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.


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.”

Facebook: Fess Up and Tell Us Who Your Outside Lawyers and Lobbyists Are

There’s an irony that for a company which thinks privacy is passé, they won’t reveal to the press whether they have engaged the services of former FTC Chair Tim Muris.  That’s what we have heard from a number of reporters over the last several days.   It’s no coincidence, in our opinion, that Facebook has allegedly engaged Mr. Muris to represent them at the FTC while he is helping lead the campaign against congressional proposals to strengthen that consumer protection agency.  Facebook’s new data collection system, including its “Like” application, doesn’t face the kind of regulatory scrutiny it requires–given the FTC’s current political fight and regulatory weakness. Bravo to Sen. Schumer and the other Senators who are asking for action.

Tim Muris, the Facebook Connection, and the FTC: The Need for Disclosure in the debate over Protecting Consumers Online

Former Bush FTC Chair Tim Muris is helping lead the charge against proposals that would ensure the FTC can be an effective consumer protection agency.  His critique of Obama and House-backed proposals in the financial reform bill that gives the FTC the ability to act on behalf of consumers is being cited by some in Congress.  Muris is trotting out the tired refrain that the FTC would not act responsibly if given the same rulemaking authority almost every federal agency has.  He suggests that the FTC would–horror!–actually protect children from junk food ads [1 out of every 3 kids in America is obese–and ads play a role] and also ensure our privacy is protected online.  When you think privacy, think about all the things you do using the Internet–involving your money, health, family/kids–and remember that digital marketers are eavesdropping on what you do–and selling that information to the highest bidder.

But two sources tell us that Mr. Muris is representing Facebook at the FTC–he is a lawyer at O’Melveny and Myers.  Facebook is now the subject of a FTC complaint by privacy groups, as well as the growing focus of data protection commissioners.  When Mr. Muris speaks about the FTC, especially his concerns that if given the ability to enact safeguard rules it would address privacy and online marketing, it is extremely relevant that he has at least one client allegedly involved.  During his tenure at the FTC, Mr. Muris relied primarily on industry self-regulation when it came to protecting privacy online.  That posture has resulted in consumers being victimized by a data collection “wild west,” which even industry now admits.  Facebook’s work with Mr. Muris places the social network service in the company of those working to defeat safeguards to protect America’s kids from ads that promote obesity. Given Facebook’s own growing role as a fast food advertiser, questions need to be raised about their involvement fighting FTC consumer protection proposals.  It is also another area where Mr. Muris needs to acknowledge his own commercial connections.

Do You Want Marketers to Target You via a “SocialDNA platform”?

33 Across is one of the recipients of a Google/WPP ad research reward.  As 33Across explains, it “enables brand and performance marketers to unlock the power of the Social Web. Our SocialDNAâ„¢ platform uses previously untapped social data sources, in combination with advanced social network algorithms, to create unique and scalable audience segments.”   In a job posting, they add that it can “enable advertisers to deliver high-performance media programs by activating the social graph around their brands. Our patent-pending SocialDNATM platform creates custom segments of people who are socially connected to a client’s existing customers, and reveals deep insights into the social network characteristics of a marketer’s brand. Our clients include many of the top online advertisers.”

Google & WPP Fund Academics to Help Expand Online Marketing Clout, including data collection

When drug companies fund pharmaceutical research at universities, questions on conflict and ethical behavior are raised.  So too when online marketers fund academic research designed to help Google and the largest advertisers better understand “how online media influences consumer behavior, attitudes and decision making.” Here are the new grants Google and ad giant WPP gave to 11 research projects:

