New York State Assemblyman Richard Brodsky understands that the digital marketing industry–aided and abetted by too many complicit online publishers–have created a system unfair to consumers. Our data is continually harvested as we are monitored online (and soon via cell phones and even TV). Ad servers take our information about the pages we visit, the shopping carts we use or abandon, the search terms we use (think health, mortgages, etc.), the videos we watch or click off–and much more–so we can be profiled, tracked across the Web, targeted, and then confronted with a variety of marketing messages all designed to have us change our behaviors (to like this product or that, feel someway about a brand, engage in a purchase, or a relationship–including giving up even more personal info). Our data becomes the key part of what the online ad industry calls a “Marketing & Media Ecosystem.” But if we don’t have serious privacy and consumer protections, this “ecosystem” will erode our privacy, consumer rights, and help undermine the role of the Internet as a democratic medium of discourse.
The lobbyists at the Interactive Advertising Bureau (whose board includes Google, Microsoft, Yahoo!, the New York Times, Comcast, AT&T, News Corp/Fox) make the spurious claim that Brodsky’s bill (and similar privacy proposals) threaten the Internet–because, they argue, such safeguards would reduce the advertising that supports much of online content. That is absurd. No one is saying there can’t be advertising–we are just saying it needs to be done ethically. The public requires a digital media system that empowers the individual. Let each person decide what kind of data can be collected and how it can be used (after carefully–but concisely– explaining the consequences of micro-targeting). There should be real limits on how long the data can be retained as well.
The real “ecology” for the future of online communications is a healthy balance between commercial and ad supported ventures and a vibrant public sphere. The IAB is relying on tired lobbyist phrasebook warnings about threats to the Internet if advertising has to abide by consumer protection rules. Frankly, we are amazed that the IAB–with its membership representing most of the major online publishers–can’t adopt a more statesperson-like approach.
Mr. Brodsky’s bill needs to be strengthened, so consumers are empowered to decide what data can be collected, via an opt-in system. It must also protect New York residents from the egregious data collection excesses that we have witnessed with the online mortgage and financial sector, and the emerging health information field. So Bravo to Assemblyman Brodsky for his leadership role in helping protect consumers from a digital marketplace that has evolved based on the unfair and deceptive system of interactive data collection.
Statement on the EC Decision on Google/DoubleClick
Jeff Chester, Center for Digital Democracy
By failing to impose safeguards, EC regulators have helped strengthen a growing digital colossus that will now be in a dominant position to shape much of the global future of the Internet and other online media. The EC [DG Comp] appears to have embraced the FTC’s flawed analysis of the online ad market. It represents the failure of antitrust regulators to understand and respond to the growing consolidation of control over online ad delivery, data collection, and the funding of content. This decision will have profound and unfortunate consequences for the Internetâ€™s evolving role as a democratic communications medium.
EU and US antitrust regulators have also perversely set the stage for Microsoft’s goal of acquiring Yahoo!, furthering more concentration of control in the new media sector. Instead of ensuring competition, DG Comp and the FTC have literally paved the way for the emergence of a global digital duopoly over online advertising (which is the principal way online content is funded). By permitting Google to dramatically grow in clout, regulators will have to likely enable the further growth of a # 2 competitor to Googleâ€”which will be Microsoft.
US and European policymakers must reform the antitrust process to reflect the realities of the digital market era, where competition, data collection, and content creation are seamlessly intertwined. In todayâ€™s digital marketplace, the company that controls the most data about consumers and has the global reach to connect to them raises both anticompetitive and privacy concerns. An antiquated and piecemeal antitrust approach fails to protect citizens, consumers, and competition.
The Center for Digital Democracy, which opposed the Google/DoubleClick merger in both the U.S. and in the EC, will continue to press policymakers to play a more responsible forward-thinking approach to competition and consumer protection for online and interactive media.
The IAB has embraced a `circle the data collection and micro-targeting digital wagon’s’ with its new privacy principles. Instead of embracing a policy that truly protects consumer privacy, IAB members are trying to hide behind the same failed approach they have led to governmental inquiries in the US and the EU. The IAB should have adopted rules so that no data can be collected without full disclosure and prior consent of the consumer, as well as other fair information collection principles. The IAB’s proposed new PR campaign to promote the role of interactive marketing will undoubtedly by slick–but won’t be honest. That’s why my CDD will keep telling the FTC, the EU and the public about what really goes on with data collection and digital marketing. These slightly refurbished fox-watching-the-data-hen-house-privacy principles won’t provide any substantive protections for consumers. The failure of the IAB to acknowledge key issues related to sensitive data–including children, teens, financial (think subprime mortgage-related) and health–is a glaring failure of the group’s ability to do what is required to protect consumer privacy.
