New Threats to Privacy: Interactive Ad Bureau (IAB) Hires D.C. Lobbyist

The interactive ad lobby–that includes most publishers of major newspapers, magazines and online outlets–is worried that consumer advocates might persuade Congress or the FTC to actually do something to protect digital privacy. Groups such as the Interactive Advertising Bureau (IAB) are alarmed that if consumers can actually control their data, the ability of digital marketers to collect, profile, track and target us will be threatened. So the IAB–which has a old and new media who’s who on its board–has brought in some political help. According to Online Media Daily:

AIMING TO INCREASE ITS SWAY over government, the Interactive Advertising Bureau has opened a Washington, D.C. office and hired its first in-house lobbyist, Mike Zaneis…he and lobbyists from the Venable law firm have been talking with Congressional staffers on the IAB’s behalf. “We’ve been educating them on how the Internet works, and what the interactive advertising industry actually is and how it operates,” said Zaneis, who previously served as executive director of technology and e-commerce at the U.S. Chamber of Commerce.”

Presumably, the IAB will be working alongside DC lobbyists for Google, Yahoo!, Time Warner and the like to ensure that our digital media platforms provide a direct connection to Madison Avenue’s data warehouses. But they should be ashamed for creating a business model where direct access to our data across countless online media properties needs to be defended by special interest lobbying tactics.

PS: We just saw the ClickZ story. It’s very telling what the new IAB DC lobbyist said:
“…Zaneis says his initial plan of is, “Putting together a public policy council, developing positions on key issues, and leveraging the contacts that I have on the Hill, and in the FTC and other places. And then it’s a take no prisoners attitude to advocate for our members.”

Newsflash: Yahoo! Now Partnering with AT&T

No sooner than we had written the previous post, we saw this in today’s Advertising Age. At yesterday’s presentation before advertisers, CEO Terry Semel announced that Yahoo! “is working with AT&T domestically on its IPTV program.” Perhaps that helps explain our previous post on a Yahoo! VP dismissing network neutrality concerns.

Semel appeared at what Yahoo! called its “infront,” a online advertising version of the well-known bazaar where television time for the next season is first sold. We think such “infronts” are just another indication of how much of the business model for the new media is based on the dynamics girding television. It will be all about brandwashing on behalf of the largest global advertisers, but propelled by sales of each of us on a “one to one” basis.
Sources: paidcontent.org

“Yahoo Woos TV Media Buyers at its `Infront.” Claire Atkinson and Abbey Klaassen. Advertising Age. Feb. 14, 2007. subscription required.

Example today of NY Times Failure to Disclose IAB Connection

Just a few days after we blogged a piece on the conflicts of interests raised when media outlets uncritically report on interactive marketing–while failing to acknowledge their own official corporate role promoting the field–we have a good example. Today, in a New York Times story about online video marketing, the reporter quotes the head of the Interactive Advertising Bureau (IAB). The story failed to acknowledge that the New York Times Co. is on the IAB board as well as its executive committee. Here is a link to the IAB board. See here for the IAB mission. I believe that media outlets serving on the IAB board have to not only acknowledge their membership when they report on the industry, but also commission a steady series of stories that will look at interactive marketing and their own corporate role with a critical perspective. The Times Co., btw, is also a member of the Advertising Research Foundation.
See: “Forgive Me Viewer, for I Have Confessed in a Banner Ad.” New York Times. Feb. 10, 2007.

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Conflict of Interest: Why NY Times, Wash Post, USAToday, CNN, NBC & More Should Acknowledge Role Promoting Threats to Privacy and other Interactive Marketing Problems

Interactive advertising and marketing are helping shape the transformation of the media, here in the U.S. and everywhere else. A infrastructure is being put in place, without the public’s consent, designed to better sell to us 24/7. It’s using some of the most powerful communications technologies ever created to do so. Among the key issues society should be debating right now include the need for privacy safeguards to protect our personal information online, and what kind of limits should be put in place to check the excesses of interactive marketing (think personalized ads flooding your PC, mobile and TV screens, propelled by a data profile of you created via artificial intelligence technologies, and designed to get you to feel or think in a way positive to the brand).

