NAI New “Study” on Behavioral Targeting: Self-Defense for Privacy-Threatening Data Collection

The Network Advertising Initiative (NAI), the online ad industry’s toothless self-regulatory scheme–has released a report designed to undermine policy safeguards protecting consumer privacy.  The NAI engaged the services of Prof. J. Howard Beales--a former FTC official who largely supported self-regulation of online data collection during his tenure at the agency–to issue a study.  Not surprisingly–and something anyone who follows behavioral online advertising knows–is that these practices work.  When you track, collect, profile a consumer online and know their interests, background, location, you can make a better ad experience.  Privacy is only mentioned once in the report.   The study’s message is really that if it makes money, don’t think of protecting consumer privacy.   The NAI explained in a release that “Behaviorally targeted ads sell for twice the price and offer twice the effectiveness of normal run-of-network ads, significantly enhancing the advertising revenue engine driving the growth of the Internet.”

The suggestion that we should not be concerned about privacy even if these practices threaten consumer protection is absurd.  Anyone who suggests that we should permit a wholesale invasion of privacy (and more) because it helps support online publishing isn’t addressing the critical question.  How can we protect consumers and also have a robust online content system?  Both can–and must–be done.

Online Ads Generate Sales, says Yahoo! Underscores Power of Digital Marketing

One of the ploys online advertisers are using to help deflect the call for privacy and consumer protection rules is that all this data collection & and online marketing really doesn’t amount to much.  But we all know the opposite is true:  online marketing techniques are designed to trigger consumer behavior.  Here’s what Yahoo just blogged, about a speech to advertisers given by their CEO Carol Bartz [our emphasis]:”…a recent study Yahoo! did with a brick-and-mortar retailer that tracked the effect of online ads on more than [sic] million consumers. While everyone involved in the study expected that online ads would drive online buying, the study found that 93% of the effect of the ads caused offline purchases. And every ad dollar spent drove $10 in purchases.

The IAB’s Targeting/Data Collection Glossary: Oh, What a Tangled Privacy Threatened Web They Weave [Annals of Geo. Orwell meets Madison Ave.]

The Interactive Advertising Bureau has released for public comment a telling document that illustrates why Congress and the FTC need to develop some rules to protect consumers.  Take a look at the definitions the IAB has embraced on targeting and data collection–and ask yourself.  Based on what they say, can this really be–as the IAB claims–non personal information? Here are some of the definitions from the Networks & Exchanges Quality Assurance Guidelines [Feb. 2010]:

*Audience Targeting:A method that enables advertisers to show an ad specifically to visitors based on their shared behavioral, demographic, geographic and/or technographic attributes.  Audience targeting uses anonymous, non-PII data.

*Behavioral Targeting:  Using previous online user activity (e.g., pages visited, content viewed, searches, clicks and purchases) to generate a segment which is used to match advertising creative to users (sometimes also called Behavioral Profiling, Interest-based Advertising, or online behavioral advertising).  Behavioral targeting uses anonymous, non-PII data.

*Attribute – A single piece of information known about a user and stored in a behavioral profile which may be used to match ad content to users.  Attributes consist of demographic information (e.g., age, gender, geographical location), segment or cluster information (e.g., auto enthusiast), and retargeting information (e.g., visited Site X two days ago).  Segment or cluster information is derived from the user’s prior online activities (e.g., pages visited, content viewed, searches made and clicking and purchasing behaviors).  Generally, this is anonymous data (non-PII).

*Behavioral Event – A user-initiated action which may include, but not limited to: searches, content views, clicks, purchases, form-based information and other interactions.  Behavioral events are anonymous and do not include personally identifiable information (PII).

*Clickstream Data – A Clickstream is the recording of what a computer user clicks on while web browsing.  As the user clicks anywhere in the webpage or application, the action is logged on a client or inside the web server, as well as possibly the web browser and ad servers.  Clickstream data analysis can be used to create a user
profile that aids in understanding the types of people that visit a company’s website, or predict whether a customer is likely to purchase from an e-commerce website.

*Cookie – A small text file sent by a website’s server to be stored on the user’s web- enabled device that is returned unchanged by the user’s device to the server on subsequent interactions.  The cookie enables the website domain to associate data with that device and distinguish requests from different devices.  Cookies often store behavioral information.

*Cross-site Advertiser Analytics – Software or services that allow an advertiser to optimize and audit the delivery of creative content on pre-bought publisher inventory.  Data can range from numbers of pages visited, to content visited, to purchases made by a particular user.  Such data is used to surmise future habits of user or best placement for a particular advertiser based on success.

