Category: network neutrality

Network Advertising Initiative Continues to Protect Online Marketers Interests Instead of Consumer Privacy

The Network Advertising Initiative’s (NAI) real role is to protect the ability of its members (Google, Yahoo!, AOL, etc.) to collect huge amounts of profiling and targeting data from each of us. NAI claims it’s promoting self-regulation on data privacy through its principles and guidelines. But NAI has long been a toothless group, and is basically a public relations vehicle helping to cover the data crime and more-than-misdemeanors of the industry.

So it’s not surprising that last week, the NAI announced that while it supported an “opt-in” for the kind of behavioral targeting planned by the phone and cable companies, it didn’t believe such a safeguard was required for its data-collected membership. In a statement, NAI Executive Director Trevor Hughes said that his group “believes that opt-out continues to be an appropriate choice mechanism for traditional web-based behavioral advertising and this is part of our sliding scale framework.” That’s the political position taken, of course, by his members. They are the biggest behavioral targeters on the planet.

The NAI is a weak group which reflects the cynical view of the online ad industry.  NAI members hope that they can fool policymakers into believing consumer privacy can be safeguarded by the data wolves running the privacy hen house. The battle lines for the next Congress, the FTC and FCC are being drawn. Opt-out is a feckless approach to digital ad privacy. Responsible companies should be in the lead calling for meaningful opt-in. Note to NAI members:  Deregulation and industry self-governance–how shall I put it–doesn’t seem to have worked that well so far!

Interactive Ad Bureau to Congress and Public: If Your Privacy is Protected, The Internet Will Fail Like Wall Street!

It’s too disquieting a time in the U.S. to dismiss what a lobbyist for the Interactive Advertising Bureau said as merely silly. The IAB lobbyist is quoted in today’s Washington Post saying: “If Congress required ‘opt in’ today, Congress would be back in tomorrow writing an Internet bailout bill. Every advertising platform and business model would be put at risk.” [reg. required]

Why is the IAB afraid of honest consumer disclosure and consumer control? If online ad leaders can’t imagine a world where the industry still makes lots of money–while simultaneously respecting consumer privacy–perhaps they should choose another profession (say investment banking!).

Seriously, online ad leaders need to acknowledge that reasonable federal rules are required that safeguard consumers (with meaningful policies especially protecting children and adolescents, as well as adult financial, health, and political data). The industry doesn’t need a bail-out. But its leaders should `opt-in’ to a responsible position for online consumer privacy protection.

Bravo to Free Press, Public Knowledge, other Consumer/Public Interest Groups on Net Neutrality Decision at FCC

Terrific legal, advocacy and organizing work–bolstered by FCC public interest-focused Commissioners Copps and Adelstein–had led to an important decision by the Commission on the Comcast case. These groups deserve praise and support for their critical efforts.

It was almost ten years ago that I came upon a cable industry blueprint which reflected its determination to control how the Internet evolved. Much occurred since then, including important work by the Media Access Project and Consumer Federation of America to keep the pressure on the phone and cable companies. Our plan all along was to put enough pressure on via legal, regulatory and news media that the cable and phone industry couldn’t really implement its plans. Yesterday’s FCC decision marks, in a way, one coda for that effort. But we all know it will need to be ongoing.

One thought. It’s ironic that GOP Chairman Martin played such an important role here. It was, after all, Clinton FCC Chairman William Kennard who refused our call for an “open access” framework for broadband. Mr. Kennard went to work for the Carlyle Group buying media properties. Today he is also a major fundraiser/bundler for Senator Barack Obama’s president campaign. Public Citizen says Kennard has raised more than $500,000.

The Federal Trade Commission at “100”–A Serious Commitment to Protect Consumers is Required

This week, the FTC organized a “public roundtable” that is part of a process it calls “FTC at 100: Into Our Second Century.” Through panels and what it calls “self-assessment,” the FTC under its new chairman Bill Kovaciac has asked such questions as: “How well is the FTC fulfilling the destiny that Congress foresaw for it in 1914? What type of institution should it aspire to be when the Commission’s second century begins in 2014?”

But the two-day panel session illustrates what is wrong with the FTC. It is an agency generally afraid to represent the interests of consumers–think about the mortgage meltdown, skyrocketing oil and gas prices, and the lack of privacy online. The panels consist primarily of commission staff, former officials (who are now, given the FTC’s golden revolving door, primarily representing industry). There is only one consumer advocate (from CDT, which gets corporate funding) and one state AG official. There are a few academics, including those working at corporate-funded thinktanks. Participation by consumer groups and independent academic experts are simply not on the FTC’s agenda.

We have found the FTC to be a generally timid government agency–largely incapable of keeping up–let alone addressing on behalf of consumers–what industry is doing (especially with the areas I cover in digital communications ). There are good people at the agency, but they are tethered to a system that prevents consumer welfare from being truly protected.

