Ad Biz Looks Critically at Google/Yahoo! Pairing

Just some excerpts from today’s coverage, to give policymakers and the public a sense of how the 10 year pact is viewed from inside the ad industry.

First, from Ad Age: “Yahoo is outsourcing search monetization to Google in a 10-year deal, the companies officially announced tonight. But advertisers see less competition and higher prices…But the agreement… doesn’t necessarily protect Yahoo from the possibilities that the deal will erode its search business in the long run or make Google an even more dominant player. When Google search ads are mixed in with Yahoo search ads for a particular search query, Google will almost always win the better placement… And if Google consistently wins, marketers may be less inclined to bother using the Yahoo system, instead choosing to put their optimization efforts toward a single system.”

Yahoo, Google Strike a Deal on Paid Search. Abbey Klaassen. Ad Age. June 12, 2008 [sub required]

Online Media Daily: “…some in the industry have questioned whether Yahoo brass thought about the repercussions of the deal in terms of competition and advertiser perception in the mid- to long-term.

“I think the financial rationale is pretty clear,” said Bryan Wiener, CEO of 360i. “But $450 million is a lot of money, so it can’t just be all tail terms that Google will be serving. I can’t imagine that there won’t be some very valuable commercial terms in that mix.” Wiener said that if advertisers no longer saw the value in buying keywords directly through Yahoo, then fewer companies would end up using (Yahoo’s Search Advertiser Platform) Panama in the long run.

According to Neeraj Kochhar, vice president/director of SMG Search, there are definite concerns among advertisers. “I don’t see this as a positive move in terms of competitive activity,” Kochhar said.”

Final Microsoft Rebuff Sends Yahoo into Google’s Arms. Tameka Kee. Online Media Daily. June 13, 2008 [reg. required]

Stephanie Clifford of the New York Times has a good blog post on advertising industry concerns about the deal.

From the Los Angeles Times, 6/14/08:  “The consolidation of everything under Google is not good,” said Aimee Reker, global director of search at digital agency MRM Worldwide. “It will aggregate so much power and control in one place that it no longer is an open marketplace.”

ATT: DoJ, EC and Congress: Yahoo!’s own claims should raise alarms about a Google or Microsoft deal

No one should sit by and let either Google or Microsoft carve-up or take-over Yahoo! without a serious examination of the competition, privacy, and other consumer protection issues. This week, Yahoo! ran a four-page ad inserted in Advertising Age. Here’s some of Yahoo!’s own copy for regulators and the public to ponder:

“Yahoo! delivers the largest audience in the U.S.-the most 18-34 year olds, the most 35-54 year olds, the most women….Today, Yahoo! reaches over half the world’s Internet users. And with our growing network of premium publishing partners, including over 625 leading newspapers, we’re working with the other half…Our insights and understanding of our users lead to smarter targeting, so we can connect the right audience with the most relevant message–yours…With more ways to connect to your customers more deeply than ever, the future is wide open.”

From Yahoo! Advertising Age insertion. June 2. 2008 entitled: “What Happens When You Can Connect To More Than 550 million People From Over 170 countries Who Spend 2 Billion Hours Each Month In One Place?”

Hey!, AOL Privacy Penguins. Watch how Advertising.Com’s Promotes its “Holy Grail” for Targeted Online Advertising

Advertising.com has a rich media demonstration showing how marketers can discover the “Holy Grail” for effective targeted online advertising. Take a look.

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.”

Time Warner’s Plans for Bebo: Better Targeting, Engagement & Monetization of 13-24 year olds, esp. in EU

Time Warner’s AOL, which now owns Bebo, will be focusing the site to better target the 13-24 year old demographic. Now part of the Platform A online ad system, Bebo will help support AOL’s European plans, enhancing its ability to “engage” youthful users. As reported by paidcontent.org, “Bebo’s engagement marketing will be melded with AOL’s Platform A.” Bebo’s Joanna Shields explained that “[I]n the UK, the 13-24 year olds are watching less and less television… if you’re trying to reach the young demographic, you have to reach them in the language in which they’re interacting with these sites.” Paidcontent noted that Ms. Shields “touted the redesign of AOL to make the various sites more appealing to youth, which has caused an increase in engagement.”

Bebo is at the core of AOL/Platform A’s international expansion plans. By combining Platform A’s data collection and targeting apparatus with Bebo’s appealing content for youth, paidcontent suggested that Time Warner hoped that “…the opportunity to monetize the site may be superior than what it’s been at other social nets.”

Randall Rothenberg of the IAB cries digital wolf

Mr. Rothenberg, head of the trade group that represents interactive marketers, is in a tizzy because privacy, consumer advocates, and some lawmakers in the U.S. and EU advocate public policies that would empower citizens and consumers to have greater control over their data. Groups such as my CDD also want online marketers to inform users about the range and intent of data collection taking place. Anyone who has studied the online ad industry and is following it should be disturbed by many of its developments and directions.

There needs to be a serious and honest debate about all this–and rules enacted to protect the public. As more people realize the dimensions of the interactive marketing system and its implications, there will be a raising protest. We expect that when the EU’s Article 29 Working Party, made up of data privacy commissioners, issues its report on behavioral targeting, it will be an informed and thoughtful discussion of what must be done. Given the henny-penny approach Mr. Rothenberg has embraced to fight off consumer protection safeguards, we assume he will ask Congress to formally break diplomatic relations with `old’ Europe!

