Category: media industry lobbying

Harvard’s Berkman Center, its online marketing industry connections, and the need to prominently disclose

The Berkman Center is well-known for its work on digital media issues.  But it has often failed to address–in its research and public work–the negative consequences of online marketing and interactive advertising.  Berkman is partially funded by leading online marketers–including Google and Microsoft.  When Berkman conducts research on such issues as children’s online marketing and privacy [an issue I am involved with], it should always prominently disclose on the first publication page its funding conflicts–including whether Berkman staff work with online marketers.  Berkman should tell Congress and the FTC about such conflicts when it submits research and testimony.

For example, Berkman’s faculty co-director John Palfrey works for a venture investing firm that financially backs behavioral targeting and other online marketing companies.  Professor Palfrey does disclose on his blog that in addition to his Harvard duties, he is also a “Venture Executive” at Highland Capital Partners.  Highland’s “Internet and Digital Team,” which Prof. Palfrey serves on, has one current investment in Affine Systems, a video targeting company. Affine’s Video Platform explains it enables marketers to engage in behavioral targeting:  “Affine integrates behavioral data from exchanges and exclusive third-party partnerships. This data is used to audit and optimize campaigns as they run. Detailed analytics are collected, and valuable retargeting data is generated with every campaign.”  [“What makes the Video Targeting Platform special is the amount of insight it provides…by taking advantage of the data provided by Affine’s data partners, you can even target specific demographic or psychographic groups, and reduce the waste that is currently expected from online video buys.”].  Highland also invests in search engine and interactive TV companies serving the China market and many others. [Given the investments in China’s online market by Mr. Palfrey’s company, it also raises questions about Berkman’s Global Network Initiative role evaluating how companies like Google and Yahoo operating in China and elsewhere address human rights].  Previous online marketing (and behavioral targeted related) investments made by Highland included the youth online targeting company Bolt, Coremetrics, and mobile ad targeting company Quattro.

The well-known online analyst and commentator Dana Boyd is a Fellow at Berkman, and has made it clear she also works for Microsoft Research.  But given Microsoft Advertising global efforts to extend the power of online marketing and personalized data collection, including its online ad research lab in Beijing, its support for neuromarketing in digital ads, and its extensive behavioral and online targeting apparatus–including for junk food targeting youth in its gaming divisions, we hope Ms. Boyd will more closely examine her employers work in the area.

Online Ad Lobby and Chamber Celebrate Victory over Consumer Protection & FTC

Yesterday, the online ad lobby [IAB, ANA, DMA]–working with Chamber of Commerce–scored a major political victory by forcing the Financial reform bill conference committee to drop proposed provisions that would have strengthened the FTC.  Under the House bill, the FTC would have been given the same kind of regulatory authority most federal agencies have [APA rulemaking].  Marketers and advertisers are celebrating their win, because it keeps the FTC on a weakened and short political leash.  While consumer protection is significantly expanded because of the CFPB and new financial rules, the FTC is to remain largely hamstrung.  The online marketing and advertising lobby [including ANA, DMA–see below] were afraid that the newly invigorated FTC under Pres. Obama would require the industry to protect privacy online and also become more accountable to consumers engaged in e-commerce.   I heard IAB and Chamber are dancing in the streets! Congressmen Barney Frank, Henry Waxman and Sen. Rockefeller deserve praise for working hard to protect consumers, including their proposal on the FTC.

Here’s what two of the ad groups placed on their sites about the FTC issue:

Progress on FTC Enforcement Provisions in Wall Street Reform Conference

June 23, 2010

The marketing and media community has made substantial progress on defeating the broad expansion of FTC powers that is included in the House version of the Wall Street reform bill.  But we still need your assistance to keep these provisions out of the final bill.

