Category: media ownership

A Microsoft/Yahoo! Deal will Raise Privacy and Competition Issues [Annals of Behavioral Targeting Mergers]

Microsoft and Yahoo!  should expect privacy and consumer groups to vigorously press regulators to closely and skeptically examine any deal–and at the very least urge them to impose a series of tough conditions on data collection and ad practices.  This digital duo will not get a free data collection pass from privacy and consumer groups, even if a new combination would provide much needed competition to Google.  Microsoft and Yahoo have created elaborate data collection services across platforms and applications, including for behavioral targeting.  They have competing ad targeting businesses in search, display and mobile, for example.  Both companies operate leading ad exchanges (where our profile data is bought and sold like food commodities). They also have competing ad targeting research and development efforts. Beyond the US, there are important competition and privacy issues for the EU as well.

A merger that further concentrates control by a dwindling very few over the digital marketing and advertising business illustrates how quickly consolidation has emerged as a principal and worrisome feature of the Internet era.

Progress & Freedom Foundation Comes to Aid of its Data-Collecting Backers (Using a `save the newspapers’ as a ploy to permit violations of consumer privacy protection!)

This report from Internetnews.com on the Progress and Freedom Foundation’s “Congressional” briefing illustrates how desperate some online marketers are that a growing number of bi-partisan congressional leaders want to protect consumer privacy.  So it’s not surprising that some groups that are actually financially supported by the biggest online marketing data collectors in the world would hold a Hill event to help out the friends who pay their bills.

It should have been noted in Ken Corbin’s that Google, Microsoft, Time Warner (AOL), News Corp. (MySpace) financially back the Progress and Freedom Foundation (PFF).  Other behavioral data targeting `want to be’s’ who monopolize U.S. online and other platforms are also backers:  AT&T, Comcast, NBC, Disney/ABC, Viacom/MTV/Nick, etc. For a list, see here.

PFF and some of its allies deliberately distort the critique of consumer and privacy groups.  We are not opposed to online marketing and also understand and support its revenue role for online publishing.  But many of us do oppose as unfair to consumers a stealth-like data collection, profiling and ubiquitous tracking system that targets people online.  One would suppose that as a sort of quasi-libertarian organization, PFF would support individual rights.  But given all the financial support PFF gets from the major online data collectors, how the group addresses the consumer privacy issue must be viewed under the `special interests pays the bills’ lens.

PFF and its allies are playing the ‘save the newspaper’ card in their desperate attempt to undermine the call for lawmakers to protect consumer privacy.  Newspapers and online publishers should be in the forefront of supporting reader/user privacy; it enhances, not conflicts, with the First Amendment in the digital era.  Finally, PFF’s positions on media issues over the years has actually contributed to the present crisis where journalism is on the endangered species list.  This is a group that has worked to dismantle the FCC, eliminate rules designed to foster diverse media ownership, and undermine network neutrality.

PS:  The article quotes from Prof. Howard Beales of George Washington University (and a fCV,ormer Bush FTC official with oversight on privacy).  Prof. Beales was on the PFF panel.  Prof. Beales, according to his CV has served as a consultant to AOL and others (including  Primerica and the Mortgage Insurance Companies of America).  Time Warner, which owns AOL, is a PFF financial backer.  All this should have been noted in the press coverage.

Google Does Behavioral Targeting. Why Is It Trying to Fool Users & PolicyMakers By Claiming it’s “Interest-Based” Advertising? [Annals of Commercial Surveillance]

Google has finally fully entered the behavioral targeting business, although they are trying to disguise it through an Orwellian change of language by calling it “interest-based” advertising. The world’s largest and most dominant online ad system is expanding its data collection and targeting activities whenever we search, view videos or read blogs.  This isn’t really about, as Google’s blog suggests, “more interesting” ads for consumers. It’s about a further expansion of Google’s already considerable data-mining and interactive marketing and data-tracking/targeting arsenal, which now also includes using neuroscience for its YouTube ads.  Google is further endorsing a global culture with data collection, profiling and targeting at its core.  No matter how Google attempts to frame it as “better for you ads,” digital advertising is designed to influence our behaviors in non-transparent ways.

