Protecting Privacy and Consumers: Testimony on Behavioral Targeting Before House Commerce Subcommittees

Last week, I testified on the threat to both consumer privacy and welfare from the growing data collection, profiling, and targeting interactive online marketing system.  I told Congress it was critical to enact legislation that would protect consumers, especially as they use online and mobile networks for financial and health-related transactions (credit card applications, banking, health inquiries, etc.).  As you can see from the testimony, I said we should be able to have an online privacy policy that  ensures the public is protected, while also promoting the growth of the commercial online medium.

The link to the testimony via a press release is here.

Behavioral Targeting as “Anonymous”–Can You Fool all the Regulators All/Some of the Time?

excerpt and my emphasis from new product announcement.  Ask your self as you read, is it anonymous?:  “…Behavioral Targeting is the latest addition to the Amadesa Customer Experience Suite and represents a powerful extension of Amadesa’s personalization continuum…“Amadesa’s site-side Behavioral Targeting algorithm goes above and beyond how most marketers define personalization by incorporating principles more commonly seen in advanced advertising solutions and applying them on marketers’ sites,” explained Rita Brogley, Amadesa’s CEO. “Although the technology is among the industry’s most sophisticated, the integrated user interface makes Behavioral Targeting easy to implement with little follow-up required of the marketer…

  • An algorithm that anonymously collects hundreds of user data attributes, including time of day, day of week, IP address, referring URL and more
  • In-session updating which captures visitors’ actions and behaviors, incorporates them into personas and acts on these findings in real time
  • A sophisticated, yet easy to use, interface with actionable reporting that allows marketers to compare Behavioral Targeting traffic with a control group to track the results of the algorithm
  • A quick preview function which lets marketers easily view content options prior to launch...”

From Product Overview:  Amadesa’s Behavioral Targeting (BT) algorithm personalizes site content and media elements for visitors based upon their real-time behaviors. BT analyzes hundreds of data elements to learn which campaign promotion, category image or general creative is most compelling for each individual. By automatically matching the best content to each visitor, BT can have a dramatic affect on conversions and engagement…
source:  Amadesa Adds Site-Side Behavioral Targeting to its Continuum of Personalization SolutionsAmadesa Adds Site-Side Behavioral Targeting to its Continuum of Personalization Solutions.  Press Release.  June 15, 2009.
and Amadesa Product Overview 2009.

Microsoft uses brain research to improve ads in online games, including for Doritos [annals of neuromarketing]

excerpt:  “…in-game ads have begun to move out of the “experimental buy” bucket and into the media plan because advertisers now realize that ads in games produce results…Measurement is very important…Earlier this week, the Interactive Advertising Bureau (IAB) released new in-game advertising guidelines for public comment to establish a common methodology for counting impressions and to simplify the process of buying and selling in-game advertising… Microsoft’s advertising arm also has been involved in a study that examines the emotional reactions consumers have toward advertising campaigns in and around video games. The first phase of the study — conducted with EmSense, a neuroscience company — compares the findings with similar results from television commercials. The companies discovered that the interactive elements in the video game ad campaigns evoke stronger emotional connections with consumers and more positive emotional associations with the brands.

EmSense analyzed several different advertising campaigns on Xbox 360 games, Xbox Live and MSN Games. Some brands involved in the study include Doritos, Kia, Sprint, Hyundai and Microsoft.

In-Game Ads In The Ad Game.  Laurie Sullivan.  Online Media Daily.  June 16, 2009

PS:  Among the in-game ad categories [excerpt] proposed by the IAB include (and I kid you not!): Valid Ad Impression:
The threshold for a valid Ad Impression is a cumulative exposure to an ad of ten (10) seconds.   An In-Game Measurement Organization may accumulate ad exposures of shorter time lengths to achieve this Ad Impression threshold… Lighting
Only ads that are visible within the virtual game environment with sufficient lighting during darkness should be counted. Maximum Ad Angle Relative to Game Screen
The angle of the ad must be no greater than 55 degrees relative to the game screen.

