Report on online ad market: "DoubleClick owns the head and Google owns the tail"

A new study conducted in January 2008 by Attributor and Compete shows that [excerpt]:

  • DoubleClick and Google dominate overall market share capturing 35% and 34% of unique users, respectively.
  • DoubleClick owns the head and Google owns the tail. For sites with over 1MM monthly unique users, Doubleclick has a 48% share, a 3x advantage over 2nd place Yahoo. For sites with less than 100k monthly unique users, Google has an 8x share advantage over 2nd place MSN…

The GoogleClick combination is an ad-serving juggernaut.

See this discussion as well from eMarketer on the study. Search Engine Journal also covers it.

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New Article 29 Working Party EU Rules on Search Engines: Protecting Privacy and Freedom

The Article 29 Data Protection Working Party has apparently released [pdf] its “Opinion on data protection issues related to search engines.” It’s a very important decision and governs how search engines collect, process, use, and retain individual consumer information. It expands the discussion on why IP addresses and cookies are to be considered personal information as they relate to search. Search engine companies engaged in business in the EU will have to comply with this directive, which will include Google, Yahoo, MSN, etc.

Among the key findings [excerpts]:

“… search engines collect and process vast amounts of user data, including data gathered by technical means, such as cookies. Data collected can range from the IP address of individual users to extensive histories of past searching behaviour or data provided by users themselves when signing up to use personalised services… It is the opinion of the Working Party that search engines in their role as collectors of user data have so far insufficiently explained the nature and purpose of their operations to the users of their services.”

“…IP information as personal data… These considerations will apply equally to search engine operators.”
“When a cookie contains a unique user ID, this ID is clearly personal data. The use of persistent cookies or similar devices with a unique user ID allows tracking users of a certain computer even when dynamic IP addresses are used11. The behavioural data that is generated through the use of these devices allows focusing even more on the personal characteristics of the individual concerned.”

“Generally, search engine providers fail to provide a comprehensive overview of the different specified, explicit and legitimate purposes for which they process personal data. Firstly, some purposes, such as ‘improvement of the service’ or ‘the offering of personalised advertising’ are too broadly defined to offer an appropriate framework to judge the legitimacy of the purpose. Secondly, because many search engine providers mention many different purposes for the processing, it is not clear to what extent data are reprocessed for another purpose that is incompatible with the purpose for which they were originally collected.”

“Search engine providers that wish to provide personalised advertising in order to increase their revenues, may find a ground for the legitimate processing of some personal data in Article 7 (a) of the Directive (consent) or Article 7 (b) of the Directive (performance of a contract) but it is difficult to find a legitimate ground for this practice for users who have not specifically signed in based on specific information about the purpose of the processing. The Working Party has a clear preference for anonymised data.”

“If personal data are stored, the retention period should be no longer than necessary for the specific purposes of the processing. Therefore, after the end of a search session, personal data could be deleted, and continued storage therefore needs an adequate justification. However, some search engine companies seem to retain data indefinitely, which is prohibited. For each purpose, a limited retention time should be defined. Moreover, the set of personal data to be retained should not be excessive in relation to each purpose.

In practice, the major search engines retain data about their users in personally identifiable form for over a year (precise terms vary). The Working Party welcomes the recent reductions in retention periods of personal data by major search engine providers. However, the fact that leading companies in the field have been able to reduce their retention periods suggests that the previous terms were longer than necessary.

In view of the initial explanations given by search engine providers on the possible purposes for collecting personal data, the Working Party does not see a basis for a retention period beyond 6 months.”

“Persistent cookies containing a unique user ID are personal data and therefore subject to applicable data protection legislation. The responsibility for their processing cannot be reduced to the responsibility of the user for taking or not taking certain precautions in his browser settings. The search engine provider decides if a cookie is stored, what cookie is stored and for what purposes it is used. Finally, expiration dates of cookies set by some search engine providers seem to be excessive. For instance, several companies set cookies that expire after many years. When a cookie is used, an appropriate cookie lifetime should be defined both to allow an improved surfing experience and a limited cookie duration. Especially in view of the default settings of browsers, it is very important that users are fully informed about the use and effect of cookies. This information should be more prominent than simply being part of a search engine’s privacy policy, which may not be immediately apparent.

If there is no legitimate ground for processing, or for use beyond the well-specified legitimate purposes, search engine providers must delete personal data. Instead of deletion, search engines may also anonymise data, but such anonymisation must be completely irreversible for the Data Protection Directive to no longer apply.

Even where an IP address and cookie are replaced by a unique identifier, the correlation of stored search queries may allow individuals to be identified. For this reason, where anonymisation rather than deletion of data is chosen, the methods used should be considered carefully and performed thoroughly. This might involve the removal of parts of the search history to avoid the possibility of indirect identification of the user who performed those searches.