Yesterday the Senate conferees presented an offer on the bill that rejected the new FTC powers that are in the House version.  Chairman Dodd indicated that while he may support changes in the Magnuson Moss rulemaking process, there is no Senate provision and these issues are too complex and important to be resolved in the context of the Wall Street reform bill.  Conferees hope to finish the conference this week so the final bill can be cleared for the President’s signature next month.

The House conferees may still continue to push for these provisions, so it is very important that marketers contact the Senate conferees to express our appreciation for their support and to urge them to remain strongly opposed to these new powers for the FTC in this bill.  Contact information for the Senate conferees is located here and our letter to Senate conferees is available here.  Please let the Senators know if you have plants or operations in their states.

ANA took part in a very important meeting yesterday with Senate Commerce Committee Chairman Jay Rockefeller on these issues.  We argued that these issues are very important to the entire marketing community and deserve careful consideration outside of the context of the Wall Street reform bill.  The Chairman strongly indicated that he will continue to push for changes in the Magnuson Moss rulemaking procedures this year.

If you have any questions about this matter, please contact Dan Jaffe (djaffe@ana.net) or Keith Scarborough (kscarborough@ana.net) in ANA’s Washington, DC office at (202) 296-1883.

http://www.ana.net/advocacy/content/2418

DMA Asks Financial Reform Conferees to Keep FTC Expansion Out of ‘Restoring American Financial Stability Act’

June 10, 2010 — The Direct Marketing Association (DMA) today was joined by 47 other trade associations and business coalitions in sending a letter to each of the conferees on H.R. 4173, the “Restoring American Financial Stability Act” (RAFSA), urging them to keep language that would dramatically expand the powers of the Federal Trade Commission (FTC) out of the final bill.

As the House and Senate conferees work to reconcile their versions of the financial regulatory legislation, the associations — which represent hundreds of thousands of US companies from a wide array of industry segments — expressed strong opposition to provisions in the House version of the bill that would expand the FTC’s rulemaking and enforcement authority over virtually every sector of the American economy.

“The balance struck in the Senate bill is the right one,” said Linda Woolley, DMA’s executive vice president, government affairs.  “That bill makes the most sense in the context of financial reform legislation, maintaining the FTC’s existing jurisdiction without expanding its rulemaking and enforcement authority over industries and sectors that had nothing to do with the financial crisis.  Issues of FTC expansion deserve their own due consideration and debate in the more appropriate context of an FTC reauthorization, as has been done in the past.”

DMA and the other associations strongly believe that granting the FTC broad new authority is not a necessary or relevant response to the causes of the recent recession and, therefore, asked the conferees to oppose the inclusion of any provisions that would expand FTC authority, rather than making changes to the Commission that would have a fundamental impact on the entire business community and the broader American economy.

For more information please visit www.dmaaction.org.
http://www.the-dma.org/cgi/dispannouncements?article=1449

Google to Host Online Ad Lobby as it Campaigns Against Privacy bill

Google is going to help the interactive ad lobby in its campaign to undermine privacy legislation.  The Interactive Advertising Bureau (IAB) plans a DC lobbying blitz on June 14-15, bringing in its cadre of small publishers.   As the IAB explains, “our day of advocacy gets underway as you divide up into teams for individual meetings with members of Congress and their staffs. Each team will be assigned a “chaperone” to help you make your way around the Hill, as well as answer any questions you might have.”

The message the IAB reps will make will undoubtedly be that the Internet way of life as we know it will end if Rep. Boucher’s proposal–or most any other bill protecting privacy–is enacted.  Sort of the Internet meets the film 2012:  all that will be left, if the data stops flowing for targeting, will be a handful of digital survivors.  Google, which serves on the executive committee of the IAB board [along with Microsoft, NBCU, Disney, CBS], plays a key role in the lobbying plans.  The small publisher/lobbyists are to be “guests of honor at a special networking reception and dinner at the Google offices in Washington, D.C.”  Presumably, at the “Cocktail Reception & Dinner – Courtesy of Google,” the troops will be rallied to the `defeat the privacy bill’ cause.  A guest speaker at Google HQ for the event is the IAB CEO Randall Rothenberg.