But critical commentary about interactive advertising is largely missing from the ever-present coverage of the digital marketplace. Each day, major papers run stories in their business section about the latest triumph of technology or company. But too rarely do they examine the negative consequences, let alone the role of their own publisher or media firm. One glaring omission by such major news outlets as the New York Times, the Washington Post, USA Today, etc. is the relationship they have with the Interactive Advertising Bureau (IAB). The IAB is a trade group whose mission is “helping online, Interactive broadcasting, email, wireless and Interactive television media companies increase their revenues.” Among its goals include: “[T]o prove and promote the effectiveness of Interactive advertising to advertisers, agencies, marketers & press;” and “[T]o be the primary advocate for the Interactive marketing and advertising industry.”

On the board of the IAB include officials from the New York Times Company (Martin Nisenholtz, its leading digital exec); Washington Post Newsweek Interactive, Cox Newspapers, USA Today, NBC, CNN, and Disney. They work alongside board members representing Google, AOL, Conde Nast (attention New Yorker magazine!), Verizon, Comcast, Yahoo!, Forbes and others.

There is a clear conflict of interest here when newspapers, television, and online news report on interactive marketing and have a representative helping direct the key group promoting the industry. These news outlets should be disclosing their membership in the IAB and any other industry trade group (which have a political or marketplace mission). Editors at the Times, Post and other papers should commission stories which more effectively analyze the digital marketing industry, including raising the critical issues which the public should debate. They must also prominently disclose their conflict of interest with the IAB as they report on the industry they are working to serve.

How long will the Federal Trade Commission wait before it decides to act to safeguard consumer privacy and protection online? Advocates will likely have to ask Congress to organize an oversight “Tech-ache” to prod the agency into some sort of action. Note this excerpt below as just one example of how the FTC is asleep at the interactive advertising/data collection `digital’ switch.

“Imagine the value to a national automaker of isolating a swath of people so ready to splurge on a fuel-friendly hybrid they’ve price shopped and maybe even placed an eBay bid to buy a Prius. Now, imagine if that auto advertiser could follow those folks around the web — from news sites to social-networking pages — serving up ads that remind them of the benefits of owning a hybrid car. It’s a pretty appealing prospect to marketers, and exactly what they will be able to do if Yahoo gets its way… “We’re actually in a fairly unique position to be able to take advantage … of the enormous data and insight we have on the largest online audience in the world,” Ms. Decker said in Yahoo’s year-end earnings call Jan. 23. “We can see what people are putting in their search strings. We can see what kinds of ads they click on. We can see what kinds of sites they were on prior to the site that they are currently on…”

from: The Right Ads at the Right Time — via Yahoo: Web Giant Looks to Offer Behavioral-targeting Tools Outside Its Own Properties
Abbey Klaassen. Advertising Age. Feb. 5, 2007 [subscription required]

Susan Decker, CFO, bio link.

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Ad Age editorial attacks my "Digital Destiny" book

Trade publications are designed to be part of an industry’s political self-defense system. So it isn’t surprising that Advertising Age has an editorial in its new issue attacking my “Brandwashing” critique. Interestingly, it avoids addressing the many facts I cite in the book, including how advertisers are using brain research, virtual reality, and a marketing is everywhere/all time “360 degree” approach [the 360 term is what the ad industry calls its new strategy]. It’s interesting that the magazine’s editorial writers–probably on behalf of the industry–don’t want the public to ask the serious questions which are raised in the book. Here’s how they rationalize data collection propelled interactive, virtual reality-driven, personalized ads targeting us via PC, mobile, and TV:

“Making marketing more effective is what marketers are paid to do. And as long as they operate within legal and ethical bounds, they should be allowed to. While privacy is a legitimate concern, there’s something to be said for targeted ad messages. What would the average person rather be subjected to, an annoying random pop-up or an ad message tailored specifically for her? (Numerous studies have answered that seemingly obvious question.)

Finally, what consumers and activists seem to forget is that the only reason media content is free or affordable for so many is that major corporations foot the majority of the infrastructure and production bills. Then again, we could turn everything over to the government, which would no doubt create wholesome content at minimal cost to the taxpayer, all the while respecting consumer privacy.”

