Thank You, Fox’s Levinsohn. Did You Hear What He Said, FTC?

It always helps to have interactive ad industry leaders make the case for the public interest. So we are gratful to Fox Interactive’s Peter Levinsohn (MySpace, IGN) for telling the New York Times that [my bold] “We have more information about our users, I believe, than any other site on the Web today.” Levinsohn’s comment was to explain the importance of its new interactive advertising technology acquisition, Strategic Data Corporation (SDC). Here’s what Online Media Daily said about the deal:
“Fox Interactive is already taking steps to mine the wealth of personal information found on profile pages on MySpace and other sites to better target ads. “With SDC, we’ll be able to plug all that rich data into their ad optimization technology and be able to fine-tune our ad delivery on a much more targeted basis,” explained Burkart. She said Fox is already working with brand marketers to figure out what kinds of user data are most valuable to them.”

SDC’s technology helps deliver precision targeted marketing. As the new Fox acquisition explained on its site, SDC automatically optimizes the selection of creative for each impression to maximize profitability by combining sophisticated statistical and predictive algorithms, demographic and geographic segmentation, and performance tracking. Our clients typically see network-wide (not just individual campaign) revenue increases of 50-150%. We are so confident of these results that we charge based on the actual increase in profit you measure… Using standard Intel-based servers, the software sustains real-time optimization of over 15-30 million impressions per server per day with a 1-2 millisecond response time.”

Source: “Fox Interactive Acquires Technology Ad Company.” Louise Story. New York Times. Feb. 23, 2007

“Fox Interactive Buys Strategic Data Corp., Plans Ad Targeting Upgrade.” Mark Walsh. Online Media Daily. Feb. 23, 2007

Rupert

We couldn’t resist this: “Fox Interactive Media (FIM)… announced today that it has completed the acquisition of interactive advertising technology company, Strategic Data Corporation (SDC)…SDC’s technology will enable FIM to deliver highly-targeted graphical performance-based advertising on literally billions of Web pages viewed each day across its growing network. Fox Interactive Media, which spans MySpace, IGN, Direct2Drive, AmericanIdol.com, AskMen.com and more, is among the most visited networks on the Internet with more than 135 million worldwide unique visitors each month and is the number one most viewed network in the U.S. with over 40 billion pages viewed each month…“We couldn’t be more pleased to join the Fox Interactive Media family,” said Richard Janssen, SDC CEO. “FIM is truly innovating how brands reach consumers in a socially networked world and we look forward to bringing our technologies and team to the effort.”

Paidcontent.org reports that SDC’s technologies provide “sophisticated statistical and predictive algorithms, demographic and geographic segmentation, and performance tracking…”

Source:
FOX INTERACTIVE MEDIA ACQUIRES INTERACTIVE ADVERTISING TECHNOLOGY COMPANY STRATEGIC DATA CORPORATION

Enhanced Media Network to Bring Hyper-targeted Ad Serving to Reality

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IAB: Worried that the Feds Will Do the Right Thing

Here’s a brief update on IAB. They are, notes ClickZ’s Kate Kaye, “…in the process of creating a Public Policy Council, to be comprised of Chief Public Policy Officers, General Counsels and IAB members. Tacoda Chairman Dave Morgan is heading up that operation, according to the IAB. Legislation and regulatory issues will have an enormous impact” on the interactive ad industry, said Rothenberg, noting, “We should be concerned, but we shouldn’t be crazy scared.”

Given that IAB’s new president Randall Rotherberg used to be a journalist (covering advertising for the New York Times and Ad Age), one would hope that he would be in the forefront of having his industry face up to facts. The basic business model is a threat to privacy and more. It’s gone beyond the time for “public policy councils” run by the industry’s spinmeisters. What’s needed is an honest admission of the problem, and support for a federal policy where consumers opt-in to all the techniques (after they are fully informed). That’s right. You need to get permission from individuals before you engage in behavioral targeting, retargeting, immersive rich media, etc. We imagine most people will consent. But it should be up to each person-not Ad Networks, IAB members, etc.

PS: Mr. Rothenberg: Don’t hide behind the press! We see that the IAB president quoted saying “The Interactive media industry is committed to striking the right balance between consumer protection and a consumer’s free online access to information and entertainment.” That’s not the real issue. No one is saying there shouldn’t be interactive advertising–or even the kind of personalized interactive practices the industry has embraced (with some notable exceptions). We understand the role which advertising plays to support the media. What we are saying is there have to be safeguards. In fact, ironically, I believe interactive ad practices done in the current stealth manner will help to undermine public confidence in the news media. The growing debate over online advertising is primarily about giving the public real information and control.

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.”

The Phoenix Center and Georgetown U School of Business: The Latest `Hyperbolic’ Attack on Network Neutrality

Yesterday, the “Phoenix Center” and the McDonough School of Business at Georgetown University jointly presented some scholarly-types who, trade press reports, approved the idea of the Internet evolving as a “two-tier” market. They held the event at the Dirkensen Senate Office Building, in order to make it easier for Hill aides to attend. According to Communications Daily, Dr. John Mayo of Georgtown noted that: “net neutrality legislation could limit markets’ flexibility to set prices. Mayo suggested the periodicals model to take the “hyperbole” out of the net neutrality debate, said needs more cerebral discussion, he said. “The level of certainty in arguments is too high,” Mayo said. At the same time, the potential investment at risk, depending on how legislation is written, is “staggering,” he said.