A consumer-focused perspective–currently missing from the agency–would have included a serious discussion at this event by consumer advocates and academics who have actually studied and thought about the consumer movement in the U.S. The failure to do so reflects a serious failure by the FTC’s current leadership to ensure a broad and informed debate as it plans for the future.
The next FTC requires a chairperson and new commissioners who sees the agency’s mission working proactively on behalf of the public.

The IAB (US) “mobilizes” to Fight Against Consumer Protections for Online Media

Watch this online video of Randall Rothenberg speaking before a June Federated Media Publishing event. In Mr. Rothenberg’s worldview, demon critics of advertising (such as myself) are deliberately trying to undermine democratic digital media. This would be absurd, if it wasn’t so sad. Mr. Rothenberg is using scare tactics to whip up his members into a frenzy-all so they can fight off laws and regulations designed to provide consumers real control over their data and information. Luckily, Mr. Rothenberg will be on the losing side of this battle to protect consumers in the digital era. Regulators on both sides of the Atlantic understand how the digital marketing ecosystem raises serious concerns about privacy and consumer welfare. We have to say we are disappointed in John Battelle, the CEO of Federated (who wrote a very good book entitled The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture). Mr. Battelle should know that the online marketing system requires a series of safeguards which protects citizens and consumers. There is a balance to be struck here. Online advertisers have unleashed some of the most powerful tools designed to track, analyze, and target individuals–whether on social networks, or watching broadband video, or using mobile devices. We have never said there shouldn’t be advertising. We understand the important role it must play, including for the underwriting of online content. But the online ad system should not be designed and controlled solely by ad networks, online publishers, trade groups and online ad lobbying groups. It must be structured in a way which promotes as much freedom for individuals.

IAB’s Lobbying Against Privacy Safeguards: Trade Group Will Add New Members to Help Fight Consumer Protection Legislation

The trade lobbying group Interactive Advertising Bureau (IAB) plans to add new members to help it generate “grassroots support against proposed legislation in New York and Connecticut that would ban the collection of data about online consumers without a person’s specific consent.” According to ClickZ, the IAB will create a new low-dues membership structure which will enable smaller online advertisers to swell its ranks. What is IAB’s pitch to its prospective members about privacy safeguards offered by state legislators in New York and Connecticut? ClickZ says that “[T]he IAB contends that the proposed measures would have a disproportionate negative impact on small publishers that rely on ad networks to manage advertising sales.”

The IAB’s leadership is off on a irresponsible mission to persuade online marketers and the public that privacy rules would “kill the web.” Such an self-serving view of why privacy rules are required in the age of online marketing will only further diminish the credibility of the IAB.

Charter Cable to Spy on its Broadband Users to Serve Targeted Ads via NebuAd

We have long pointed out that deep-packed inspection can be used by ISPs to both eavesdrop on users and undermine the neutrality of the Internet. Via Wired and other sources we learn that “Charter Communications, one of the nation’s largest ISPs, plans to begin eavesdropping on the web surfing of its customers, in order to help web advertisers deliver targeted ads. In letters being sent to some of its 2.7 million high-speed internet customers, Charter is billing its new web tracking program as an “enhancement” for customers’ web surfing experience. The letters were first reported by a BroadbandReports.com user on Sunday. The pilot program is set to begin next month.”Charter, using language straight out of Orwell’s 1984, claims it’s offering an “enhanced” service. Demonstrating its monopoly clout, Charter is imposing this service on an opt-out basis. Charter will be using, notes Wired, NebuAd. Here’s what NebuAd says it does (our emphasis): “NebuAd delivers the most actionable consumer intelligence by extending its reach dynamically to encompass the ever-growing network of sites that consumers visit. NebuAd combines this web-wide view of pages navigated, searches performed, ads clicked, etc., with the industry’s most accurate targeting capabilities, matching consumer interests across more than 1,000 categories…The result is behavioral advertising on a vast scale with a level of relevance that drives significantly improved response and engagement rates across all categories of advertisements.”

Here’s what NebuAd told Behavioral Insider magazine last November (excerpt, our emphasis): “The kind of data we do aggregate includes Web search terms, page views, page and ad clicks, time spent on specific sites, zip code, browser info and connection speed…within this vast universe of information we create a map of interest categories, beginning with the widest definitions, auto, finance, education, what have you. But within those we can provide far greater granularity. So if you’re talking about auto, we can drill down into particular interest segments, say SUVs, luxury cars, minivans, and then even to particular brands or models. Within the interest category of travel, we can identify consumers interested in learning about Martinique, the south of France or Las Vegas.”…“ISPs have been a neglected aspect of online’s evolution over the past several years. But the fact is the depth of aggregated data they have to offer, anonymous data, is an untapped source of incredible power… The conventional approach to behavioral targeting has been to place cookies on specific Web sites or pages. We’ve gone about it in a very different way. We place an appliance in the ISP itself. Therefore we’re able to get a 360-degree, multidimensional view over a long period of time of all the pages users visit. So what we’re really talking about for the first time is a truly user-focused, though still anonymous, targeting, taking the totality of anonymous behaviors rather than just a subset of sites on a network.” Here’s what NebuAd said in a November 2007 release: “NebuAd’s rich insight into consumer interests surpasses any other behavioral targeting solution and enables NebuAd to deliver precisely targeted ads that drive substantially increased value per impression…NebuAd’s deep insight into anonymous consumer commercial interests across the Internet, combined with its ability to micro-target the most relevant ad placements, brings a new level of value for advertisers, publishers and ISPs:..ISPs, who have up to now facilitated but barely participated in online advertising opportunities, can open new revenue streams that complement advertiser and publisher objectives to maximize revenue and generate higher revenue-per-subscriber.”