This announcement, which was done so Google can better incorporate all the behavioral targeting technologies it acquired when it bought online ad targeting giant DoubleClick, is also designed to help head-off the enactment of privacy laws in the US and EU (Google isn’t alone here.  Microsoft, Yahoo and others are in a global race in attempt to preserve the data collection status quo under the cover of industry self-regulation).  Giving consumers access to their (incomplete and likely to constantly be revised with even more targeting categories) profile has to be viewed with such a perspective–it serves as a smokescreen so Google can broaden its data collection and targeting (and become even more dominant in the global online ad business).  Instead of having the default be no data collection without prior expressed informed consent, Google has created the system as an flawed opt-out.  Missing from what users should know and control in their profile are the applications online marketers use to develop the ad so it can more effectively target (and collect data), including: neuromarketing, viral videos, rich immersive media, social networks, online product placement, etc.

Yesterday, Google should have called on Congress, the EU and other governments to enact meaningful consumer privacy safeguards.  While it is entirely to be expected that as the world’s largest online ad company Google would fully embrace behavioral targeting,  it’s also unfortunate.  Eventually–and we hope soon–responsible shareholders, such as socially conscious investment funds, and global regulators will hold Google–and other online marketers–more accountable to the public.

But stay tuned for the next entry, on what Google, Microsoft and Yahoo have done to evade privacy safeguards for behavioural targeting in the UK!

The real digital TV transition: Why TV “Advanced Advertising” [aka Project Canoe] Raises Privacy & Consumer Protection Concerns

The cable and telephone industry have Google envy.  These broadband communications giants recognize that online advertising companies such as Google and Yahoo have created an enormous market for themselves through the delivery of online ads.  Comcast, Time Warner, Verizon and others want to use their Bush Administration-given broadband monopoly status to gain a significant share of this market.  Cable giants are also working together to transform television so it can better compete with online, and target viewers with more precision and in-depth ads.  The goal–for cable, phone and online ad companies–is to eventually provide a seamless system that tracks, profiles and targets us across every “screen,” including TV, PC and mobile.

Comcast is heavily investing for such a viewer/user tracking world.  It has plans, according to the trade publication Multichannel News to create a “gigantic database called “TV Warehouse,” able to store a full year of statistics gathered from digital set-tops in more than 16 million households nationwide…TV Warehouse, envisioned as having a massive 500 Terabytes of storage, would then feed up to a database even broader in scope operated by Canoe Ventures, the advanced-advertising venture formed by Comcast and five other large MSOs.  The idea: to give advertisers an enormous set of actual viewing metrics — showing exactly what millions of cable customers watched and when — as opposed to representative samples.”

Not surprisingly, Comcast’s Brian Roberts has said his company should no longer be viewed as merely a provider of television:  “Over the last few years we have successfully transformed Comcast from a cable company into a new products company that utilizes one infrastructure to deliver a growing number of products.”  Advanced Advertising, which is what the cable industry’s technical consortium known as CableLabs calls it, is one of the major products Comcast and others will soon provide.  According to CableLabs, “Advertising is growing in importance for cable operators. CableLabs is currently supporting activity in four areas designed to create new revenue opportunities around advanced advertising technologies. These areas are digital ad insertion, interactive advertising, reporting, and addressability.”   Cable executives are working with advertising companies to “…agree on a valuation metric. What’s a click worth?”

But the core concern with Advanced Advertising is the tracking of viewers, including the use of internal and outside databases for targeting. Comcast Spotlight, for example, offers marketers access to a broad range of databases for more precise targeting. Acxiom offers cable and other providers a host of database segmentation services, including its Personicx VisionScape. “With PersonicX VisionScape, marketers have at your fingertips real-time access to a wealth of information… that can help them understand more about their customers – what type of products they use, their purchasing behaviors, their channel and media preferences.  The PersonicX household-level segmentation system is built with InfoBase-Xâ„¢ data and places almost every U.S. household into one of 70 distinctive segments and 21 life stage groups based on specific consumer behavior and demographic characteristics.”

