Actually, the ad giant says it’s calling its new research arm the Institute of Decision Making. But given their plan to harness neuromarketing to better tap into the “instinctual ways that consumers behave,”Â we think it should be renamed.Â At the Cannes ad festival, Draftfcb discussed, according to a report, “how advertising messages have a mere 6.5 seconds to make a connection with the audience.”Â A Draft exec. told the New York Times that “[U]nderstanding the foundation of consumersâ€™ behavior decisions has become more complex [as they] consume more information and make decisions fasterâ€ [than before].Â Â Hence, marketers like Draft–whose clients include MillerCoors and Levis–want to use neuroscience to create ads that deliberately bypassÂ a consumers rational decision-making system. Â The ad agency is working with academics at UC Berkeley and Stanford–raising questions about the role scholars should play helping marketers–or anyone else–deliberately tap into our subconscious minds in order to influence our behavior.
The Berkman Center is well-known for its work on digital media issues.Â But it has often failed to address–in its research and public work–the negative consequences of online marketing and interactive advertising.Â Berkman is partially funded by leading online marketers–including Google and Microsoft.Â When Berkman conducts research on such issues as children’s online marketing and privacy [an issue I am involved with], it should always prominently disclose on the first publication page its funding conflicts–including whether Berkman staff work with online marketers.Â Berkman should tell Congress and the FTC about such conflicts when it submits research and testimony.
For example, Berkman’s faculty co-director John Palfrey works for a venture investing firm that financially backs behavioral targeting and other online marketing companies.Â Professor Palfrey does disclose on his blog that in addition to his Harvard duties, he is also a “Venture Executive” at Highland Capital Partners.Â Highland’s “Internet and Digital Team,” which Prof. Palfrey serves on, has one current investment in Affine Systems, a video targeting company. Affine’s Video Platform explains it enables marketers to engage in behavioral targeting:Â “Affine integrates behavioral data from exchanges and exclusive third-party partnerships. This data is used to audit and optimize campaigns as they run. Detailed analytics are collected, and valuable retargeting data is generated with every campaign.”Â [“What makes the Video Targeting Platform special is the amount of insight it provides…by taking advantage of the data provided by Affine’s data partners, you can even target specific demographic or psychographic groups, and reduce the waste that is currently expected from online video buys.”].Â Highland also invests in search engine and interactive TV companies serving the China market and many others. [Given the investments in China’s online market by Mr. Palfrey’s company, it also raises questions about Berkman’s Global Network Initiative role evaluating how companies like Google and Yahoo operating in China and elsewhere address human rights].Â Previous online marketing (and behavioral targeted related) investments made by Highland included the youth online targeting company Bolt, Coremetrics, and mobile ad targeting company Quattro.
The well-known online analyst and commentator Dana Boyd is a Fellow at Berkman, and has made it clear she also works for Microsoft Research.Â But given Microsoft Advertising global efforts to extend the power of online marketing and personalized data collection, including its online ad research lab in Beijing, its support for neuromarketing in digital ads, and its extensive behavioral and online targeting apparatus–including for junk food targeting youth in its gaming divisions, we hope Ms. Boyd will more closely examine her employers work in the area.
Yesterday, the online ad lobby [IAB, ANA, DMA]–working with Chamber of Commerce–scored a major political victory by forcing the Financial reform bill conference committee to drop proposed provisions that would have strengthened the FTC.Â Under the House bill, the FTC would have been given the same kind of regulatory authority most federal agencies have [APA rulemaking].Â Marketers and advertisers are celebrating their win, because it keeps the FTC on a weakened and short political leash.Â While consumer protection is significantly expanded because of the CFPB and new financial rules, the FTC is to remain largely hamstrung.Â The online marketing and advertising lobby [including ANA, DMA–see below] were afraid that the newly invigorated FTC under Pres. Obama would require the industry to protect privacy online and also become more accountable to consumers engaged in e-commerce.Â Â I heard IAB and Chamber are dancing in the streets! Congressmen Barney Frank, Henry Waxman and Sen. Rockefeller deserve praise for working hard to protect consumers, including their proposal on the FTC.
Here’s what two of the ad groups placed on their sites about the FTC issue:
Progress on FTC Enforcement Provisions in Wall Street Reform Conference
June 23, 2010
The marketing and media community has made substantial progress on defeating the broad expansion of FTC powers that is included in the House version of the Wall Street reform bill.Â But we still need your assistance to keep these provisions out of the final bill.
Yesterday the Senate conferees presented an offer on the bill that rejected the new FTC powers that are in the House version.Â Chairman Dodd indicated that while he may support changes in the Magnuson Moss rulemaking process, there is no Senate provision and these issues are too complex and important to be resolved in the context of the Wall Street reform bill.Â Conferees hope to finish the conference this week so the final bill can be cleared for the President’s signature next month.
The House conferees may still continue to push for these provisions, so it is very important that marketers contact the Senate conferees to express our appreciation for their support and to urge them to remain strongly opposed to these new powers for the FTC in this bill.Â Contact information for the Senate conferees is located here and our letter to Senate conferees is available here.Â Please let the Senators know if you have plants or operations in their states.