Have no fear—as we promote the book we will raise all these issues: privacy, manipulation, stealth marketing, immersive applications, brain research, vulnerable consumers. That’s why we are going to the Hill as well!
Source: “Brandwashing? Not Even Close.” Advertising Age. January 15, 2007

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The Brandwashing of America: Micropersuasion in the Digital Era. Adapted from my new book, Digital Destiny

(The following commentary was published by Advertising Age online, Jan. 9, 2007)

‘Digital Destiny’ Author Jeff Chester on How New Media Is Causing the Brandwashing of America

Published: January 09, 2007

We are witnessing the creation of the most powerful media and communications system ever developed. A flood of compelling video images propelled by the interactivity of the internet will be delivered though digital TVs, PCs, cellphones, digital video recorders, iPods, and countless mobile devices. These technologies will surround us, immerse us, always be on, wherever we are — at home, work or play.

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Jeff Chester is the executive director of the Center for Digital Democracy, Washington a nonprofit policy group focusing on digital communications. | ALSO: Comment on this issue in the ‘Your Opinion’ box below.

Related Story:

America Is Being ‘Brandwashed’ Claims Author
Jeff Chester Says Ad Industry Secretly Tracks Consumers

Following our travels
Much of the programming will be personalized, selected by us with the help of increasingly sophisticated, but largely invisible, technologies that will “sense” or “know” our interests, dislikes, and habits. Information about our travels — in cyber and real space — will be collected and stored, most often without our awareness. Our personal data will be the basis of computerized profiles that quickly generate commercial pitches honed to precisely fit our psychology and behavior.

A ubiquitous system of micropersusaion is emerging, where the potent forces of new media are being unleashed to influence our individual behavior. From the ad industry’s initiatives to better perfect measures such as “engagement,” to the MI4 research effort (Measurement Initiative for Advertising, Agencies, Media and Researchers) to harness the power of the unconscious mind, to the rapid evolution of “rich media” virtual applications, a marketing technological “arms race” is underway that will further permeate advertising and marketing in our daily lives.

Wherever we are — online or in the street connected by mobile devices — Americans (and much of the world) will be increasingly influenced by the technologies of digital marketing. Such a system will be greatly aided by the scores of supplemental “real world” marketing efforts, including teams of viral street marketers and brand evangelists (many of whom are not yet old enough to vote!).

Increasing power
The ad industry likes to claim that the public has more control over what advertising they see or whether they like it at all. Many Ad Age readers point to the increasing expansion of the media and argue that advertising is now less powerful. But such assertions are disingenuous. Fueled by global media consolidation, advertisers are now working even more closely with content companies. Product placement has morphed into “program” placement and beyond. Like radio and the early days of broadcast TV, marketing, distribution and content are increasingly seamless. The broadband internet, digital TV and new forms of mobile communications are all being shaped by the forces of marketing. As I argue in my new book, “Digital Destiny: New Media and the Future of Democracy,” advertising is becoming more powerful, not less.

In the book, I chronicle the ad industry’s role in helping shape the early development of the internet, including how groups and companies such as the Advertising Research Foundation (ARF), Procter & Gamble Co., and The New York Times promoted what was once called the “Internet Advertising Ecosystem.” It covers the evolution of the “one-to-one,” “new media” marketing paradigm that still serves as the industry’s basic digital blueprint (further fueled today by sophisticated off- and online data collection, web analytics, interactivity and the branding power of video). The ad industry’s substantial research and political infrastructure — including ARF, Association of National Advertisers, American Association of Advertising Agencies, Interactive Advertising Bureau, its many councils and committees and global groups such as Esomar — are also explained.

From online “behavioral targeting” to interactive ad networks to “virtual hosts” and other “socially intelligent interfaces,” the book attempts to lay bare what marketers plan for the country’s “digital destiny.” Although readers of Ad Age know well what is now underway and its likely impact, the public is largely uninformed. One of my goals is to encourage a meaningful national debate about the current direction of the ad and marketing industry and its impact on society.

Let consumers decide
One of the most serious concerns is about privacy. Most marketers and advertisers are opposed to permitting consumers/users to have real control over their data. They want the default to be the collection of information so we can be precisely targeted. That’s why privacy groups, including my own Center for Digital Democracy (CDD), want Congress to pass legislation requiring a full disclosure of what information is being collected, via what method, and how it is to be used. After examining such details, each consumer would decide on a periodic basis whether to agree to permit the collection of their data (known as “opt-in”).