Anonymisation of data should exclude any possibility of individuals to be identified, even by combining anonymised information held by the search engine company with information held by another stakeholder (for instance, an internet service provider). Currently, some search engine providers truncate IPv4 addresses by removing the final octet, thus in effect retaining information about the user’s ISP or subnet, but not directly identifying the individual. The activity could then originate from any of 254 IP addresses. This may not always be enough to guarantee anonymisation.”

“The Working Party finds that the correlation of personal data across services and platforms for authenticated users can only be legitimately done based on consent, after the users have been adequately informed… Finally, some search engine providers explicitly admit in their privacy policy that they enrich data provided by users with data from third parties, other companies that may for
example attach geographical information to ranges of IP addresses or websites carrying advertisements sold by the search engine provider24. This kind of correlation might be unlawful, if the data subjects are not informed at the time of collecting their personal data and if they are not granted an easy way of access to their personal profiles and the right to correct or delete certain elements that are incorrect or superfluous. If the processing in question is not necessary for providing the (search) service, the freely given, informed consent of the user would be required for lawful processing.”

Most internet users are unaware of the large amounts of data that are processed about their search behaviour, and of the purposes they are being used for. If they are not aware of this processing they are unable to make informed decisions about it.”

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Comcast works with Miller Beer, Kraft Foods, Mars, Publicis to expand cable TV ad targeting. Baltimore new location for its micro-targeting–and consumer privacy threatening–trials

Here’s the excerpt from the 4/4/08 Comcast and Starcom (a division of Publicis ad giant) release. See too the role of outside databases in the targeting, including from Experian, Acxiom, List USA and Equifax. We hope Comcast watchers, privacy and consumer advocates, and Maryland state officials, take notice:

“Comcast Cable, and leading media agency network Starcom MediaVest Group (SMG) announced today the expansion of their agreement to test addressable TV advertising with a trial scheduled to launch in the third quarter of 2008 in the Baltimore, MD area. The companies also shared findings of a recently completed groundbreaking trial of addressable advertising technology…

The initial technical trial, which began in December 2006, took place in Huntsville, AL… Comcast has been offering zone-based advertising, but this was the industry’s first significant effort to deliver different ads within the same commercial break to different household groupings, based on demographics and advertiser segments…

“Addressable advertising gets us closer to the power of mass personalization by delivering highly relevant brand messages to engaged consumers, and this is the ideal connection in a world of scarce consumer attention,” said Laura Desmond, CEO-The Americas at Starcom MediaVest Group.

Major marketers active in the trial, all SMG agency clients, included General Motors, Discover Card, Hallmark, Kraft Foods, Mars, Miller Brewing Company and Procter & Gamble. One of the unprecedented capabilities demonstrated in this trial was advertisers were able to segment the market into audiences based on demographic data, and Comcast was able to deliver relevant ads for the advertisers’ products and services to each segment.

Comcast’s data services partner, Experian(R) Marketing Services, assisted Comcast in segmenting the market and matching relevant messages to groupings of households. Addressable advertisements were delivered with the support of OpenTV’s SpotOn(TM) advanced advertising solution, which allows for seamless switching of video ads to aggregated groups of set-top boxes…
The trial revealed that viewers who saw ads directed to households within a particular group were less likely to change channels… The Huntsville market was selected to pave the way for a larger scale deployment in 2008. The next Comcast Cable market slated to receive an expanded trial of addressable advertising is Baltimore, MD using Invidi’s Advatar(TM) technology.”

Comcast, in its release, claims that privacy will be honored. We think that’s a claim that requires to be challenged. Here are excerpts from Invidi, the technology company Comcast is using for this micro-targeting and data collection trial:
” For operators, ADVATAR provides the ability to address every subscriber on an individual basis. Marketing messages can be fine tuned and matched to the diverse interests of viewers and to the rapidly changing marketing needs of operators…
Viewer Present Classifier
Learning the demographic make-up of the household is critical to targeted impressions delivery
Age Classifier
Behavioral cues, viewer patterns and remote control click-stream data create gender IDs that are accurate and reliable
Gender Classifier
Converging industry data and program category information with remote control usage generates superior gender identification
Income Classifier
Cross-tabulating US Census data and zip code+4 information creates dynamic blocks of median household income
Geography Classifier
Periodically published tables correlate unique DSTB IP addresses with zip code + 4 data for dynamically generated targeting zones
Additionally, INVIDI is expanding its classifier set to include a Multicultural Classifier and a Contextual Search Classifier…
With Spot Optimization advertising inventory on the most popular cable programs is expanded by segmenting the audience to enable either a single advertiser to deliver multiple ads or multiple advertisers to advertise to different demographic targets all within a single time-specific break – generating substantial additional revenue by creating more quality targeted inventory to sell…
Geo Targeting
Every advertiser and marketer has the ability to create their own unique geo targeting mapping criteria. ADVATAR’s Geo Targeting used in combination with addressable, demographic and behavioral processes creates a new and powerful television advertising and marketing landscape…

For advertisers, ADVATAR is the ultimate impressions delivery system – making “Prime Time” whenever viewers are watching television. For the first time ever on any television platform media planners can precisely execute their advertising campaign with reach, frequency and separation – guaranteed impressions delivery to true demographic targets.
For media buyers ADVATAR provides unprecedented access, prevue, purchase, verification, real-time campaign management and dynamic reporting of television delivered impressions.”

