Some commentators–and groups funded by online marketers that target teens–are worried that proposals to the FTC and Congress that adolescent privacy be protected will somehow create a system that requires forms of age verification online. The coalition of leading consumer, child advocacy, health and privacy organizations filing comments at the FTC last week aren’t calling for the parental permission paradigm used by the Children’s Online Privacy Protection Act [COPPA] be extended to teens. But there are many online commercial services specifically targeting adolescents–that’s their target market. It’s those sites and services specifically focused on adolescents that we want to have better privacy safeguards.  We want those sites to be governed by an opt-in regime that gives teen users meaningful control of how their information is collected and utilized. Those sites should be required to engage in the Fair Information Principles known as “data use minimization.” Commercial sites targeting adolescents should make its data collection practices fully transparent and under the control by the teen (including a truly accessible privacy policy). In another words, a privacy safeguard regime that really should be available for everyone. Teens are ‘ground zero’ for much of digital marketing–for examples see our site: www.digitalads.org [especially the update section]. If you look at the reports on that site, you will see that the most recent scholarly thinking is that brain development in adolescents occurs much later than what was once thought. They don’t have the ability to effectively understand the intent of highly sophisticated interactive marketing and the corresponding data collection which underlies contemporary digital advertising. That’s why empowering them so they can protect their privacy strengthens their rights.
Category: neuromarketing
Draftfcb uses neuromarketing, academic ties to create Institute for Subliminal Advertising
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,” we think it should be renamed. 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.” A Draft exec. told the New York Times that “[U]nderstanding the foundation of consumers’ behavior decisions has become more complex [as they] consume more information and make decisions faster†[than before].  Hence, marketers like Draft–whose clients include MillerCoors and Levis–want to use neuroscience to create ads that deliberately bypass a consumers rational decision-making system.  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.
Online Ad Lobby and Chamber Celebrate Victory over Consumer Protection & FTC
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. Under the House bill, the FTC would have been given the same kind of regulatory authority most federal agencies have [APA rulemaking]. Marketers and advertisers are celebrating their win, because it keeps the FTC on a weakened and short political leash. While consumer protection is significantly expanded because of the CFPB and new financial rules, the FTC is to remain largely hamstrung. 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.  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. 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. 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. 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. Contact information for the Senate conferees is located here and our letter to Senate conferees is available here. 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. 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. 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 (djaffe@ana.net) or Keith Scarborough (kscarborough@ana.net) in ANA’s Washington, DC office at (202) 296-1883.
http://www.ana.net/advocacy/content/2418
DMA Asks Financial Reform Conferees to Keep FTC Expansion Out of ‘Restoring American Financial Stability Act’
June 10, 2010 — 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 “Restoring American Financial Stability Act†(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 — which represent hundreds of thousands of US companies from a wide array of industry segments — expressed strong opposition to provisions in the House version of the bill that would expand the FTC’s rulemaking and enforcement authority over virtually every sector of the American economy.
“The balance struck in the Senate bill is the right one,†said Linda Woolley, DMA’s executive vice president, government affairs. “That bill makes the most sense in the context of financial reform legislation, maintaining the FTC’s existing jurisdiction without expanding its rulemaking and enforcement authority over industries and sectors that had nothing to do with the financial crisis. 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.
http://www.the-dma.org/cgi/dispannouncements?article=1449
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.
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 milestoneâ€, 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.
Where Does Google and Microsoft Really Stand–with the IAB and ad lobby or for Consumer Protection?
Both Google and Microsoft serve on the executive committee of the Interactive Ad Bureau, a trade association fighting against consumer privacy proposals in Congress and the FTC. The IAB just sent a letter signed by other ad and marketing industry lobbyists opposing Obama and congressional proposals to expand the ability of the FTC to better protect consumers. My CDD just sent emails to officials at both Google and Microsoft asking them to clarify where they stand on the IAB’s letter [see below]. Do our two leading online marketing leaders support financial and regulatory reform, including protecting privacy? Or does the IAB letter–and Google and Microsoft’s own role helping govern that trade lobby group–really reflect their own position against better consumer protection? Not coincidently, the IAB’s PAC has expanded its PAC contribution giving to congress.