I know Google uses its facilities to host many meetings;  I have had lunch there and a dinner once at events where Google was discussing its data collection practices.  But Google claims to want to see meaningful national privacy legislation.  Yet they are aiding and abetting the anti-online privacy lobby (which is also leading the effort to undermine the FTC’s role in consumer protection).  The irony here is that Google appears to have successfully convinced Mr. Boucher that its ad preference manager system should be the basis for a safe harbor in the bill.  But Google likely wants to facilitate weakening even Mr. Boucher’s proposal–hence the dinner, drinks and cheer leading that will no doubt be heard across to Capital Hill next month.

Interactive Ad lobby Gives $ to Lawmakers to head-off consumer privacy safeguards….The Google connection

The ever intrepid reporter Kate Kaye from Clickz has reported the following [excerpt]:

The Interactive Advertising Bureau is putting its PAC money where its mouth is – again. As part of its ongoing efforts to influence key lawmakers, the lobbying arm of the online ad industry’s largest membership organization gave Congressman John Dingell, an influential member of the House Energy and Commerce Committee, $1,000 last month. Among the messages the IAB hopes to get across to legislators: behavioral targeting is so pervasive, even their own election campaigns probably use it….

Other recent fundraising events for the congressman include an annual pheasant shoot held in Boonsboro, MD.

“It doesn’t hurt that Google also has a major office in his congressional district,” added Zaneis. Dingell represents Michigan’s 15th district, home to Google’s Ann Arbor office, which coincidentally houses Google’s political ad sales team…The IAB PAC contributed to Boucher’s reelection campaign in 2009, and to other House Internet Subcommittee members including Mike Rogers and John Shimkus.

IAB Lobby Gives to Lawmaker to Influence Behavioral Ad Policy.  Kate Kaye, ClickZ, Apr 22, 2010

Online Advertisers Side with Kids Junk Food Marketers: Opposing Consumer Protection by FTC, Even to Address Childhood Obesity Epidemic

The Interactive Ad Bureau [whose board members include Google, Fox, NBC, Comcast] is working with the marketing and data collection lobby to oppose proposed Obama Administration legislation that would enable the FTC to protect consumers.  It’s clear from the comments below in Reuters, that the IAB is siding with those that don’t want to really address the youth obesity crisis.  If the FTC is allowed to conduct the same rulemaking procedures that the FCC and other agencies already do, it might actually be able to better protect consumers, including kids.  Shame on the IAB and its lobbyist colleagues for being on the side of those against the public health of our nation’s children.  By preventing the FTC to engage in consumer protection, the IAB, ANA and others are supporting the same deregulatory scheme which led to the current financial disaster for so many Americans and our economy.  Here’s the Reuters excerpt:

“A more powerful FTC could boost its oversight of advertising of sugary and salty snacks to children, the online collection of personal data by advertisers and green advertising, said Dan Jaffe of the Association of National Advertisers…This (financial reform/CFPA bill) is a fast moving train,” said Zaneis. “The FTC provisions that are likely to be added onto the CFPA bill really are industry’s no. 1 legislative priority.”

When Privacy Groups Raise Money from Facebook, Google, and the companies they are supposed to hold accountable

Facebook’s COO Sheryl Sandberg is the industry draw for CDT’s 2010 fundraising event.  “Gold” sponsors of the “host committee” include Facebook, Google, Microsoft and AT&T.  “Silver” sponsors (and there’s a long list) include Adobe, NCTA, eBay, Verizon, Intel, AOL, Time Warner Cable, News Corp., Visa, Yahoo, Comcast and a bevy of law firms that work on privacy and related issues.  They include Manatt Phelps, Wilmer Cutler, Wilson Sonsoni, and Arnold and Porter.