ANA took part in a very important meeting yesterday with Senate Commerce Committee Chairman Jay Rockefeller on these issues.Â We argued that these issues are very important to the entire marketing community and deserve careful consideration outside of the context of the Wall Street reform bill.Â The Chairman strongly indicated that he will continue to push for changes in the Magnuson Moss rulemaking procedures this year.
If you have any questions about this matter, please contact Dan Jaffe (email@example.com) or Keith Scarborough (firstname.lastname@example.org) in ANA’s Washington, DC office at (202) 296-1883.
DMA Asks Financial Reform Conferees to Keep FTC Expansion Out of ‘Restoring American Financial Stability Act’
June 10, 2010 â€” The Direct Marketing Association (DMA) today was joined by 47 other trade associations and business coalitions in sending a letter to each of the conferees on H.R. 4173, the â€œRestoring American Financial Stability Actâ€ (RAFSA), urging them to keep language that would dramatically expand the powers of the Federal Trade Commission (FTC) out of the final bill.
As the House and Senate conferees work to reconcile their versions of the financial regulatory legislation, the associations â€” which represent hundreds of thousands of US companies from a wide array of industry segments â€” expressed strong opposition to provisions in the House version of the bill that would expand the FTCâ€™s rulemaking and enforcement authority over virtually every sector of the American economy.
â€œThe balance struck in the Senate bill is the right one,â€ said Linda Woolley, DMAâ€™s executive vice president, government affairs.Â â€œThat bill makes the most sense in the context of financial reform legislation, maintaining the FTCâ€™s existing jurisdiction without expanding its rulemaking and enforcement authority over industries and sectors that had nothing to do with the financial crisis.Â Issues of FTC expansion deserve their own due consideration and debate in the more appropriate context of an FTC reauthorization, as has been done in the past.â€
DMA and the other associations strongly believe that granting the FTC broad new authority is not a necessary or relevant response to the causes of the recent recession and, therefore, asked the conferees to oppose the inclusion of any provisions that would expand FTC authority, rather than making changes to the Commission that would have a fundamental impact on the entire business community and the broader American economy.
For more information please visit www.dmaaction.org.
Last year, CDD and USPIRG filed a complaint on mobile marketing, privacy and deceptive practices at the FTC.Â We know that it woke up the commission to the issue–but they are acting too slow.Â The recent decision by Apple to expand its data gathering for location ad targeting on the iPhone (and do a about-face on the privacy issue, really) is just one example of why safeguards are required immediately.Â As Mobile Marketer explained in an article about what Apple is doing:
â€œLocation is an important element that illustrates the promise of mobile and social,â€ he said. â€œLook at the way that the mobile environment is developingâ€”proximity marketing is really the direction that weâ€™re headed [Noah Elkin, senior analyst at eMarketer].
â€œBeing able to marry data about a userâ€™s location and data about a userâ€™s likes and dislikesâ€”being able to present a relevant offerâ€”raises the bar in terms of the relevancy of the advertising messages.â€…Apple acquired Placebase and Quattro recently, which gives it a mapping platform and an ad network.
â€œCollecting user positioning data is the next necessary ingredient for â€˜location intelligence,â€™ which will bridge the gap between these two acquisitions and enable them to deliver a really relevant experience based on place and time,â€ Mr. Goodman said [Alistair Goodman, CEO of 1020 Placecast].
Meanwhile, companies like Loopt that merge social and mobile marketing techniques are extending how they target consumers, inc. data collection.Â Loopt explains in its new “mobile rewards” service for marketers that:
Loopt Star offers retailers a virtual loyalty card, allowing them to connect directly with their customers when theyâ€™re out and about, driving foot traffic and encouraging repeat visits. It offers retailers and businesses a unique â€œcost per visitâ€ business model.
â€œHyper-local advertising should be about much more than simply clicking on a banner adâ€”it should be about connecting with brands and getting rewarded for loyalty. Brands want to turn their existing customers into better ones,â€ said Sam Altman, co-founder and CEO of Loopt. â€œLoopt Star enables brands to create customized campaigns that reach their customers in a completely targeted, interactive way that rewards the behaviors they want.â€
In addition to brand-specific customized rewards, Loopt Star will also allow the person with the most check-ins at a specific place to become the â€œBossâ€ of that location. Leaderboards allow users to compete with their Facebook friends to for the most check in points. Dozens of hidden Achievements will also be available to Loopt Star game players at launch â€” to be won when certain check-in actions are performed.
Loopt Star adds a key social component by being the first mobile location App based purely on Facebook Connect. Users can share their current location in real-time with all of their friends on Facebook, and alert friends via their Facebook News Feed about special offers they see on Loopt Star that are available to anyone. With its close integration into Facebook, Loopt Star allows Facebook friends stay up to date on where friends are and what theyâ€™re doing…
Brands can use Loopt Star to create fun, engaging campaigns that deliver foot traffic, connect with customers, build a strong community and increase their Facebook fan base. Customized brand campaigns can specify:
- The qualifying retail locations
- The qualifying time of day, day of week, or time span
- The qualifying number of check in times
- Whether they need to check in with friends, and the number of friends
- Which rewards are available to friends through the Facebook newsfeed (for example, â€œthe next person to check into Joeâ€™s Restaurant today gets free dessertâ€ can appear on the newsfeed to all Facebook friends.)