Cable’s work to create a more powerful viewer data collection and targeting system has been out of public and policymaker view.  Cable engineers have been working  together to perfect the technology that will allow it to merge “content and subscriber metadata for targeting zones (or, in a unicast environment, for targeting individuals) to bring the right ad to the right consumer at the right time.”

The phone and cable companies, knowing that the 1984 Cable Communications Act contains privacy safeguards for interactive TV ads and aware of the current debate on behavioral targeting, claims that such data collection and targeting will be anonymous and could include an “opt-in.”  We don’t believe any cable or phone consumer is being told the extent of the plans underway to track and target them.  For example, Alcatel’s product for IPTV related advanced advertising explains that:
“To capture the full revenue potential of targeted and interactive advertising, IPTV providers need to ensure that the following critical actions are addressed:

  • Capture and measure — The network must be able to collect “opt-in” subscriber information from a broad range of databases, which advertisers will use to reach specific “targeted” markets. This anonymous data includes usage patterns, subscriptions, demographics, location, presence and preferences — including how, when and where advertising messages are delivered, along with the type of device that is used. In addition, accurate measurement capabilities are needed that can verify audience response and track the effectiveness of ad campaigns…
  • Activate and interact — Finally, this data, combined with the right systems and infrastructure must be able to deliver personalized and interactive ads to the right consumer, at the right time.”

Consumers/subscribers should decide whether such an advanced system can target them at all.  Beyond informed consent (and data security), there need to be clear safeguards.  Targeted ads for financial, health, and products aimed to children and adolescents raise consumer protection issues.  I have real concerns about “ethnic” profiling, given how lucrative advertisers realize the Hispanic and African American markets are.  We believe that the cable industry has to engage the public in a serious debate about the scope and goal of its Project Canoe and advanced advertising initiative.  Congress, the FCC, and the FTC must become more proactive to protect our privacy from this new approach.

PS:  This week’s Multichannel News offers insight into the latest developments.  Here’s an excerpt:  “This year, the largest cable operators in the U.S. plan to have upgraded at least 20 million digital set-tops with code to run standardized interactive-TV applications. That will make it possible for viewers to click a button on their remote to, say, ask an advertiser to e-mail them more information…The industry over the last two years has coalesced around a common technical standard, maintained by CableLabs, referred to as Enhanced Binary Interchange Format, or EBIF (pronounced “EE-biff”)…Comcast, for one, claimed it had deployed EBIF user agents on more than 10 million Motorola set-top boxes by the start of 2009. The operator hopes to complete the rollout to its entire Motorola footprint, about 20 million boxes, by midyear…” [Interactive TV Begins to Bloom.  Todd Spangler.  Multichannel News.  March 3, 2009].

Baby Steps for Online Privacy: Why the FTC Self-Regulatory Principles For Online Behavioral Advertising Fails to Protect the Public

Statement of Jeff Chester, Exec. Director, Center for Digital Democracy:

The Federal Trade Commission is supposed to serve as the nation’s leading consumer protection agency.  But for too long it has buried its mandate in the `digital’ sand, as far as ensuring U.S. consumer privacy is protected online.    The commission embraced a narrow intellectual framework as it examined online marketing and data collection for this proceeding.  Since 2001, the Bush FTC has made industry self-regulation for privacy and online marketing the only acceptable approach when considering any policy safeguards (although the Clinton FTC was also inadequate in this regard as well).  Consequently, FTC staff—placed in a sort of intellectual straitjacket—was hampered in their efforts to propose meaningful safeguards.

Advertisers and marketers have developed an array of sophisticated and ever-evolving data collection and profiling applications, honed from the latest developments in such fields as semantics, artificial intelligence, auction theory, social network analysis, data-mining, and statistical modeling.  Unknown to many members of the public, a vast commercial surveillance system is at the core of most search engines, online video channels, videogames, mobile services and social networks.  We are being digitally shadowed across the online medium, our actions monitored and analyzed.