It’s troubling–to say the least–when any consumer/public interest group takes funding from the industry/industries it is supposed to hold accountable.  Conflict of interest questions and concerns need to be posed whenever the group takes a position and has funding from parties connected to the issue (think about Facebook and Google’s recent privacy problems, let alone legislation and policies now before Congress and the FTC).  It’s great to have extra money.  But we suggest groups “just say no” to such special interest relationships.

Interactive Ad Bureau boasts it “Lobbied extensively and proactively against” FTC Consumer Protection Proposals

In its annual report for 2009, the Interactive Advertising Bureau [IAB] cites as a accomplishment that it “Lobbied extensively and proactively against several proposals— including the FTC Reauthorization Act—that would grant broad newn rulemaking powers to the Federal Trade Commission.“  It also notes that the “IAB PAC had an active year supporting many key Congressional champions of the interactive advertising industry and was able to host the first ever IAB fundraiser.  The PAC begins 2010 with a healthy balance of over $55,000 cash on hand.“

Microsoft Differs from IAB Lobby on Strengthening FTC Consumer Safeguards [via a letter sent to CDD]

We asked both Microsoft and Google, which serve on the executive committee of the Interactive Ad Bureau [IAB]  trade lobbying group, whether they supported its recent letter opposing congressional action to strengthen the FTC. The letter was signed by IAB and other marketing and advertising organizations.  Microsoft has just replied.  We are glad they aren’t in lock-step with the ever so transparent–and terrified of consumer protection policy–IAB.  Here’s what they emailed me today:


Jeff,

 

Thank you for your inquiry.

 

As a company, Microsoft has not taken a position on the Consumer Protection Financial Agency bill.  As a whole, the bill is directed at other industry sectors.  Nor has Microsoft taken a position on the expansion of the Federal Trade Commission’s regulatory authority as proposed in that legislation.

 

Microsoft has supported the expansion of FTC authority, including in our longtime support for comprehensive federal privacy legislation and in a recent legislative proposal on protecting consumers related to cloud computing, where we said that the FTC should play a key role.  In the current environment, there ought to be better alternatives to guide the marketplace than de facto rulemaking through enforcement activity.

 

It is our view that there is merit to having FTC rulemaking authority mirror that of other agencies — we favor increased certainty and the ability for comment on proposed rules that will impact our industry.  At the same time, the reasons the FTC’s existing mechanisms were put in place (as articulated in the industry letter you cited) should not be ignored.  Perhaps there is room for a balanced approach.

 

We understand that the status of the financial reform bill may be uncertain, at least the status of the relevant provision in the Senate version of that legislation.

 

We are open to discussing these issues further with you and other interested stakeholders.

 

Sincerely,

Frank Torres

Director, Consumer Affairs

What the new online ad industry-sponsored plan to identify Behavioral-Targeted Ads and Data Collection with the letter “i” really stands for: ineffective [And should be relabeled “ID”—Ineffective and Disingenuous]

Statement of Jeff Chester, executive director, Center for Digital Democracy, Washington, D.C. www.democraticmedia.org

A new self-regulatory scheme designed to head-off meaningful consumer privacy rules by Congress and the Federal Trade Commission is to be released today, according to several reports.  In addition, the Council of Better Business Bureaus has issued a RFP asking for technology solutions to bolster its online advertising self-regulatory approach.

These efforts are trying to place a flimsy band-aid over a gushing consumer data privacy wound.  Disclosure and more opportunities to opt-out is an online ad industry copout. Interactive marketers have created a data collection monster.  What’s needed are Fair Information Principles for the digital age, enforced by regulators, which dramatically minimize how much data is collected, stored, sold and resold–and limit how it can be used.   Instead we get fancy package relabeling fashioned by Madison Avenue.