The IAB is trying to help its members dodge the digital privacy data bullet. But privacy advocates and officials concerned about consumer welfare in the digital age will eventually force the needed changes. What’s sad is that instead of playing a leadership role in the privacy debate, the IAB is attempting to stick with the past. Don’t they realize that change is coming?
So relieved where some in the interactive ad business when they read the FTC’s staff proposed privacy principles released last month that commentators described the reaction as the industry had “dodged a bullet” and “breathed a sigh of relief” [“FTC Online Ad Targeting Guidelines: Industry Breathes A Sigh Of Relief”].
Now Paidcontent describes plans underway by the IAB to offer “privacy standards,” via a “15-member working group,” that includes Time Warner, Microsoft, Yahoo! and others [“Online Ad Industry Groups Take Steps To Self-Police”]. According to the January 4, 2008 article by David Kaplan “[T]he IAB task force will address issues of consumer notice and choice, in terms of deciding the context for selecting opt-in or opt-out.”
IAB lobbyist Mike Zaneis says in the article that “[T]he level of appropriate choice needs to be flexible…consumer regulation will prove to be more efficient and powerful than government regulation.” Zaneis considers the campaign against Facebook that resulted in some modest–and ineffective in my view–changes in its data collection system as an illustration of “consumer regulation.” It’s clear that the IAB is incapable of developing a policy that will protect consumers. Anyone who understands the contemporary dimensions of the interactive marketing industry–and has the public welfare in mind–should recognize what is required. The IAB will not be taken seriously if it can’t deliver the truth (it’s so far failed to protect the public from troubling online lead generation practices, for example. See our November 1, 2007 FTC filing). Yahoo!, Microsoft, Time Warner and others on the committee should lead–and not follow–advice from the IAB that will lead to prolonged political conflict–in Europe, in Congress, at the FTC and FCC, and with the incoming Administration.
Real governmental rules are required–including measures that effectively protect every consumer and also address vulnerable groups and sensitive marketing issues. The IAB’s old school Beltway mentality will likely give online advertisers a bad name. Where are the ad industry’s thoughtful leaders who can help steer the IAB in an honorable direction?
An excerpt from a recent trade piece that should encourage reflection and concern (our emphasis):
“Today, we can not only target by the sites we think our customers frequent, we can follow them around the Web and target them based upon the other sites they actually visit. We can also target them based upon the words typed into a box, and from where those words are typed through search geo-targeting. We can also retarget searchers elsewhere on the Web. Facebook’s recent announcements take targeting to a whole new level, based upon age, location, interests, and other online activity.”
Source: “Search And Online Advertising: A Continual Evolution.” Ellen Siminoff. Search Insider. November 16, 2007
The search engines must review their policies accepting mortgage and financial ads related to consumer credit. Companies such as Interactive Corp.–which own both a search engine and a financial services company (in this case Ask and LendingTree.com)–also must re-examine how they conduct their business promoting mortgages and other credit. Itâ€™s all too easy for search engines to say, we just are selling the ads. But the financial sector, notes clickz, accounts for around 17% of the online ad market. There is a national tragedy here for many Americans, and the online ad industry has to own up to its role. Search engines need to do a better job investigating these companies to make sure they are offering financial services that are fair and not morally usurious. Google, Yahoo, AOL, MSN and major online platformsâ€“especially those that allowed such ads to runâ€“ should also support national legislation aiding those Americans who now find themselves facing eviction. The online ad industry should voluntarily create a bail-out fund as well, returning some of its profits it earned.
Where is the moral leadership in the online ad industry? Which CEO at what search engine, ad industry trade group, or online financial marketer will stand-up and say: we must do better.
PS: It’s worth reading clickz’s Anna Maria Virzi’s piece published today on “What Does the Mortgage Meltdown Mean for Online Advertising?” Especially the last few grafs.
PPS: Here’s a perceptive analysis from Feb. 2007 on the role of Google, Yahoo!, etc and online mortgage ads [excerpt]: “As you are aware, Google (GOOG) and Yahoo (YHOO) have cashed in big time from the mortgage boom. Direct lenders, conventional banks and lead aggregators like Lending Tree, Nextag and LowerMyBills.com have all paid top dollar to drive online traffic to their site. Keywords like “mortgage” and “refinance” have gone for as high as $20 to $30 per click during peak times…Mortgage companies…have all been heavy contributors to Google’s coffers. Yahoo too, but not as much as Google.”