*Deep Packet Inspection – A form of computer network packet filtering that examines the data and/or header part of a packet as it passes an inspection point. In the context of online advertising, it is used to collect data, typically through an Internet Service Provider, which can be used to display targeted advertising to users based on previous web activity.

* Retargeting (or re-targeting) – The use of a pixel tag or other code to enable a third-party to recognize particular users outside of the domain from which the activity
was collected. See Creative Retargeting, Site Retargeting.

*Creative Retargeting:  A method that enables advertisers to show an ad specifically to visitors that previously were exposed to or interacted with the advertisers’ creative.

*Unique User – An individual user that has interacted with online content, which is smaller than or equal to the number of cookies observed.  The number of unique users to a website is usually an estimate.  

Yahoo to Pharma Marketers: Come `Engage’ & Target Health Consumers Online

As my CDD has explained to both the FDA and FTC, the digital marketing of drugs and health information require serious privacy and consumer protection safeguards.  What may be acceptable when selling cars & travel online using the online ad tool-set is not appropriate when transferred wholesale to such sensitive categories as drugs.  Here’s an excerpt [pdf] from Yahoo!s promotional piece entitled “Social Media:  Pharmaceutical Marketing in the Age of Engagement.”

Social media marketing is a compelling opportunity for pharmaceutical companies to reach their most influential audience. Recent research conducted by Manhattan-based Hall and Partners Healthcare found that online health consumers are hyper-engaged and leverage almost twice as many information sources

to learn about disease states and prescriptions than the average consumer… For every creator of content – a physician writing a blog, for example – there are

roughly 10 synthesizers actively commenting, sharing, rating and reacting. For each group of synthesizers, roughly 100 consumers read, watch, listen and enjoy

while participating only occasionally. All three of these groups have a valid place within the community. event forms. Just as we have built communities of physicians who speak openly with each other about our products, we have an opportunity to nurture and learn from consumer communities as well. First, we must listen with intent…Analyzing what you hear can reveal a gap in consumer awareness. What’s more, a number of tools have emerged to help consolidate the vast array of social media input, from free online evaluators like Intelliseek, to sophisticated and customized tracking services like Cymfony. Once marketers have a firm grasp on the language, attitudes, brand perceptions and key COLs in their consumer community, pharmaceutical company participation can range from targeted media placement to integration and empowerment. All approaches are open to branded or unbranded programs…

Facebook: `Social identity revolutionises ads’

That’s the headline on a Facebook executive’s presentation at Social Media World Forum in London.  As reported by StrategyEye, “[S]ocial network profile identities “fundamentally change” the relationship between online marketers and consumers, according to Facebook EMEA strategy and planning head Trevor Johnson. Tailoring marketing campaigns to people rather than IP addresses or other anonymous online identities provides far better ways of reaching consumers and targeting ads, says Johnson.”  The story says Johnson explained “that Facebook ads which use social context produce a 25% increase in user actions and a 68% increase in “brand lift”. He also says that posts published by brands and firms are almost seven times more likely to create a user action than paid advertising on the site.”

“Medical Searches made up 45% of total online traffic”

That’s what Hitwise says, according to a recent report on search engine marketing.  Online ad spending by pharma is predicted to be $2.2 billion in 2011, “up from $1.2 billion in 2008.

source:  Take advantage of pharma sem: Your Rx for success.  Dan Brough.  Search Engine Marketing: Essential Guide.  DM News. 2009

Time for Digital Marketing Wake-up Call at FDA

As we said the other day, we are now covering the online marketing of pharmaceutical and health products. One reason is that we want policymakers to better understand and assess the unique impact of online marketing techniques on the promotion of drugs. Here’s an excerpt from a DTC Perspectives article on the impact of digital media on pharma marketing:

“In video, this means that your target audience will consume three minutes or more of your branded content, and they will do it without being “forced.” Efficiency of the media buy improves, we see brand recall and favorability metrics increase significantly, and this more educated patient is much more likely to ask for a script. In a recent control/test survey conducted by HealthiNation, brand favorability increased by 30 percent over control and intent to ask for a script for the advertised brand doubled…Accurate and true measurement – Digital means you get what you pay for. If you are purchasing media placements to 100,000 viewers who are interested in heart disease, you get exactly that. Each view is counted and reported…”

source: DTC on Demand: The New Era of Qualified Reach for Consumer Rx Advertising. Raj Amin. DTC Perspectives. March 2010.

