlies contemporary digital advertising. That’s why empowering them so they can protect their privacy strengthens their rights.
Category: adolescent privacy
Yahoo uses neuromarketing for online ads: helping “maximize emotional connection and drive higher purchase intent” for Pepsi and others
The FTC and EU will need to develop safeguards on the use and role of neuromarketing techniques in advertising, especially when deployed for online campaigns. Here’s an excerpt from a Yahoo post on the power of neuromarketing:
“…how do you measure the emotional connection in your advertising? Are some advertising mediums better than others in making that emotional connection? To answer these questions, Yahoo! partnered with NeuroFocus, a market leader in neurological market research. Yahoo! measured the brain waves of 74 people in real-time as they viewed online, print, and television executions of three ad campaigns from Pepsi, Infiniti, and Yahoo!…The simple answer is, consumers can’t hide their brain waves. By measuring the direct response of advertising at the brain level, we are able to observe and quantify pre-cognitive reactions
before reporting biases set in.
In this study, we specifically measured emotional engagement, purchase intent, and overall effectiveness. Ad responses were measured on a 10 point scale, with the median ad performance around 5.0.
We found that the ads from all three brands performed above average across all platforms. However, when ads are optimized for the Internet, they maximize emotional connection and drive higher purchase intent. In fact, by designing ads that fully leverage the interactive strengths of the online platform, advertisers can even outperform TV in emotional engagement…When ads are optimized for the Internet, they maximize emotional connection and drive higher purchase intent
By taking full advantage of the unique capabilities of the Internet platform, the Infiniti ad scored higher on emotional engagement, purchase intent, and overall effectiveness than both the television and print version of this ad.”
from: Making the Emotional Connection: Advanced neurological research reveals deeper insights into ad effectiveness by medium. Yahoo. May 17, 2010.
Facebook: Ads, Data, and Dollars–its revenue comes from targeting “on users’ real life data”
Facebook execs frequently claim they don’t share their users personal information with advertisers. They also always add that Facebook isn’t really that interested in advertising revenues. But that’s not correct, as the Facebook Quarterly Business Review: Q1 2010 reflects. Facebook, now cash positive, was said to earn somewhere between $600-700 million in revenues last year–up dramatically from the $150 million generated in 2007. The Quarterly estimates that Facebook should earn over $1 billion in 2010. How? “By growing multiple revenue sources, mostly around advertising,” it explains. Facebook is expected to earn some $350 million alone in 2010 from selling its ad services to big brands, with more growth expected. In the last year, Facebook has “invested heavily in expanding its brand advertising efforts by opening up offices in Paris, Madrid, Milan, Hamburg, Sydney, Stockholm, Toronto and Los Angeles.” The report says that Facebook will eventually earn some $20 billion a year, with a huge increase coming from big brand advertisers.
So-called performance advertising on Facebook [from social games, for example] is expected to bring in between $500-600 million this year. There will also be additional revenues from Facebook’s virtual currency [and soon from mobile and location based marketing as well].
Facebook’s users aren’t informed about the datamining that occurs on what they post and communicate, including to their social networks. We believe these systems require transparency and mechanisms of user control. And FTC and Congressional action.
Facebook teams with McDonald’s–location targeting for fast food giant part of a “bigger media buy”
Facebook is becoming a leading marketer for fast-food companies. When one thinks about Facebook working to weaken privacy, keep in mind they want to better harvest user data to help sell ads and other marketing services to McDonald’s and others. According to Ad Age [excerpt, sub. may be required]:
Facebook is preparing to launch location-based status updates for its users. But the social network is also planning to offer it to marketers, including McDonald’s. As early as this month, the social-networking site will give users the ability to post their location within a status update. McDonald’s, through digital agency Tribal DDB, Chicago, is building an app with Facebook would allow users to check in at one of its restaurants and have a featured product appear in the post, such as an Angus Quarter Pounder, say executives close to the deal. Facebook is not directly charging McDonald’s to build the app; Facebook generally does not charge developers to build on its platform. But executives with knowledge say it was negotiated as part of a bigger media buy on Facebook, and McDonald’s will be the first marketer to take advantage of the service.
The fast feeder won’t be alone for long. While McDonald’s is expected to be involved in the rollout in the next few weeks, execs at other digital shops have begun to spec out location-based campaigns in anticipation of Facebook’s impending functionality, which will allow users to include their location in a status update.