- Specific and virtual rewards, such as Achievements, special titles, discount coupons, etc. Special titles allow retailers to offer a custom â€œBossâ€ title and graphic to the person who checks in the most at an individual location
Loopt is working directly with top brands to customize all aspects of Loopt Star, from the activity needed to earn the reward, to the type of virtual or real-world reward earned.
For example, Loopt Star users can check into any bar in the United States with two Facebook friends, and everyone instantly earns five free songs from leading popular music recording artists. (To see the songs available to win, go to http://www.amplified.com/loopt.)
One of the areas requiring online privacy and consumer safeguards is the health and medical area.Â As CDD told the FDA, the use of behavioral data profiling & targeting, immersive multi-media techniques, social marketing [via stealth-like influencer and word-of-mouth tactics, and brand channels, such as on YouTube, raise a host of concerns.Â I don’t believe one’s largely private concerns about a health condition or remedy should automatically be fodder for digital marketing.Â To see how important the health online marketing is to Google (and others), here’s an excerpt from a “Consumer Packaged Goods or Healthcare Industry Marketing Manager job opening:
Google is at the forefront of a revolution in Marketing – a shift from traditional Marketing tactics to new online, mobile and social strategies. Google’s advertising platforms provide savvy advertisers with multichannel marketing opportunities, linking online marketing to brand impact and offline sales.
Consumer Packaged Goods or Healthcare Industry Marketing Manager position shapes Google’s point of view on the changing advertising landscape. This leader will uncover, understand and explain the impact of evolving online media to industries that have traditionally relied more on offline media, such as healthcare, CPG, restaurants, education and more. This is a unique opportunity to set Google marketing strategy within our Emerging Industries practice and advise Fortune 1000 advertisers on cutting edge marketing strategies. You will arm the Google salesforce with marketing programs that establish fresh thinking in the industry and deepen engagement with clients…
- Ideate, develop, and execute marketing campaigns that drive Google’s advertising business.
- Develop thought-leadership materials, client/executive presentations, case studies and other content designed to accelerate our business momentum and better engage Google’s customers.
- Develop compelling positioning and messaging for Googleâ€™s advertising solutions targeted to companies in industries relatively new to online marketing, such as healthcare and CPG
- Partner with Google’s market research team to identify, execute and package compelling market research that supports Google’s value proposition to large advertisers in these industries.
- Evangelize Google’s value proposition, best practices and perspectives to our customers and our industry peers via events, webinars, and other direct client communications channels.
CDD will soon file at the FTC on how to ensure the Children’s Online Privacy Protection Act [COPPA] can better protect the online privacy of children under 13.Â It’s a 1998 law that we led the campaign to have enacted.Â Here’s a brief excerpt from what our colleague Prof. Kathryn Montgomery told the FTC today:
Statement of Kathryn C. Montgomery, PhD
Professor, School of Communication
Protecting Kidsâ€™ Privacy Online: Reviewing the COPPA Rule
Federal Trade Commission
June 2, 2010
For the past decade, the Childrenâ€™s Online Privacy Protection Act (COPPA) has served as an effective safeguard for young consumers in the online marketing environment. Because the legislation was passed during the early stages of Internet e-commerce, COPPA established a clear set of â€œrules of the roadâ€ to help guide the development of the childrenâ€™s digital marketplace. The law created a level playing field, ensuring that every commercial playerâ€”from the largest childrenâ€™s media companies to the smallest start-ups â€“ would treat young people fairly.
Congress intended COPPAâ€™s basic framework to be flexible, anticipating changes in both technology and business practices, and requiring periodic reviews by the Federal Trade Commission to ensure its continued effectiveness. Todayâ€™s children are growing up in a ubiquitous digital media environment, where mobile devices, instant messaging, social networks, virtual reality, avatars, interactive games, and online video have become ingrained in their personal and social experiences. The online marketing practices of the 1990s have been eclipsed by a new generation of tracking and targeting techniques.
In its current review, the Federal Trade Commission must ensure that its COPPA rules include the full range of Internet-enabled or -connected services, including the increasingly ever-present cell phones children use, along with Web-connected gaming devices and online, interactive video.Â Moreover, COPPAâ€™s definition of personal information must be revised to include the latest methods of identifying and targeting online consumers, covering the so-called â€œcookiesâ€ that are used for interactive marketing data collection, as well as â€œmobile geo-location information.â€ With these and other necessary updates, the law will continue to ensure that children reap the benefits of the digital age without compromising their privacy, safety, and wellbeing.
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.Â 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 canâ€™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:Â Making the Emotional Connection:Â Advanced neurological research reveals deeper insights into ad effectiveness by medium.Â Yahoo.Â May 17, 2010.