A Glimpse Under the Data Collection `Hood’: Behavioral, Social Graph, Ad Exchanges, Ad Optimization

As CDD explained to the FTC and data protection commissioners, advances in online ad data collection, selling and targeting raise significant privacy concerns. This rapidly evolving infrastructure of user data auctioning requires scrutiny and safeguards.  Here are some excerpts from jobs in the sector, which gives one a glimpse of what’s going on.

Director of Agency Development- NYC – eXelate

About eXelate

The eXelate Targeting eXchange is the world’s first and largest open marketplace for behavioral targeting data. Through participation on the eXchange, data buyers build an instant behavioral targeting function and optimize their campaign delivery, while data sellers gain insight on their audience, control over their data distribution, and build a new privacy–friendly income stream. The eXchange includes over 40 top ad network/agency buyers and dozens of leading publishers, who deliver targeting data on more than 170 million unique users each month.


Account Manager – NYC – Netmining…

Netmining is a global provider of behavioral marketing solutions that are proven to increase conversion rates across websites, online advertising, email programs and offline sales channels. With a real-time profiling engine that understands each individual’s interests and buying propensity, Netmining enables companies to deliver highly relevant and personalized interactions across the entire customer lifecycle.
Senior Account Manager – Social Targeting Data – NYC – Media6degrees: About Us

We are the first online advertising firm built from the ground up specifically to leverage “social graph” data. The power of this data is captured by the phrase “birds of a feather flock together.”  We have mapped the social graph interactions of nearly 75 million US consumers and are the first company to offer “social targeting” which allows marketers to fully exploit the network value of every individual customer with whom they interact while also significantly improving response rates on new acquisition campaigns.

Our platform employs proprietary cookies to map the social graph. Our core data used to map the social graph has long been part of the standard Internet advertising protocols for trafficking advertisements and has been fully integrated with both Yahoo’s RightMedia platform as well as the DoubleClick Exchange and is accessible to any of the thousands of major marketers who advertise through these vehicles.


Senior Account Executive (2 Jobs) – NYC, SF – TARGUSinfo: 

Its unique identification, verification, qualification and location services enable retailers, call-center operators, Web-based marketers, communication service providers and others to dramatically increase the quality of their services and the effectiveness of their marketing. A privately held company, TARGUSinfo is headquartered in Vienna, Va. For more information, visit

With a focus on delivering measurable, predictable results in a online environment, TARGUSinfo is defining tomorrow’s marketing standards by delivering a display advertising targeting solution to advertising networks, interactive advertising agencies, and publishers.  We currently have a large cookie-based audience solution based on verified offline data assets.


Optimization Consultant, Ad Exchange – NYC – Google

you will be responsible for working with buyers and sellers on the Ad Exchange to optimize their experience (ie. manage yield or drive return on marketing investment). You will be responsible for partnering closely with Product Management, Engineering, Sales, and Services to build models, develop new ones, apply customer specific data, and develop insights.

Black Box Warning Required for Digital Rx Ads

This week CDD expanded its work on public health & digital advertising to include issues related to prescription drug advertising and health marketing online.  It submitted to the FDA, as part of that agency’s proceeding on Internet and social media marketing, comments.  We are speaking on this issue next week in New York.  And we will be dedicating resources via this blog and other venues on the issue.

But meanwhile we will begin by covering some of the latest developments.  In our FDA comments, we raise questions about the online targeting and data collection practices of online health marketers, including the tracking and targeting a consumer by their medical “condition.”  One of the companies we cited was “Everyday Health” and its “ConditionMatch(TM)” marketing system.  Today, that company posted a release saying it was the “faster-growing health network.”  Here’s an excerpt:  GHM audience is up 93% over a year ago — to 32 million unique visitors monthly — due to growth in consumers’ appetite for sophisticated, condition-specific information on niche sites. Advertisers have followed…

One factor driving the ad gains: a precise targeting capability GHM calls ConditionMatch(TM), which profiles “in-market” consumers (people searching for specific medical and wellness information). GHM delivers three primary audience channels: Consumer Medical, Consumer Wellness, and Healthcare Professionals. The Medical Channel delivers condition-specific audiences (e.g., allergy, diabetes, depression); Wellness bridges a marketplace gap by combining fitness and nutrition sites; and HCP aggregates professional website audiences.

“Pharma and CPG brands want condition specific-audiences of scale,” said Bill Jennings, CEO of Good Health Media. “Our site partners attract more a more frequent, loyal audience than broader health destinations online. We’re able to reach people who are actively seeking specific information on partner sites and across the Internet. That’s the ideal platform.”