The current “opt-out” system, where consumers have to proactively seek to place their personal information off-limits, is designed to ensure that most consumers consent by default to data collection. New threats to our privacy from marketers and advertisers have emerged, including behavioral targeting, online retargeting (where consumers are digitally shadowed over ad networks), and the emergence of “intelligent ad engines” placed in cellphones and other mobile devices.

Recently, CDD and the U.S. Public Interest Research Group jointly filed a petition with the Federal Trade Commission asking the agency to declare many of today’s interactive advertising industry practices, including behavioral targeting and virtual advertising, unfair and deceptive. It appears that the FTC is now slowly lifting its head out of the digital sand to seriously investigate the industry based on our complaint. But it will take prodding from the new Congress to get the FTC to act.

Safeguards for new technology
Beyond privacy, interactive-marketing technologies also raise unique concerns about “vulnerable” populations. Unleashing personalized and cyber-virtual marketing to children, teens, prescription-drug users, and the elderly raise important questions related to public health. These groups will need to be protected with new safeguards. But even more is at stake. The entire system of interactive advertising must become more transparent and requires intense public scrutiny, debate, and — where needed — effective public policies.

For example, advertisers are now working to harness the power of our emotions through research on “neuroscience” and “psychophysiology.” As the ARF and AAAA explained in 2005 during Advertising Week, the industry wants to “capture unconscious thought, recognition of symbols and metaphors.”

“Emotional responses can be created even if we have no awareness of the stimuli that caused them,” the ARF and AAAA noted. Such potential manipulation of a consumer’s unconscious will be even more powerful when delivered by virtual agents (such as avatars) that have been fashioned (via data profiling) to dovetail with our desires and interests.

What’s the long-term impact?
I fear that such a powerful psychosocial stealth-marketing machine, backed by the yearly expenditure of many billions of marketing dollars, will drive personal consumption to greater excess. What will be the impact on our environment, such as global warming, as a steady stream of interactive marketing messages are planted deep into our brains wherever we go? Will the digital push to buy and positively associate with brands promote an even more narcissistic human culture? What will be the impact of our personalized communications marketing system on the healthy development of children, families and communities?

The ad and marketing industries have an important role to play in our society, especially helping financially support news, information, and entertainment services. I recognize that advertising will continue to be a very powerful force in our lives. But marketers need to demonstrate greater social responsibility. They must ensure that consumers fully understand and consent to digital techniques; make certain that approaches to target our emotions and other brain behaviors are truly safe (including the impact of virtual reality); and, most importantly, help our media system evolve in a way that strengthens civil society.

Such a goal is not for the U.S. alone, but also involves how the marketing industry serves the public in the developing world. For example, what will be the impact on the world environment as China’s emerging digital infrastructure is bombarded with one-to-one commercial messages promoting automobiles?

The creation of a broadband media system will be viewed by future generations as one of our society’s most significant accomplishments. Will it be seen as one of the highest achievements for a democracy, a place in cyberspace that helped enrich the lives of many and offered new opportunities for an outpouring of cultural and civic expression? Or will it been seen years hence as a new version of what the late scholar Neil Postman aptly described as a medium even more capable of “amusing ourselves to death”? The readers of Ad Age will help determine that answer.

~ ~ ~
This column was adapted from Mr. Chester’s new book “Digital Destiny” (The New Press, 2007).

Time Magazine: You’ve Got Hypocrisy

Time’s person of the year issue named You– and everyone else—as its annual award recipient. Hailing what it called “Citizens of the New Digital Democracy,” the Time Warner flagship publication breathlessly published a series of exuberant articles about how the new media is dramatically changing our country and the world. “You control the Information age” claimed the magazine headline, complete with a mirror-like cover device so you could admire yourself. But the failure of Time to seriously address the key issues raised by Web 2.0 and broadband illustrates the many hurdles to overcome if we are to have any semblance of a digital democracy.

