Jeff Chester Reports on Digital Media and the Public Interest
Excerpt from: Editorial: The Internet Revolution
“…Beyond all this is a basic truth—online marketing and advertising have moved from the periphery to the core of creating brand demand. It is also now at the core of the research industry and at the core of how business gets done today.â€
Joseph T. Plummer. Journal of Advertising Research. June 2007
Does the Bancroft family really want the Journal to be part of the show-biz style media business? That’s what will happen to the fine editorial staff at WSJ and the news service once the Bancrofts’ take Mr. Murdoch’s $5 B (okay, if they take GE/NBC’s and Microsoft’s money almost the same thing will happen. But at least Fox News won’t be the editorial model). Here’s a chilling excerpt about Mr. Murdoch and News Corp.’s digital data-mining and targeting operation over at MySpace and Fox Interactive (via Forbes):
“Soon MySpace’s ad salesmen will use software that sifts through its members’ profile pages and sorts them based on the often piercingly personal information they pin up on their pages. Then they’ll compile ‘buckets’ of its members and offer them up to advertisers. Looking for married men who live in the U.S. and own dogs? Single women with college degrees who drive pickup trucks? For a fee, MySpace will deliver you directly to their cyber doorstep.”
imediaconnection says “[C]onsider what this means. If Murdoch’s vision for the digital ad world of tomorrow can be reconciled with his power plays of today, he can revolutionize the way marketers approach me when I sit down to watch the next Super Bowl… think how much Anheuser-Busch might pay Murdoch to know that I prefer an import like Tiger beer (another of their fine brews). Now, imagine a media buy where Murdoch can serve up everything the beer-maker wants to know about me and the rest of the people on MySpace while we all tune in to watch the big game. I’ll get the Tiger ad, my neighbor will get the Bud ad, Anheuser-Busch will get a huge ROI, and Murdoch will make money every step of the way. “
Murdoch’s News Corp. will eventually have the Fox Interactive model shape its entire editorial landscape. Such a system will see the Journal’s vaunted news operation reduced to being considered sticky content for online marketers. Surely, the Bancroft family can broker a deal that truly preserves editorial integrity for this key news resource.
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excerpt: “Google expanded its Washington staff to 13, including five lobbyists, and then scored a victory this week with the hiring of its sixth: Johanna Shelton, senior counsel for telecommunications and the Internet to Representative John Dingell. Dingell, a Michigan Democrat, is chairman of the House Energy and Commerce Committee, which oversees media, telephone and Internet issues….The company last week retained outside lobbyist Makan Delrahim, former deputy assistant attorney general in the Justice Department’s antitrust division, to help win approval. Former Republican Senators Dan Coats and Connie Mack, both partners in the Washington law firm King & Spaulding, began lobbying for Google last year, as did the mostly Democratic Podesta Group. Google staffers include Republican lobbyist Jamie Brown, a former Bush aide whose job included lobbying senators on the confirmations of Supreme Court Justices John G. Roberts and Samuel Alito; and Democrat Robert Boorstin, a former speechwriter for Clinton on national security issues.”
via Bloomberg news
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As we consider the various data sets Google now has, in the light of its expansion via the Doubleclick acquisition, it’s useful to reflect on a statement from its May 10, 2007 10 Q filing. The key excerpt, in our opinion, is its discussion on “privacy concerns” and its business (my bold): “In addition, as nearly all of our products and services are web based, the amount of data we store for our users on our servers (including personal information) has been increasing.”
As increasingly with Google, more is unsaid about what the real issues are than stated candidly. Here’s the complete section from the SEC filing regarding privacy: “Privacy concerns relating to our technology could damage our reputation and deter current and potential users from using our products and services.
From time to time, concerns have been expressed about whether our products and services compromise the privacy of users and others. Concerns about our practices with regard to the collection, use, disclosure or security of personal information or other privacy-related matters, even if unfounded, could damage our reputation and operating results. While we strive to comply with all applicable data protection laws and regulations, as well as our own posted privacy policies, any failure or perceived failure to comply may result in proceedings or actions against us by government entities or others, which could potentially have an adverse affect on our business.
In addition, as nearly all of our products and services are web based, the amount of data we store for our users on our servers (including personal information) has been increasing. Any systems failure or compromise of our security that results in the release of our users’ data could seriously limit the adoption of our products and services as well as harm our reputation and brand and, therefore, our business. We may also need to expend significant resources to protect against security breaches. The risk that these types of events could seriously harm our business is likely to increase as we expand the number of web based products and services we offer as well as increase the number of countries where we operate.