  1. Michael Smith and Rahul Telang, Carnegie Mellon: Channels and Conflict: Efficient Marketing Strategies for Internet Digital Distribution Channels.
  2. Chrysanthos Dellarocas, Boston University and William Rand, University of Maryland: Media, Aggregators and the Link Economy: An Analytical and Empirical Examination of the Future of Content.
  3. Anita Elberse, Harvard University and Kenneth Wilbur, Duke University: What Is The Right Mix Between Offline And Online Advertising? A Study Of The Entertainment Industry.
  4. Arun Sundararajan, NYU and Gal Oestreicher-Singer, Tel Aviv University: The Breadth Of Contagion Of The Oprah Effect: Measuring The Impact Of Offline Media Events On Online Sales.
  5. Yakov Bart, Miklos Sarvary, Andrew Stephen, INSEAD: Consumer Responses To Mobile Location-Based Advertising.
  6. V Kumar, Vikram Bhaskaran and Rohan Mirchandani, Georgia State University: Measuring the Total Value of a Customer through Own Purchases and Word of Mouth Referrals: A Field Study in India.
  7. Alan Montgomery and Kinshuk Jerath, Carnegie Mellon: Predicting Purchase Conversion From Keyword Search Using Associative Networks.
  8. Shawndra Hill, University of Pennsylvania and Anand Venkataraman, 33Across: Collective Inference For Social Network-Based Online Advertising.
  9. Anindya Ghose, NYU: Modeling The Dynamics Of Consumer Behavior In Mobile Advertising And Mobile Social Networks.
  10. Jane Raymond, Bangor University: The Importance Of Relevance: Cognitive Science Research On Distraction By Advertisement On The Internet.
  11. Koen Pauwels, Dartmouth, Oliver Rutz, Yale, Shuba Srinivasan, Boston University and Randolph Bucklin, UCLA: Are Audience-Based Online Metrics Leading Indicators Of Brand Performance?  …
    Clients of WPP and Google may volunteer to provide case studies and data for research being conducted by award recipients. The specific study topics will dictate which clients and client data will be of most value to the research. The Program Committee will assist in identifying the most beneficial client contributions. The program sponsors (WPP & Google) will engage clients to solicit and secure their involvement.

Google Paper on “Opt-in Dystopias”: Doesn’t Reflect What Google Actually is doing with data

The Google Policy blog promoted a paper by two Google employees on the opt-in/opt-out policy debate.  The paper is worth reading, but its use is limited because it doesn’t reflect the actual online marketing data collection process.  Here’s what I just wrote on the Google site:

The authors need to revise their paper based on the goals and actual practices with online marketing and data collection done by Google and its affiliates. While it’s true that the binary opt-in, opt-out debate is unfortunately narrow, it is used to address far-reaching data collection and targeting strategies implemented by Google and other online marketers. The authors, for example, should examine Google’s use of neuromarketing for its YouTube advertising products; or the role of purposefully developed “immersive” multimedia tied to data collection by DoubleClick. They should analyze Google’s advertising goals, including what it promises to the largest pharmaceutical and financial advertisers, for example. Or examine the growing role of merging offline and online data collection tied to a specific user cookie to be auctioned off that is now routinely used in online ad exchanges (Google owns one such exchange). They should also reflect on how Google–when rushing to catch up with Facebook in the social media marketing business–launched its Buzz product without a careful analysis of its impact on data collection. Google’s researchers on privacy, in other words, would be more credible if they carefully analyzed how their own company uses–and plans to use–data. This issue deserves a robust debate–and we know the authors are sincere in their interest to make an important contribution. But they should also have been candid that Google is fighting off policy proposals from privacy advocates that would empower a user/citizen by allowing them to protect their privacy–including using opt-in.  The failure to have global policies that protect privacy is the high social and political cost the public should not have to bear.

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.”

Ad Agencies Expand the role of Neuromarketing: Time for EU and US Regulation

The continued growth of neuromarketing to create advertising messages that are crafted to target a consumer (and citizen) subconscious mind should be a top policymaker concern–and we have raised this with both the FTC and EU.  Here’s an excerpt from a recent major marketing company’s plans to expand its neuroscience based efforts:

Millward Brown has tasked its head of innovations Graham Page with setting up a neuroscience division with the goal of supplementing its existing advertising research offer with techniques that aim to uncover the inner workings of the human mind.

Page, who takes the role of executive vice president of consumer neuroscience, said the agency was banking on the division as being one of its big growth areas this year.

Advertisers, he said, were becoming more receptive to approaches like electroencephalography (EEG) brainwave measurement, eye tracking and implicit association tests – all of which will be rolled out across Millward Brown globally in the coming weeks and months.

Page said the company had been experimenting with neuroscience techniques for six years, but the creation of a dedicated division marked “an important milestone”, while the research approaches themselves promised “a different perspective” on how consumers respond to advertising and brand communications… Page said some 60 projects had already been completed across the US, UK and Europe, with clients including Panasonic, Kraft and Royal Mail.Partner companies include EmSense, which supplies Millward Brown with the EEG equipment used to record consumer brain activity.