Consumers face a bewildering, far-reaching, and complex system created by the online ad business that collects and harvests their information—including financial, health, and other personal details—that is non-transparent and unaccountable.  These new self-regulatory initiatives are disingenuous, because they don’t address the real problem:  that through a range of largely stealth online marketing techniques, digital media has been designed to ensure that consumers provide reams of their personal data.

As the FTC holds its second privacy hearing this Thursday, and as the House Commerce Committee finalizes its proposed legislation, policymakers must ask themselves:  how can we do a better job protecting consumers–instead of enabling the same kind of self-regulatory approach that helped bring our economy to the brink of disaster.  Consumers and lawmakers should especially be concerned that the approach backed by Truste and Future of Privacy Forum will permit monopolistic broadband Internet Service Providers, such as Comcast and AT&T,  to gather even more personal information on their subscribers.

Where Does Google and Microsoft Really Stand–with the IAB and ad lobby or for Consumer Protection?

Both Google and Microsoft serve on the executive committee of the Interactive Ad Bureau, a trade association fighting against consumer privacy proposals in Congress and the FTC.  The IAB just sent a letter signed by other ad and marketing industry lobbyists opposing Obama and congressional proposals to expand the ability of the FTC to better protect consumers.  My CDD just sent emails to officials at both Google and Microsoft asking them to clarify where they stand on the IAB’s letter [see below].  Do our two leading online marketing leaders support financial and regulatory reform, including protecting privacy?  Or does the IAB letter–and Google and Microsoft’s own role helping govern that trade lobby group–really reflect their own position against better consumer protection? Not coincidently, the IAB’s PAC has expanded its PAC contribution giving to congress.

Why does the IAB and other ad groups want to scuttle a more capable FTC?  Think online financial products, including mortgages, pharmaceutical operated social networks, digital ads targeting teens fueling the youth obesity crisis, ads created by brain research to influence our subconscious minds, a mobile marketing system that targets us because it knows our location, interests and behavior.  The IAB is terrified that a responsible consumer protection agency will not only peek under the ‘digital hood,’ as the Obama FTC is currently doing.  But actually propose policies and bring cases that rein in irresponsible and harmful business practices.  So Microsoft and Google:  who are with?  Consumers or the special interest advertising lobby?
*****

letter to Google:  22 January 2010

Dear Pablo, Jane, Peter and Alan:

As you may know, the Interactive Advertising Bureau recently sent a letter  to Congress, along with other ad related groups, opposing the expansion of FTC regulatory authority as proposed in the Consumer Financial Protection Agency bill and related reauthorization [http://www.clickz.com/3636212].

Google serves on the executive committee of the IAB’s board.  For the record, does Google support IAB’s stance that, as news reports say, if the FTC is given additional enforcement and penalty-making authority, “the FTC could essentially act as an unelected legislature governing industries and sectors across the economy.”

If Google disagrees with the IAB’s letter, I ask that it make its position public as soon as possible.  I also respectfully request Google state its position regarding the Consumer Financial Protection Agency proposal, as well as its position on expanding FTC authority.

Regards,

Jeff Chester
Center for Digital Democracy
www.democraticmedia.org

letter to Microsoft:  22 Jan. 2010:

Dear Mike and Frank:

As you may know, the Interactive Advertising Bureau recently sent a letter to Congress, along with other ad related groups, opposing the expansion of FTC regulatory authority as proposed in the Consumer Financial Protection Agency bill and related reauthorization [http://www.clickz.com/3636212].

Microsoft serves on the executive committee of the IAB’s board.  For the record, does Microsoft support IAB’s stance that, as news reports say, if the FTC is given additional enforcement and penalty-making authority, “the FTC could essentially act as an unelected legislature governing industries and sectors across the economy.”

If Microsoft disagrees with the IAB’s letter, I ask that it make its position public as soon as possible.  I also respectfully request Microsoft state its position regarding the Consumer Financial Protection Agency proposal, as well as its position on expanding FTC authority.

Regards,

Jeff Chester
Center for Digital Democracy
www.democraticmedia.org