The Growing Role of Advertising in Online Video (and a Pitch by Google for Greater Ad into Content Integration)

As advertisers continue to exert greater influence in online programming content (and as we prepare for what will eventually be a digital version of the 1950’s Quiz show scandals), we are tracking this trend.  Here is an excerpt from Screenplays magazine on a recent Internet “upfront” conference held by ad company Digitas:  Across the board the message was that advertisers aren’t interested in backing web content without having access to precisely the right performance data…Measuring engagement…is a big component of tracking ROI…Carls Jr. recently rolled out an online video campaign with eight YouTube stars, said Alex Levy, director of Branded Entertainment at Google.  “Brands increasingly have an appetite for web content and the DVR has made everything old new again.  We have to keep figuring out how to integrate into the content itself, she said.

New York Web Confab Reveals Hurdles Agencies Have Set for Video Ad Metrics.  Screenplays.  June 9, 2009

The IAB’s new lobbying “study”–this term paper gets a failing grade [plus, amazingly, it was co-authored by an ad giant board member]

The Interactive Ad Bureau, a trade association that lobbies for the online ad industry, wants to help derail legislation that would protect consumer privacy.  On Wednesday, it released a report designed to sway Congress; it claimed that the “Ad-Supported Internet Contributes $300 Billion to U.S. Economy, Has Created 3.1 Million U.S. Jobs.”  Incredibly–and so revealing–was the failure of the report to discuss the privacy issue at all.  In fact, the term privacy is only mentioned once (and doesn’t refer to the civil liberties issues at the core of the debate).

In fact, this report appears more like some sort of term paper where various facts and figures were piled on in an attempt to make an argument.  The report conflates the Internet with the online ad market (and misses the larger critical issues).

But what’s astounding is that it was co-authored by a board member of WPP, the world’s largest ad agency.  Harvard Professor John Quelch has been on the WPP board since 1988, earning some 60,000 pounds a year for his service. WPP has a huge financial stake, needless to say, in the digital ad business.  Professor Quelch is also on the Pepsi Bottling Group board.  The report was developed by Hamilton Consultants, which has represented online giants such as AT&T, Time Warner, Verizon, along with other major online marketers Coca Cola, GE and–of course–WPP.

The IAB’s stance appears to be that if Congress protects our privacy, it will somehow undermine the Internet’s role in economic growth.  The opposite, I believe, is true.  An Internet that reflects the values of democracy will do a better job for us all—including the lobbyists and academic consultants working on behalf of the IAB.

Google’s YouTube Pushes Carls Jr. Burgers. 53 grams of fat/870 calories/It’s #1 Video Ad for the Week

Take a look at this YouTube branded ad campaign for Carls Jr.  Look at the nutrition information.  The ad, says Visible Measures, is at the “number one spot on the Top Ad Campaigns chart this week showcases vloggers from the Nigahiga comedy group chomping down for Carl’s Jr.’s How To Eat A Burger campaign, which features the Portobello Mushroom Burger. The campaign grabbed a record-breaking 3.3+ million views…”

MTV uses Neuroscience to Analyze Ads for Games: Examining “the optimal way of connecting to this audience when they’re that rabid and that engaged.”

excerpt:  “…MTVN  conducted a three-day study of more than 60 gamers at a biometrics lab in Las Vegas; they showed the players various ads and games, all while examining stats like heart rate, respiration, movement patterns and visual attention. Interestingly, they found that 15-second pre-rolls were the most effective way to garner a player’s “focused attention”—beating out 30-second spots, in-game display ads, and even overlays. Pre-roll ads commanded up to 85 percent focused attention, MTVN’s study found, meaning that the vast majority of the viewers paid full attention to the ads…“The question we wanted to answer was do ads need to be more disruptive to be effective?” said Jason Witt, GM for MTVN’s Digital Fusion ad unit. “We can always stick a bigger ad in front of somebody. And we found that you don’t have to be more disruptive, by and large. The proof is that 15-second pre-rolls were the most effective.” The study also found that game ads had 8x higher unaided brand awareness over online display ads in general, and fueled a 12x higher intent to purchase…So for us, the goal is to see what’s the optimal way of connecting to this audience when they’re that rabid and that engaged.” 

source:  Need To Reach Casual Gamers? MTV Says 15-Second Pre-Rolls Work Best.  David Kaplan.  June 10, 2009.