PS: From Invidi’s December 2007 deal with Nielsen [excerpt. our emphasis]:
“The Nielsen Company and INVIDI Technologies Corporation today announced a multi-year agreement to share data and explore ways to measure personalized television ads targeted at specific viewers. As part of the non-exclusive agreement, Nielsen will provide INVIDI with demographic data that will enable INVIDI to refine and improve its advanced software engine – called Advatarâ„¢ — to track “addressable” advertising. Addressable or “targeted” advertising allows digital television providers to simultaneously deliver different ads to specific groups or even individuals based on their demographics, buying habits or personal preferences.”
PPS:  A video report on Comcast & Invidi (note mention of privacy concerns). via YouTube.


CDD Publishes new report on widgets, third-party apps: "The Facebook Economy"

My CDD commissioned a report from investigative journalist Adam Mayle that examines Facebook and the growing universe of third-party applications. The report, available via here, examines some of the data collection and privacy issues from these Facebook-related services.

Here’s a short excerpt: “But while this platform has benefited many, it raises concerns about user privacy. Because of their deep integration into Facebook, developers have extensive access to user information, but it is often unclear if, when and how they exploit this data. This situation is perpetuated by Facebook’s unwillingness to regulate the widgets that operate on the site. As a result, users often have no idea who is collecting their data, how information is obtained as one interacts with these applications and how such data – even so- called not non-personally identifiable information – is subsequently used. By eschewing liability and placing the burden of responsibility on developers to police their own applications, Facebook unnecessarily exposes its users to cyber-threats like adware, malware and hackers. In many ways, Facebook has created a
dynamic social network, but because of the practices that it has adopted, it needlessly places the privacy and security of its users in harm’s way.”

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Brand Marketing and Social Media

Brand marketers, including movie studios, apparently love those “viral” applications to help drive ticket sales. We will have more to say about this topic soon, including at the FTC. At yesterday’s Social Media Business School “class,” the veterans from the digital ad business (meaning those somewhat over thirty) schooled the mostly in their twenties hungry developers about hitting the big time with the largest brand advertisers. The session I attended focused on the question: “What are Brands looking for in Social Advertising: eyeballs, interactions or engagement.”

I hope brands are also looking for corporate responsibility. There will be many–including my group–which do.

Can Social Media Find a Business Model That Protects Privacy?

It’s clear that many of those trying to monetize third-party applications are pushing the privacy envelope. For example, at yesterday’s “Social Media Business School” event in San Francisco, one panel on “Performance Advertising” discussed “[H]ow to turn clicks and leads and other forms of user response into cash.”

Social media leaders better change the ” P” in the acronym CPA (cost per action) to mean Privacy.

Report from the field–Social Media

In San Francisco, the talk about social media and advertising is all about bringing the power of “virality” to help sell movies, cars and the big brands. There’s an audience of eager, mostly under 30, developers who want to cash in and be part of the ad business.

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Will Al Gore’s Alliance for Climate Protection and its $300m ad budget address the role of advertising and the climate crisis?

We think there’s something ironic about the $300 million ad “We” campaign just launched by Al Gore and several environmental groups to address climate change. We agree that threats to the environment are grave, and require immediate action. But unless Gore’s ads also critique the growing challenge to the environment coming from the advertising industry itself, we doubt whether there will be meaningful change. Marketers are unleashing the most powerful techniques to encourage greater and greater personal consumption. Madison Avenue is expanding the boundaries of what marketing can do by creating what it calls its “Marketing and Media Ecosystem.” From behavioral targeting based on the collection and tracking of our online activities, to “immersive” branded virtual content, to “viral” campaigns using broadband videos, the ad industry has embarked on a full-court press to get the public to eat more junk food, buy more cars, charge more on credit cards and take out new loans, etc.

The campaign, according to press reports, is hoping to encourage “influentials” to press for laws and policies. It’s a noble effort, although is using the same techniques marketers have embraced to target teens and other opinion makers to get friends to buy or like brands and products (called “brand ambassadors” by some). The Gore campaign should include a serious call for the public to be concerned about the consequences from the global and digitally-driven interactive marketing machine. Among the policies it should ask its influentials to support, are safeguards protecting consumer privacy and ensuring that marketing in the digital “ecosystem” is done in a way that truly supports an earth in balance.

PS: Before any of the $300 million is given to buy time via broadcasters, cable companies, ad agencies, and online marketers, the Alliance for Climate Protection should first be required to conduct an environmental impact analysis of how these media each contribute to the climate change threat–and what they should do about it.

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