Why does the IAB and other ad groups want to scuttle a more capable FTC? Think online financial products, including mortgages, pharmaceutical operated social networks, digital ads targeting teens fueling the youth obesity crisis, ads created by brain research to influence our subconscious minds, a mobile marketing system that targets us because it knows our location, interests and behavior. The IAB is terrified that a responsible consumer protection agency will not only peek under the ‘digital hood,’ as the Obama FTC is currently doing. But actually propose policies and bring cases that rein in irresponsible and harmful business practices. So Microsoft and Google: who are with? Consumers or the special interest advertising lobby?
*****
letter to Google:Â 22 January 2010
Dear Pablo, Jane, Peter and Alan:
As you may know, the Interactive Advertising Bureau recently sent a letter to Congress, along with other ad related groups, opposing the expansion of FTC regulatory authority as proposed in the Consumer Financial Protection Agency bill and related reauthorization [http://www.clickz.com/3636212].
Google serves on the executive committee of the IAB’s board. For the record, does Google support IAB’s stance that, as news reports say, if the FTC is given additional enforcement and penalty-making authority, “the FTC could essentially act as an unelected legislature governing industries and sectors across the economy.”
If Google disagrees with the IAB’s letter, I ask that it make its position public as soon as possible. I also respectfully request Google state its position regarding the Consumer Financial Protection Agency proposal, as well as its position on expanding FTC authority.
Regards,
Jeff Chester
Center for Digital Democracy
www.democraticmedia.org
letter to Microsoft:Â 22 Jan. 2010:
Dear Mike and Frank:
As you may know, the Interactive Advertising Bureau recently sent a letter to Congress, along with other ad related groups, opposing the expansion of FTC regulatory authority as proposed in the Consumer Financial Protection Agency bill and related reauthorization [http://www.clickz.com/3636212].
Microsoft serves on the executive committee of the IAB’s board. For the record, does Microsoft support IAB’s stance that, as news reports say, if the FTC is given additional enforcement and penalty-making authority, “the FTC could essentially act as an unelected legislature governing industries and sectors across the economy.”
If Microsoft disagrees with the IAB’s letter, I ask that it make its position public as soon as possible. I also respectfully request Microsoft state its position regarding the Consumer Financial Protection Agency proposal, as well as its position on expanding FTC authority.
Regards,
Jeff Chester
Center for Digital Democracy
www.democraticmedia.org
Which “Network/Entertainment” Company is Expanding its use of Neuromarketing? NeuroFocus Looks for Specialist to help that showbiz client “Develop actionable insights from neurological studies”
Companies that rely on influencing brain behavior in order to achieve marketing goals are treading on a very slippery regulatory slope. Nielsen-backed NeuroFocus is currently searching for a “Partner” in its “Consulting Practice.” That person will be “responsible for the development and presentation of neurological studies commissioned by our key client in the network/entertainment industry…Of primary focus will be…developing insights from the neurological study results to benefit the client leading to a lasting relationship. Summary of essential job functions:
…
• Develop actionable insights from neurological studies
• Present results of neurological studies directly to clients
• Deep understanding of entertainment industry / network & cable television industry
• Experience in management consulting, market research, and advertising…
NeuroFocus, Inc. is the market leader in bringing neuroscience to the world of advertising, messaging, packaging, and product development. NeuroFocus clients include Fortune 100 companies across consumer package goods, food and beverage, entertainment, financial services, automotive, consumer electronics and retail sectors. NeuroFocus clients also include major companies in the TV and Motion Picture industries.”
CNN uses Neuromarketing to Help Advertisers on its news site
The lead ad in the Dec. 14, 2009 print edition of Brandweek is from CNN.com touting its “more effective ad units.” The trade ad from the “#1 news homepage” says that it tested its ad products using “objective biometric and eye tracking researching.”  CNN engaged the services of neuromarketer Innerscope Research and its co-founder, Harvard professor Dr. Carl Marci. Innerscope just became the first “neuroscience- based biometric company validated by the Advertising Research Foundation’s [ARF] review process.” According to ARF, Innerscope:
 “Addresses all levels of impact and response to media with its capabilities;
• Combines well-developed, biological-psychological concepts and theories with both scientiï¬cally-validated tools and creative approaches to research problems;
• Delivers “superb†scientiï¬c and analytic expertise, with a scientiï¬c approach that supports a consistent, thorough validation program;
• Provides results that are reliable and valid, helping clients to make proper advertising and marketing decisions; and
• Possesses tools and methods that can be used for any communication element, including hard-to-measure areas such as product placement, ads in video games and social media.”Â
Among the proven benefits to advertisers of its interactive ad units (based on this research) says CNN.com in its Brandweek ad are:
“17% increase in thought and processing; 21% higher emotional engagement; 22% better recognition; 31%Â faster recognition; 50% increase in thought and processing; 56% higher emotional engagement.”