Both the FTC and FCC must investigate Charter’s plan (and other ISP’s permit snopping schemes. Congress needs to hold oversight hearings as well). ISPs should not be in the business of letting online marketers have access to the rich informational personal data streams of their customers. Broadband providers such as Charter get paid handsomely already by their subscribers for connectivity (and also benefit from their monopoly status to secure lucrative `bundle’ packages from consumers). Charter, which has a checkered financial history, should not be allowed to weaken the privacy rights of U.S. consumers. Paul Allen, Charter’s chairman and the co-founder of Microsoft, should do better than this.

Opposition to Google/Yahoo! (or other mergers) Should be Based on Principle: Digital Pawns in Play?

Yesterday, we were contacted by a reporter asking our position on the possible Google/Yahoo! search advertising deal (we are opposed to such an arrangement, on both competition and privacy grounds). When we read the story online, we learned that one of the groups sending a letter to the DoJ was the Black Leadership Forum. That raised our concern, since we know that the Black Leadership Forum has had relationships with phone and cable companies. It has also, in the past at least, worked with Issue Dynamics (a company which helps phone, cable and other interests “organize” support from not-for-profit groups. I cite Issue Dynamic’s role with the Black Leadership Forum on page 75 of my book.).

We have not read the letter to the DoJ. Nor do we know of any financial or other relationship between the Forum and any of the many interests who are fighting Google (phone and cable companies, for example, are opposed to Google’s positions on network neutrality). But we believe that all financial relationships, even from the recent past, need to be identified. I know this is Washington, where too many people “lease out,” as we say around my office. But there are important issues at stake with the new media marketplace. Reporters will need to do more to identify whether there are financial and other relationships with groups from Google, Microsoft, phone and cable, etc. But the real focus should be to examine the state of competition in the online ad market–and what it means for the future of communications in the digital democratic era.

IAB’s Response to Calls for Consumer Privacy Rules: Hire More Lobbyists to Protect the “Wild West” of Data Collection & Ad Targeting

Granted, the IAB’s Washington, D.C. lobbying shop, opened last year, is a small operation. Now the IAB is in the process of hiring a second person for the office. No doubt IAB wants to protect the data collection and micro-targeting digital turf of its members. Former Tacoda and Time Warner exec. Dave Morgan perhaps revealed why the political stakes are so high for IAB members such as Google, AT&T, Comcast, Time Warner, Disney, CBS, NY Times, Washington Post, etc. in Media Post. As Morgan explained, “.. Everybody now knows that data is the fuel for growth. Everyone is starting to mine it and make it available to third parties…The big four (Google, Microsoft, Yahoo and AOL’s Platform A) are all opening up their networks and systems to leverage third-party data; so are the ad servers like WPP’s 24/7 Real Media; and so are the ad networks…We’re moving into a wild, wild west in monetizing real-time marketing data, and we’re going to need many more people that know how to do this…As we see this data take on more value and play a bigger role in our industry, the public policy implications are going to become much more pronounced.”

U Penn Prof. Joseph Turow responds to the

Randall Rothenberg of the Interactive Advertising Bureau lobbying group wrote a commentary where he made a number of misleading statements. He incorrectly characterized the work of Professor Joseph Turow. Prof. Turow, a leading academic expert of the online marketing industry, is on the faculty of the Annenberg School for Communication, University of Pennsylvania. Here is Professor Turow’s response:

“In one sentence, Mr Rothenberg manages to make two fundamental misrepresentations. What I really say on page 2 of my 2006 book Niche Envy (where the quote originates) explicitly relates to marketers use of surveillance technologies without consumers understanding: “Over the long haul, however, this intersection of large selling organizations and new surveillance technologies seems sure to encourage a particularly corrosive form of personal and social tension.” Nor do I anywhere lament the passage of the three network universe. For example, I explicitly state in Breaking Up (on page 199, for example) that three network era had its own forms of social exclusions and state that “that “the proper response to this hypersegmentation of America is not to urge a return to the mass-market world of the 1960s and 1970s.” My conclusion: when I see Mr Rothenberg quote someone I will be sure to check the source to make sure the passage has not been wrenched from its context. I should add, too, that I accept the need that digital interactive media have for target marketing and database marketing. But there are many creative ways to meld data analytics and their implementation with openness and public engagement. I fear that Mr Rothenberg”s policies and writings indicate he will lead this important organization in directions that are misguided for marketers and for society.

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