This is a serious issue, with ramifications affecting consumer welfare in a number of areas, including information they receive about pharmaceutical products, personal finances (such as mortgages) and with our children and adolescents. As I’ve said, we recognize the vital importance of advertising for the online medium. But it must be transparent, respect privacy, and operate fairly. The global digital ecosystem must evolve, as much as possible, in the most open and democratic manner.

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One more request for those friendly Privacy Penguins–the AOL and Verizon deal, please

Dear Mr. or Ms. Penguin: It appears that Advertising.com’s new deal with Verizon brings behavioral and other data targeting to both its broadband and mobile platforms. Please explain what AOL’s recent acquisition Third Screen Media means with its April 14, 2008 release that says:

“Under the terms of the agreement, Verizon will leverage Platform-A’s sales capabilities for all of Verizon’s online inventory and a majority of Verizon’s mobile inventory. In addition, Platform-A will be the only sales organization that can represent Verizon’s inventory in the marketplace and guarantee placement within the Verizon network. All other sales partners are selling on a blind-network basis.

Verizon will continue to use Platform-A’s mobile ad serving platform, Third Screen Media, to manage the sale of its mobile web advertising. Third Screen Media’s advanced mobile advertising options include geographic, demographic, and content targeting, display, and sponsorship opportunities on Verizon Wireless’ portal, sections and article Web pages. The Verizon ad network is available to brands and agencies wishing to buy advertising on Verizon Wireless Mobile Web pages…”

We await, kind Privacy Penguin, for an answer. Thanks.

PS: Please include any details about the sharing of consumer data from either the broadband or mobile platforms.

The Online Ad industry Must Respect & Protect Adolescent Privacy

Last week, a coalition of child advocacy, health and media groups asked the FTC to develop safeguards for digital marketing that would protect adolescent privacy online. This will be a major focus of the Center for Digital Democracy over the next year or so, building on our work during the 1990’s which led to the passage of the Children’s Online Privacy Protection Act (COPPA). COPPA helps protect the privacy of children under 13 years of age. Adolescents are now a principal focus of the online data collection and targeting system, a process which raises many ethical and health-related issues. We call on responsible online ad industry leaders to work with us to enact meaningful policies that protect adolescent privacy on websites, social networks, online gaming, etc. We are pleased that some major online ad companies have privately said to us that they recognize there is a problem. We will work with them and other responsible digital marketers. Policymakers from both congress and the FTC also recognize adolescent privacy is an important concern. It is a bi-partisan one as well (Senator John McCain was the co-sponsor of COPPA). The time to develop a meaningful framework that respects the autonomy of adolescents, but protects their privacy, is now

Former journalist and now online ad industry lobbyist Randall Rothenberg, in a BusinessWeek commentary, suggests that the call for privacy rules ensuring individuals have control over their data will undermine the Internet. You would think a Madison Ave. trade group could craft more creative PR copy. But the online ad industry’s position is indefensible, since they built a system based on the harvesting of our information without believing they would need to get our permission first. The IAB board should realize it has embarked on a very dangerous campaign here that will undermine credibility for many marketers. Here’s my response submitted to BusinessWeek:
Mr. Rothenberg, as head of the interactive ad trade group lobbying against the call from consumer groups for the government to protect personal privacy online, fails to address the central question regarding online advertising. The call for regulation is designed to ensure individuals control their data while on the Internet or using their mobile phones—not companies such as Google, Microsoft, and AOL. Public interest groups are not opposed to interactive marketing: indeed, we recognize it as a key source of funds for online publishing. But Mr. Rothenberg’s members have created a commercial surveillance system that rivals the NSA—tracking and analyzing our every move while on the Internet, all so we can be encouraged to behave favorably to some marketing message. Responsible ad industry leaders will seriously address the privacy threats created by the interactive marketing apparatus—and not hide behind self-serving claims that unless our privacy is lost, we won’t have a robust digital medium.

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Attention AOL Privacy Penguins: Here’s some copy–written by Time Warner–that you should tell to users

via the Platform-A, Advertising.com multi-page ads in this week’s Ad Age:

Audience insights guide all Platform-A
solutions. Our sophisticated reporting
allows us to discover the behavioral
profile of the consumers who are most
receptive to your message. This
information helps you find target
audiences, understand their demographic,
psychographic and behavioral
characteristics and, ultimately, decide how
you craft and place your brand’s message.
NETWORK REACH
Platform-A reaches nine out of 10 online
consumers.
TARGETING
Platform-A offers a comprehensive suite
of targeting technologies, including:
Demographic
• Age/gender/household income
• Audience affinity
• Cluster solutions
• Rosters/data match
Contextual
• Via content networks and
sponsorships
Geographic
• Data targeting, destination-based
and regional content
Daypart
Behavioral
Vertical
…Our performance
technology continually learns and refines
ad placement across our network based
on observed and expected performance.
Ads are automatically allocated across our
network based on the highest expected
return for the advertiser and publisher.
We also optimize advertising based on
the behavioral interests that resonate
with an advertiser’s key audience.
Leveraging conversion data—anything
from newsletter sign-ups to event
registrations and online purchases—will
increase brand performance and drive
more response with less waste.”