…Kevin Colleran, director-national sales at Facebook…noted that Facebook has the world’s largest mobile application, with more than 100 million users each day.
source: McDonald’s to Use Facebook’s Upcoming Location Feature: Brands Eager to Build Apps Once Massive Social Network Launches Its Own Foursquare Competitor. Emily Bryson York. Ad Age. May 06, 2010
Boucher/Stearns Privacy Bill: Fails to Ensure Data Collection Minimization and Forces Consumers to rely on Digital ‘fine’ Print
Yesterday, Reps. Rich Boucher and Clifford Stearns released a “discussion” draft for what they intend to become a new law addressing privacy online. Mr. Boucher, whom I and a number of consumer and privacy representatives met with in March, is sincere in his desire to address online privacy. But the bill’s overall orientation maintain (and really nurtures) the intense and pervasive data collection, online profiling, and targeting status quo. Instead of focusing the goal of the bill on data minimization, a important Fair Information Principle, it really enables the maximization of information collection on consumers.
The bill does make several important contributions, including acknowledging that racial/ethnic and sexual orientation must be considered “sensitive” information requiring higher safeguards [I played a role in urging Congressional leaders to include racial/ethnic data in the sensitive category]. By acknowledging that a “unique persistent identifier” should be classified as personal information, the draft bill follows what policymakers in the EU have crafted (and the FTC staff has already largely suggested).
But by primarily relying on so-called “notice and choice”–namely privacy policies–the bill fails to protect online users. There is a growing consensus, backed by research, that privacy policies are inadequate. The reliance by Mr. Boucher on Google’s ad preference manager system, which allows users to opt-out of more specific ad targeting categories, doesn’t address the key question: how can we ensure less information is collected and used about each of us. Nor does the bill protect sensitive information involving health and finance, where it permits a huge loophole that will continue online data practices involving our interactions online with financial and health related sites and services]. Adolescents are left unprotected in the bill–one of its most glaring omissions.
The bill doesn’t really empower the FTC to act effectively in this area, in our opinion. Under the Boucher/Stearns bill, consumers will still have to rely on digital fine print–written in invisible ink–to protect privacy. This is not a debate on ensuring online ad revenues for free content–we all support that. It’s about defining reasonable rules of the online road that balances citizen and consumer rights with the interests of those who collect our data–whether they be commercial or government.
Facebook Tells Big Advertisers: We’re not “a pure social media site”
That’s what Facebook’s “Chief Revenue Officer” Mike Murphy told big brands like Coca Cola and Pepsi at an invitation only event focused on better targeting teens and young adults. The “PTTOW! Youth Media Summit is an annual, invite-only conference focused on the trillion dollar young adult market.  Bringing together the top marketers from the world’s most innovative companies, the event serves as a high-level forum for discussing youth media, marketing and culture across every major industry category.”
Facebook was there pitching its wares, helping big brands better target its users. Mr. Murphy is quoted as saying that its Fan pages have become “a sustainable asset even after the campaign ends.” We all know that Facebook needs ads to thrive. But it has to become honest with its users–and privacy and consumer protection policymakers–about the data it collects and how it’s used. It’s also useful to know that Facebook doesn’t see itself only as a social media site–because it’s really part of online marketing [including increasingly for food and beverages linked to the global youth obesity crisis].
Rep. Ed Markey: Protect Children’s Privacy Online via COPPA
Rep. Ed Markey has been a longstanding leader in Congress on children’s media issues, and was the original co-sponsor of the Children Online Privacy Protection Act (COPPA). Here’s what he released yesterday to coincide with the Senate Commerce committee oversight hearing.
MARKEY: KEEP CHILDREN’S PERSONAL INFORMATION OUT OF THE ONLINE COMMERCIAL ‘COOKIE JAR’
WASHINGTON, D.C. – Representative Edward J. Markey (D-Mass.), a senior member of the House Energy and Commerce Committee and co-Chairman of the Bi-Partisan Congressional Privacy Caucus, issued the following statement on Senate Commerce Consumer Protection, Product Safety, and Insurance Subcommittee hearing on the Children’s Online Privacy Protection Act (COPPA):
“More than a decade ago, I joined with Sen. John McCain (R-Ariz.) and then Sen. Richard Bryan (D-Nev.) to enact the Children’s Online Privacy Protection Act,†said Markey. “COPPA was a landmark piece of legislation that has contributed to the creation of a safer and healthier online environment for children. It established a clear set of rules for marketers to follow and gave parents tools for overseeing how their children’s information was being collected and used online. It also helped to tame the digital ‘wild west’ of the information superhighway-where personal information was routinely collected from unsuspecting kids on the Internet.