Behavioral targeting (BT), the online marketing technique that analyzes how an individual user acts online so they can be sent more precise marketing messages, is just one tool in the interactive advertisers’ arsenal.  Today, we are witnessing a dramatic growth in the capabilities of marketers to track and assess our activities and communication habits on the Internet.  Social media monitoring, so-called “rich-media” immersive marketing, new forms of viral and virtual advertising and product placement, and a renewed interest (and growing investment in) neuromarketing, all contribute to the panoply of approaches that also includes BT.  Behavioral targeting itself has also grown more complex.  That modest little “cookie” data file on our browsers, which created the potential for behavioral ads, now permits a more diverse set of approaches for delivering targeted advertising.

We don’t believe that the FTC has sufficiently analyzed the current state of interactive marketing and data collection.  Otherwise, it would have been able to articulate a better definition of behavioral targeting that would illustrate why legislative safeguards are now required.  It should have not exempted “First Party” sites from the Principles; users need to know and approve what kinds of data collection for targeting are being done at that specific online location.

The commission should have created specific policies for so-called sensitive data, especially in the financial, health, and children/adolescent area.  By urging a conversation between industry and consumer groups to “develop more specific standards,” the commission has effectively and needlessly delayed the enactment of meaningful safeguards.

On the positive side, the FTC has finally recognized that given today’s contemporary marketing practices, the distinction between so-called personally identifiable information (PII) and non-PII is no longer relevant.  The commission is finally catching up with the work of the Article 29 Working Party in the EU (the organization of privacy commissioners from member states), which has made significant advances in this area.

We acknowledge that many on the FTC staff worked diligently to develop these principles.  We personally thank them for their commitment to the public interest.  Both Commissioners Leibowitz and Harbour played especially critical roles by supporting a serious examination of these issues.  We urge everyone to review their separate statements issued today.  Today’s release of the privacy principles continues the conversation.  But meaningful action is required.  We cannot leave the American public—now pressed by all manner of financial and other pressures—to remain vulnerable to the data collection and targeting lures of interactive marketing.

FTC’s Behavioral Ad Principles–the last act of the Bush Administration? Why is the Obama White House Allowing the FTC To Remain Under the Leadership Appointed by Pres. Bush?

In a few hours, approximately between 10-11 am eastern, the FTC is expected to release its final “Online Behavioral Advertising Principles.” Originally released for comment in December 2007, the principles are a sort of Valentine’s Day present to the online ad industry from the (supposedly departed) Bush Administration.  From what we know, the FTC principles support self-regulation.  Online marketers will be told they should behave better–and here are suggestions.  It’s like a teacher telling a misbehaving student–‘behave better, dear,’ or else we will have to tell your parent (in this case, the guardian being potential congressional action).

My CDD urged Commissioners Harbour and Leibowitz to issue separate statements on the principles, and call for tougher requirements—especially in the area of so-called sensitive information.  This would include data connected to our financial and health related online activities (think mortgage and loan applications or queries for prescription drugs).  CDD and a coalition of groups also formally asked the commission to impose serious privacy safeguards for both children and adolescents.

But these principles were crafted within the narrow confines of the Bush Administration philosophy prevailing at the FTC.  Only self-regulation is permitted.  Consequently, such an approach likely means these rules leave the online data collection, profiling and targeted marketing system which comprise behavioral marketing off the privacy protection hook.

But one question looms at the moment.  Why has the new Obama administration allowed the FTC to remain under the leadership of Bush-appointee William E. Kovacic? The principles being issued today, in fact, reflect the “old” FTC, not one run under the philosophy of President Obama.  Why is the Obama White House failing to ensure a change of leadership at the FTC?  The agency is responsible for overseeing a huge portion of the economy, including critical financial issues.  It’s also supposed to be the leading agency on consumer protection issues.   The Obama White House should have–by now-found someone who would led the FTC, so it can better protect the public.

The principles being released today were only made possible because of the Bush FTC give-away to Google, when it approved its takeover of online ad giant DoubleClick.  CDD, the Electronic Privacy Information Center (EPIC), and USPIRG fought the merger, including on privacy grounds.  FTC Commissioner Pamela Harbour played a key role forcing the agency (then run by Chairwoman Majoris, whose husband’s law firm represented DoubleClick) to address the privacy concerns. As a consequence of the political pressure from its failure to seriously examine the consumer privacy issues of the Google deal, the FTC staff were told to develop these principles.