Perhaps the best example of Time’s failure to truly be honest with readers/users was its failure to address the elimination of network neutrality. Time magazine’s parent company is one of the corporate leaders opposed to an open and non-discriminatory Internet. Time Warner is part of the cable industry lobbying apparatus that has eliminated broadband non-discrimination in the U.S. If Time Warner–and its allies Comcast, Verizon and AT&T–have their way, a handful of cable and phone conglomerates will actually determine much of our digital destiny. These old media giants want to extend their monopolies into the digital era, ensuring that their content receives preferential treatment; that broadband becomes a pay as your surf and post toll-road; and that they become powerful barons of the digital domain.

Time magazine should have acknowledged that its parent company is opposed to limits on media consolidation. It wishes to own as much of cable as it can (so it could continue to swallow up cable systems, such as what it and Comcast recently did when they carved up giant Adelphia cable). The magazine should have acknowledged that its parent once before had predicted great things for the U.S. public with new media—when AOL and Time Warner merged in what was then the largest media merger in U.S. history. It should have acknowledged the numerous lies given by Time Warner executives to shareholders, consumers, and policymakers when it claimed to be a sound and public-minded deal.

The cover story should have acknowledged how the new media poses great threats to our privacy, as data is collected about our every move by AOL and many others. It should have discussed how Time Warner’s AOL made public our personal search data, and also turned over records about our searches to the Bush Administration. Instead of mindlessly claiming that to see the future of our media we should look at raw videos on YouTube, it should have said that the public should learn about how Time Warner’s interactive ad subsidiary—Advertising.com—targets us with personalized digital marketing.

As we discuss in our new book—out tomorrow—much of today’s new media “vision” is driven by a desire to create a stronger mechanism for personalized and targeted interactive marketing. Companies such as Time Warner, Google, and Yahoo want to combine the branding power of video with the data collecting and interactive capabilities of the Internet. It will be a digital democracy shaped by Madison Avenue. That was the vision originally developed for our new media future by AOL and Time Warner’s leaders Steve Case and Richard Parsons. Much of Web 2.0 is based on that vision: a system designed to promote the “brandwashing” of America.

Yes, we have endless possibilities with new media, including the Web 2.0 paradigm. But powerful political and economic forces will shape what ultimately develops. If Time Warner has its way, they will hold a key copyright over our digital democracy.

MSN’s Holiday Challenge: Using Sweepstakes to Collect Your Data for Uncle Bill. Not Santa

The new sweepstakes run by Microsoft’s MSN unit–Holiday Challenge [‘Win Up to $50,000]–is emblematic of one of the key ways online marketers collect your personal and related data. Hey, they say. `Wanna win some big bucks?’ Just fill out the form to play. They assume, natch, that you won’t be clued in to the data collection and branding game going on. They don’t make much of the lifeless link which takes you to its privacy “Highlights” page (you have to click again after that if you want to reach the full privacy policy pages). Once enrolled in the game, Microsoft will be able to learn about your behavior online at various MSN pages–all the while you have to endure rich media/search engine pitches for products.

Microsoft, we know, is now seeking to develop a business model for the always-on era. Selling software can no longer cut it as a steady and significant revenue source. But Microsoft should do this in a way that makes it the corporate leader fostering privacy online–as well as supporting content and culture that enriches democracy. Its new sweepstakes ploy reveals a cynical lack of both imagination and commitment to do something better.

Commercial Alert’s Work on Stealth Word-of-Mouth Marketing: Getting the FTC to Wake Up

Congratulations to the group Commercial Alert for pushing the Federal Trade Commission to act, even timidly, on one of the most egregious marketing ploys. “Word-of-mouth” marketing uses people–including kids–to push products to friends and others. Such product pushers receive all kinds of compensation, including feeling they are among an “in-crowd.” That’s what companies actually say to these kids. It was Commercial Alert’s petition that got the FTC to admit greater disclosure is required. Such marketing tactics are part of the emerging “360” degree field of “engagement” that advertisers and brands are building. Wherever we go, online and off, we will be the targets of marketing (including what is known as WOM). But at least now, as as a result of the Commercial Alert work, stealth product pushers better fess up. Perhaps we will even see some changes in how the companies engaged in such sorry practices, especially using kids/teens, operate. If not, these companies will find themselves on the wrong side of branding.
Gary Ruskin and his colleagues deserve our thanks.