“COPPA faces new challenges today. The growth of broadband and the proliferation of mobile phones give marketers a new generation of powerful techniques for data collection and behavioral profiling. I commend the Subcommittee for holding this important hearing on children’s privacy in the digital age. I urge them to ensure that the Federal Trade Commission, as it reviews COPPA this year, makes necessary changes to its implementation that will permit the law to  remain an effective safeguard.
“We deliberately wrote COPPA to make it a “living” and flexible statute, so it could address new data collection and targeting practices that threatened to undermine children’s privacy as the Internet evolved. I will work with the Senate and the FTC to ensure that COPPA continues to protect children in the expanding digital marketplace.â€
Microsoft breaks from IAB Lobby and supports a stronger FTC Consumer Protection Role
I asked both Google and Microsoft their position on proposed legislation that would enable the FTC to protect consumers. Microsoft, to their credit, has taken a stand, even if it has a caveat. Here’s what they wrote to me:
“…Microsoft has supported the expansion of FTC authority, including in our longtime support for comprehensive federal privacy legislation and in a recent legislative proposal on protecting consumers related to cloud computing, where we said that the FTC should play a key role. In the current environment, there ought to be better alternatives to guide the marketplace than de facto rulemaking through enforcement activity.
It is our view that there is merit to having FTC rulemaking authority mirror that of other agencies — we favor increased certainty and the ability for comment on proposed rules that will impact our industry. At the same time, the reasons the FTC’s existing mechanisms were put in place (as articulated in the industry letter you cite) should not be ignored. Perhaps there is room for a balanced approach.”
Online Advertisers Side with Kids Junk Food Marketers: Opposing Consumer Protection by FTC, Even to Address Childhood Obesity Epidemic
The Interactive Ad Bureau [whose board members include Google, Fox, NBC, Comcast] is working with the marketing and data collection lobby to oppose proposed Obama Administration legislation that would enable the FTC to protect consumers. It’s clear from the comments below in Reuters, that the IAB is siding with those that don’t want to really address the youth obesity crisis. If the FTC is allowed to conduct the same rulemaking procedures that the FCC and other agencies already do, it might actually be able to better protect consumers, including kids. Shame on the IAB and its lobbyist colleagues for being on the side of those against the public health of our nation’s children. By preventing the FTC to engage in consumer protection, the IAB, ANA and others are supporting the same deregulatory scheme which led to the current financial disaster for so many Americans and our economy. Here’s the Reuters excerpt:
“A more powerful FTC could boost its oversight of advertising of sugary and salty snacks to children, the online collection of personal data by advertisers and green advertising, said Dan Jaffe of the Association of National Advertisers…This (financial reform/CFPA bill) is a fast moving train,” said Zaneis. “The FTC provisions that are likely to be added onto the CFPA bill really are industry’s no. 1 legislative priority.”
Civil Liberties, Consumer & Privacy Groups to FCC: Protect Privacy
The American Civil Liberties Union, Center for Digital Democracy, Consumer Action, Consumer Federation of America, Consumer Watchdog, Privacy Lives, Privacy Rights Clearinghouse, Privacy Times, and U.S. PIRG told the FCC in a filing 22 January 2010 that: “There are significant problems concerning the collection and use of personal data by companies, especially sensitive data and children’s data; (2) The FCC should not rely on industry self-regulatory models because they do not adequately protect consumer privacy; and (3) The principles and standards that should serve as the foundation of consumer privacy protection should be the Fair Information Practices, especially as they are implemented in the OECD Guidelines on data privacy… The FCC should consider all avenues it may use to protect consumers, including exercising its ancillary jurisdiction to address broadband privacy issues, and working with Congress and the Federal Trade Commission (“FTCâ€), which has substantial expertise in consumer privacy protection.”
To learn more, click here.