The next chair of the FTC needs to take privacy and online consumer protection issues seriously.  The agency does need more resources, but also a new spirit.  If the FTC had been on the job, and was examining how lending institutions were recklessly promoting loans and mortgages, maybe today’s mess wouldn’t be as tragic as it is.  More to come after the commission releases the principles.

Outside DoJ Expert Litvak on Why Google/Yahoo Deal was Opposed: “Google had a monopoly”

From American Lawyer Daily’s interview with Sandy Litvak (the outside expert DoJ asked to review the now scuttled Google/Yahoo search ad combine). Excerpt: “Google Inc. and Yahoo! Inc. called off their joint advertising agreement just three hours before the Department of Justice planned to file antitrust charges to block the pact, according to the lawyer who would have been lead counsel for the government. Sanford “Sandy” Litvack left Hogan & Hartson in September to consult for the department’s antitrust division on a possible court challenge to the Web giants’ agreement. The companies abandoned the deal in November after the Justice Department informed them it would seek to block the deal. “We were going to file the complaint at a certain time during the day,” says Litvack, who rejoins Hogan & Hartson today. “We told them we were going to file the complaint at that time of day. Three hours before, they told us they were abandoning the agreement.”…The never-filed government complaint would have charged that the agreement violated Sections 1 and 2 of the Sherman Act, Litvack tells the Am Law Daily in one of his first interviews since the companies canned the venture. Section 1 bans agreements that restrain trade unreasonably. Section 2 makes it unlawful for a company to monopolize or attempt to monopolize trade.

“It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly,” Litvack says.


source: Hogan’s Litvack Discusses Google/Yahoo. Nat Raymond. TheAmLaw Daily. Dec. 2, 2008

Two years after CDD & USPIRG warn about online advertising & media consolidation, a call to “monitor the state of competition”

Yesterday, Sen. Herb Kohl, the chair of the Senate Antitrust Committee, sent a letter to the Department of Justice about the proposed Google/Yahoo alliance. Two years ago next month, in its initial complaint filed at the Federal Trade Commission calling for an investigation into behavioral online ad targeting, CDD and USPIRG also petitioned the agency to open up an antitrust investigation. It was clear two years ago–as one surveyed the dizzying global shopping spree by Google, Yahoo, Microsoft, Time Warner/AOL–that a tiny handful would soon dominate the online ad market. Given that online ad revenues are the key to the funding of almost all interactive and online content, we were disturbed by the trend then towards consolidation. Of course, fewer companies controlling all that consumer data also raised fundamental privacy concerns.

Two years later, of course, we have even fewer independent companies left standing. Google swallowed DoubleClick (and is poised to partially operate Yahoo); Yahoo acquired Blue Lithium and Right Media; Microsoft acquired giant aQuantive; Time Warner bought Tacoda and Third Screen Media. Etc.

Regulators on both sides of the Atlantic have been asleep at the digital switch. They have failed to both protect competition and privacy. However, there is a growing awareness that there are serious problems looming. As we know, the same deregulatory philosophy which helped wreck our economy is also the foundation for communications and media policy. It is accompanied, of course, by a `golden’ revolving door between government and private industry that has left consumers and citizens vulnerable to a wholesale set of unfair practices. Addressing these issues will be the focus of much work over the next several years.

The Financial Meltdown & Media Deregulation Connection

Much of journalism has a `deer-caught-in-the-headlights’ quality as it reports on the current fiscal crisis. Why was this issue off the radar screen for so many reporters and producers? Part of it is that the very system that underlies professional reporting is connected (and funded) by the very forces that have helped wreck the economy. But over the last ten years, journalism in the U.S. has undergone a further serious deterioration, with its ranks thinned. Investigative reporting is on the endangered professions list (with investment bankers perhaps now joining that list as well).

Media consolidation has helped play a role here, further contributing to a news culture where reporters and their parent news organizations really don’t spend time examining beneath the surface of events. All the media mergers we have witnessed since the 1996 Telecom Act has decimated newsrooms, slashed news budgets, and has left journalism on life support (at best).