Behavioral Targeting Meets Neuroscience: “The ability to tap into psychological and physiological testing for ad targeting is an emerging field”

Here’s an excerpt from the article BT: Can It Mean Behavioral Responses To Ads?:

Companies touting the targeting of online ads to consumers as a mixture of art and science could soon find psychologists employed among their midst…One To One Interactive will open its primary research lab, OTOinsights, to other advertising agencies and research firms… Along with the main lab in Charleston, Mass., a mobile lab that can travel anywhere offers input on eye tracking; click tracking; bio-feedback such as heart rate, respiratory rate, galvanic skin response; neuro-feedback such as EEG/active attention; and facial recognition technology that interprets six fundamental human emotions: happy, sad, angry, surprised, scared, disgusted, and neutral…The ability to tap into psychological and physiological testing for ad targeting is an emerging field…There are between 10 and 15 firms…spearheading efforts. …Neurofocus…focuses on EEG electroencephalographic- (EEG-) based neurological testing that reveals the degrees of attention, emotional engagement, and memory retention that consumers experience at the deep subconscious level of the brain.

source:  Laurie Sullivan.  Behavioral Insider.  June 4, 2009.

Google’s NetPAC and Lobbying

Google’s Andrew McLaughlin is listed as the “designated agent” and “Assistant Treasurer for its “NetPAC” in a Federal Election Commission filing dated March 16, 2009.  It gave out $270,000 to federal candidates for the 2008 election cycle, according to the Center for Responsive Politics.  It’s a veritable political “who’s who” for those receiving the money, including the leading lawmakers overseeing policies that affect Google’s interest, including privacy and intellectual property. Among the recipients include Reps. Barton, Boucher, [now WH chief of staff] Rahm Emanuel, Markey, Speaker Pelosi, Sens. Dorgan, Durbin, Reid, Rockefeller, Smith, etc.

Money for the PAC came from Google execs such as Sergey Brin, David Drummond, Eric Schmidt, Vint Cerf, Mr. McLaughlin, Hal Varian and others.  It’s worth looking at the Center’s coverage of Google’s contributions.

Clearly, corporations and individuals have a right, within limits, to donate to campaigns.  But to me, Mr. McLaughlin’s role running Google’s PAC–as recently as this Spring–illustrates why such activity should be addressed by the White House’s new “Ethics Commitments” for personnel. This isn’t about Mr. McLaughlin or Google.  But no top political operative should be able to make a quick revolving door trip into a federal job that will be connected to their private sector role.

Google Promotes Carls Jr. via special YouTube Ad Deal: But “won’t be marked as ads”

excerpt via Adweek:

Justine Ezarik might not be a household name, but the 25-year-old has a cable TV-size audience… Thanks to Google, she’s also now part of Carl’s Jr.’s effort rolling out this week to sell the Portobello Mushroom Six-Dollar Burger to young men. The search-engine giant drafted Ezarik and eight other popular YouTube creators to participate in an ad campaign for the fast-food chain on the video-sharing site…

The YouTube stars were chosen not only for their creative flair, but for the networks of followers they can mobilize. Ezarik, for instance, not only has 94,000 subscribers to the iJustine YouTube channel — the nine YouTube celebs combined total 3.8 million subscribers on the site — but also boasts 590,000 followers on Twitter and 25,000 Facebook fans…Google is adding such deals to its advertising arsenal as it attempts to turn the video site into a moneymaker… Other new tools include tying advertiser videos to search results and matching high-profile creators like Seth MacFarland with brands…

The Carl’s Jr. videos will live on a dedicated YouTube channel, the creators’ pages and in ad units across sites in the Google ad network. They won’t be marked as ads on the YouTube pages, but will carry a notice they were paid for by Carl’s Jr. Each video also invites users to upload their own videos of how they eat a burger.

source:  Carl’s Jr. Makes New Kind of Network Buy:  Burger promo leans on vast reach of YouTube content creators.  Brian Morrissey.  Adweek.  June 1, 2009