A large number of legislative proposals pending before the United States Congress, various state legislative bodies and foreign governments concern data protection. In addition, the interpretation and application of data protection laws in Europe and elsewhere are still uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data practices, which could have a material effect on our business. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. ”
GOOGLE INC. (GOOG) 10-Q/A filed 5/10/2007
One of the features Microsoft is acquiring in its aQuantive purchase is Drive PM. They plan to use DrivePM to add targeting functionality to its ad network business. This will further the role that behavioral targeting plays with Microsoft and others. Here’s an excerpt from its website:
“For any online targeting service to be “worth its salt,†it must be able to target on multiple relevant variables. DRIVE has gathered an impressive list of targeting variables to which it is continually adding, which include:
Cheers to Moveon.org for challenging the privatized non-public world of MySpace and so much of the commercially branded and shaped social network environment. As the WSJ’s Amy Schatz reported last Friday, “MoveOn.org launched a campaign against social networking sites, trying to pressure MySpace, Facebook and other social networking sites to abide by a “bill of rights†for users that would lift some restrictions on how they can use the site. If candidates want to use social networking sites as virtual town halls, then new rules need to apply, Eli Pariser, MoveOn’s executive director said at the annual Personal Democracy Forum conference in New York this afternoon. “If this is a democratic platform it should be democratic”…
Please see Moveon’s page on its campaign. This is a crucial battle. Will the key online communities be primarily commercial fronts (serving the needs of major brand advertisers)? Or will they place public concerns first? We believe that since these online sites are primarily about marketing and advertising, they will fiercely resist becoming vehicles for serious political and social transformation. Over the next few weeks, we will be writing on this and related themes for our future of the Internet and the public interest project.
I co-authored a report released yesterday. For those concerned about the obesity crisis, it’s a useful resource. It also offers a good overview about the forces shaping the global media system. It’s available here.
We think poor Paddy Chayefsky is continually rolling in his grave, as his prophetic vision of television—Network—increasingly appears as a tame apparition. Sybil the Soothsayer must have a serious headache after she learns that TV producer Mark Burnett (Survivor) has created a new “reality†program pegged to the upcoming Presidential election.
With Murdoch’s MySpace.com as a partner, the show called Independent will feature $1 million in prize money (which can go to “legitimate†candidates or other causes). According to USA Today, “Potential candidates will audition for the show by submitting a video. Once the contestants are chosen, they will set up MySpace profiles to serve as their campaign headquarters.†Burnett and Murdoch hope that the show “will engage younger voters in the political process.â€
But what will MySpace and Fox do with all the user data it receives from viewers and users of its Independent site. Isn’t the show just another attempt at getting young people to stick their interests, bookmarks, and other personal information into the MySpace data mining operation? We think so. Besides, the campaign for president should be serious business. Murdoch, Burnett, and Fox should be spending their considerable wealth encouraging people to understand the myriad of issues besetting the nation. But, since our politics is fashioned so much like show business, the new Independent show (which doesn’t have a TV partner yet) is likely to be the first of many spin-offs. Hey, Bud.TV. Perhaps our current President can be on your Replaced by a Chimp show?
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Today’s column by Washington Post reporter Jeffrey Birnbaum focusing on the sale of products and services at Congressional Internet Caucus events [“Soliciting for Good Citizens” reg. required] underscores why it’s time for the bi-partisan group to restructure its relationship with the Internet Education Foundation’s Advisory Committee.
This Congress is supposed to be breaking the ties between the powerful lobbying infrastructure and its political deliberations. Permitting the most powerful corporate media and telecom special interests to, in essence, determine the Caucus agenda is inappropriate (to say the least!). No group funded by the telecom and media industry should play a role as well in shaping the Caucus agenda. We hope the Net Caucus will clean house. Will Caucus co-chairs Senator Pat Leahy, Rep. Rick Boucher, and Rep. Robert Goodlatte do the right thing?
Shouldn’t Antitrust alarm bells be ringing about the new online video service being launched by NBC/Universal, News Corp./Fox, and Time Warner/AOL/Advertising.com? We think so. Time Warner’s interactive ad delivery subsidiary–Advertising.com–is handling “all the advertising for the new joint venture video service. It will provide display and video ad management and fulfillment for the new video site and for the dedicated video player embedded on that site as well as across its distribution partners,” noted paidcontent.org. The NewCo service will be, says Peter Chernin, News Corp pres. …”the largest advertising platform on Earth.” Adding to what should be serious scrutiny are the deals involving such content partners as Microsoft.
An alliance between NBC, Fox and Time Warner. Do the sleeping watchdogs at the FTC–or for that matter, the Democratically-controlled Congress–ever wake up? Or are they too busy dreaming about their next job in show biz? It’s time to get serious about both the structure and role of the online advertising business, especially as it fully embraces video distribution.
PS: Here’s a little something to help the FTC folks along: “Sales of the venture’s advertising inventory, adjacent to thousands of hours of video programming and spread across a network of distribution partners, will be shared between the new alliance and its media partners.” Oh, and since Google also owns 5% of Time Warner’s AOL unit and is a partner with Fox/News Corp. for MySpace/Fox Interactive for ad sales, we think such an investigation would be very interesting!