Online Financial Marketing, Subprime Loans, Digital Banking & Neuromarketing–Why We Need the Consumer Protection Financial Agency
How we handle our money–including credit, loans and banking–is moving online. Digital marketing of mortgages, credit cards, student loans and other financial products will become the dominant way we relate to banking and related services. The CEO of Capital One has already said that ” [A] mobile phone is just a credit card with an antenna.” So called M-commerce (mobile commerce) will be a crucial avenue where we actually apply for credit on “the fly,” so to speak, with our cell phones themselves used to buy products.  Banks and other financial companies are using Facebook, other social media, online video, Twitter, search engines and interactive online marketing techniques to sell their services to consumers. They are also using digital media in PR campaigns designed to make consumers forget about their unethical behaviors which led to the current fiscal crisis.
Financial services companies are even using so-called neuromarketing–testing messages via fMRIs, for example–to help hone their marketing messages. Neurofocus, a Nielsen backed company that helps create digital and other ads based on brainwave research, released a study earlier this year that “dived deep into test subjects subconscious minds to discover their hidden, unspoken beliefs and feelings about financial institution brands.†They “tested consumers in its laboratory to determine exactly what financial brand messages they responded to best, at the deep subconscious level of their minds, where brand perceptions, brand loyalty, and purchase intent are truly formed.â€Â Financial marketers are also using behavioral targeting online, which stealthily collects data on us for tracking and target marketing. That’s why we keep seeing ads for credit cards and other money-related products. The information gathered as we fill in forms on the Internet can be sold as part of the online lead generation business. Online lead generation played a role in the subprime debacle, as consumers provided marketers with personal information that helped trigger pitches for mortgages and other credit.
Alternet has just published my article on these issues. It can be found here.
Microsoft’s latest Neuromarketing Research for its Xbox LIVE: Tracking “brain activity, breathing rate, head motion heart rate, blink rate and skin temperature”
Microsoft, Google and Yahoo, among many others, are using the latest tools from neuroscience to hone their interactive marketing services. Microsoft released its latest neurmarketing “groundbreaking “study yesterday, which used “neuroscience to compare Xbox LIVE to traditional video…” Here’s an excerpt from the release:
In the study, Microsoft and Initiative, a division of Mediabrands, measured advertising effectiveness across media types and explored how neuroscience technologies can help answer two questions that marketers have asked for years: how to measure audience engagement with their brand and how to measure advertising impact across several media types.
This pilot study, conducted by EmSense, a leading neuroscience company, involved two of Initiative’s clients, Hyundai and Kia Motors, in which test subjects were exposed to various media and advertising campaigns from the companies while wearing a special sensor-laden headset. The headset tracked brain activity, breathing rate, head motion, heart rate, blink rate and skin temperature. Test subjects were also asked to take a post-exposure survey.
The Xbox LIVE campaigns consisted of interactive billboards that users could click through to a branded landing page where they could then interact with content and download videos. The traditional videos used in this study included a 30-second television spot for Hyundai and a 60-second in-theater spot for Kia Motors America.
The results showed more time spent, greater recall and higher levels of emotional and cognitive response in association with the Xbox LIVE ad campaigns than with the traditional video spots. The interactive capabilities of Xbox LIVE enabled an additional 238 seconds of engagement beyond the traditional video ad, which lead to increased unaided recall and brand awareness. For example, the Xbox LIVE ads delivered 90 percent unaided brand recall, compared with 78 percent unaided brand recall rates for the 60-second spot. In addition, the Xbox LIVE ads delivered higher levels of both cognitive and emotional responses.
“We know from our standard performance metrics that our Xbox LIVE campaign is effective,” said Michael Hayes, executive vice president, managing director of Digital, Initiative. “What’s compelling about this research is that we now know that consumers are making an emotional connection with Kia Motors America as well.”
Even more compelling is the methodology that allows brands to compare impact and engagement across multiple measures and across a variety of media types…said Mark Kroese, general manager of the Microsoft Advertising Business Group, Entertainment & Devices Division, Microsoft. “…If we can crack the code on this, marketers and advertisers will be able to pinpoint ROI by media type and know which campaigns are yielding the greatest impact.”