Just as the Congress failed to engage in meaningful oversight of the financial markets–and spurred the crisis along through deregulation– so too have they largely failed to address the impact of what’s called media deregulation (which meant eliminating rules designed to benefit both the public and press with policies that favored their largely giant corporate owners). As we write in Digital Destiny, Republican and Democrats have long been captured by the influence-wielding (and job promising and donation giving) Big Media “well-connected.” We blame the current deep crisis that has undermined the country’s system of reporting and journalism on the failure of policymakers to ensure meaningful diversity of ownership, public service rules, and new proactive policies which would have addressed this critical problem.

Former FCC Chairman Michael Powell’s key congressional patron was Sen. John McCain. Powell’s enthusiastic and uncritical embrace of a deregulatory philosophy during his recent tenure at the helm of that oversight agency helped spur media mergers, journalism lay-offs and other editorial cutbacks. Powell is currently a “technology adviser” for the McCain campaign.  For those of you who are interested in learning more about Mr. Powell and Senator McCain, it’s covered in Digital Destiny (New Press, 2007).

We don’t want to suggest our column is intended to be partisan. Many people know we have been equally critical for the failure of William Kennard, Mr. Powell’s predecessor during the Clinton era, to respond to the call by consumer groups to implement open access for broadband (now known as network neutrality). Mr. Kennard is one of Senator Obama’s major donors. We were also critical of Reed Hundt, Mr. Kennard’s predecessor. Both Pres. Clinton and Al Gore hailed the passage of the 1996 Telecom Act. Frankly, we have concerns about the fate of public interest media and telecommunications policies regardless of who wins the election. But it’s important, in our view, to recall history–including the recent events involving former FCC chairman Michael Powell. How both candidates would fix the mess with our communications system–including ensuring meaningful content and ownership diversity for digital media–should be part of the national debate.

We should realize by now that deregulation of the financial markets contributed to a culture of greed that bought down—at taxpayers expense–an economic house of cards. Fixing our system of journalism for the digital era must be on the policy agenda [we need legions of investigative reporters asap].

Google Policy Blog Fails to Address Yahoo! Deal & Threat to Competition & Privacy

Google’s post today by Tim Armstrong on why its proposed deal with Yahoo! isn’t a competition problem attempts to weave and spin this critical issue. It’s very revealing as well about Google’s own failure to develop into a company which honestly engages in self-examination and reflection. As one can see from the current melt-down of the financial markets, making money shouldn’t be the sole motivation for behavior. Google should have been able to acknowledge that a major deal with its leading search competitor raises serious questions worthy of broad debate and critical analysis.

The failure of Google to respond to the concerns raised by the World Association of Newspapers this week is reflective of this. Newspapers and content publishers are rightly worried about ensuring a diversity of funding sources for the production of news and other information necessary for a democratic society. It’s not as simple as Google’s Tim Armstrong (who wrote today’s post) suggests, that this deal with give consumers “relevant ads” and help keep Yahoo afloat as a robust competitor. In fact, Armstrong and Google, we believe, aren’t being candid here. When an online ad company dismantles (or turns over) a core part of its search function to its leading competitor, it becomes fatally wounded. As Google knows all well, search and display (and online content) are all intertwined. Yahoo’s future, in my opinion, as a full service online ad company is endangered, as more businesses realize that its search ad business relies increasingly on Google.

There are many troubling privacy issues with this deal, something Mr. Armstrong tries to dismiss by saying that [our emphasis]: “[W]e have taken steps in the Yahoo! agreement to make sure that neither company has access to personally identifiable user information from the other company.” But that leaves open an array of personal data collection points, such as cookies, IP addresses, and other statistical analysis online related data. (The failure, by the way, for the privacy issues of the proposed deal to be investigated by the FTC and Congress, is also disturbing).

Mr. Armstrong is Google’s “President, Advertising and Commerce, North America.” He directs their online ad sales. In responding to concerns about competition in the online advertising market–given its links to broader societal concerns–more than just assurances from the sales department is required.