What these academics and groups like the Phoenix Center don’t want to recognize is an old-fashioned power grab. The phone and cable giants are fearful of an ever-evolving Internet where they will face numerous challenges to their monopolistic broadband plans. AT&T, Comcast, Verizon, and Time Warner are alarmed about an “always-on” network where anyone can be a multichannel provider of interactive video, or cheaply send voice and SMS messages. We wish Georgetown University would ask its historians, political scientists, psychologists and other academic experts to work with some of the folks at its School of Business. An economic lens is an insufficient instrument when one is discussing the “good and services” required for a democracy. The broadband Internet is a fundamental public service; an essential information utility in this era. We hope that academics and universities will examine this issue in a way which does true service to the debate. When a broadband platform is fundamentally connected to civic participation, cultural expression, journalism & public affairs, diverse ownership, community development and public safety, we suggest that the scholarly analysis has to be elevated to meet the challenge.

We note, btw, that Professor Mayo has served as an advisor and consultant to a number of companies and government agencies, including Enron, AT&T, Sprint, MCI and the FTC. Professor Mayo is also listed as an “external expert” for the Analysis Group. Among its clients include various telephone and cable companies, including Time Warner.
Source: “View Internet as Two-Sideded Market, Experts Say.” Anne Veigle. Communications Daily. dateline: Feb. 20, 2007. Subscription required.

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.

Yahoo! Exec Dissses Network Neutrality

A Yahoo! News Vice-President just called the battle to restore network nondiscrimination to U.S. broadband a “tempest in a teapot.” That’s according to a blog post from Celia Wexler of Common Cause. Scott Moore, the Yahoo! exec. was also reported saying that “in a competitive media marketplace, any company that withheld content that people wanted would find those individuals choosing another cable or broadband provider.” It’s clear he doesn’t cover the media industry! We’re not surprised that high-ups at Yahoo! would see network neutrality as something less than important to fight for. Yahoo!, Google and Microsoft know they have the clout–and the business partnerships–to ensure their content and service gets carried by AT&T, Verizon, Comcast, and Time Warner. We have also heard–via the Hill–that Google has largely been missing in action when it comes to the net neutral fight.

Ultimately, the big online companies will make their deal with NCTA and USTA. That’s why we urge readers not to believe that network neutrality is some kind of magic digital bullet. Having neutrality alone will not give us the democratic digital media system the country requires. Nor is it certain that Congress will pass anytime soon any policy that truly democratizes the country’s broadband infrastructure. NGO’s and others will still need to build a system, via the marketplace, that places the public interest before profits (although with sites and services that can still makes lots of money to help make sustainable civic expression and social justice work).

Before we help “Bail Out” PBS, Public Interest Must Be Guaranteed: No Long-term Funding without Serious Commitment and Change

Groups such as Moveon.org and others have rightly responded to the proposed Bush Administration budget slash to the Corporation for Public Broadcasting (around a 25% reduction to CPB’s funding for public television and radio). There is now a campaign to help restore funding and also politically pave the way for some form of permanent support—such as a “Trust Fund.”

While reversing the cuts is necessary, it is too early to support any permanent funding plan. More money won’t cure PBS’s problems. It will just enable the network to display higher-priced collectibles on Antiques Roadshow. The system needs to be restructured so the public interest is better guaranteed via a truly non-commercial approach. We also must think beyond today’s PBS and NPR to ensure there will be funding to support a much more expansive and diverse non-commercial digital environment. But to begin with PBS. Its annual budget should be required to have mandatory requirements for programming. For example, PBS—and its stations—should be mandated to reserve around 30% of annual revenues to pay for news and public affairs programming. Investigative news programming produced locally and nationally would be part of this commitment. A significant amount of funding would need to go for cultural programming. All children’s programming must be fully non-commercial: no underwriters, brand-tie-ins and even toy deals (that would be needed for news as well). Like news, the PBS “kidvid” block would receive a guarantee percentage of the Trust Fund revenues. PBS would be required to underwrite programming which reflect the needs of a diverse and under-served audience. It would have to ensure independent producers, especially women and producers of color, create at least half of all its annual programming. A review process would be created via an independent committee that would report annually to the public how well PBS was fulfilling its Trust Fund obligations. PBS and its stations would also be required to develop governance reforms which would help put the “public” back into public broadcasting. There could be similar approaches to NPR (This blogger has worked on PBS issues for many years, so my expertise is with the TV side versus public radio).

Finally, an independent body would be set up which would provide grants directly to producers and others who produce non-commercial content across various platforms. Such funding would grow in time as the need for stations recedes due to the digital transformation. (A Trust Fund would have to alter its funding strategies to reflect current and impending changes in media use). CPB would be replaced, of course. I don’t believe Congress will “free” public broadcasting soon. But as we begin the conversation about its future, much more serious deliberation is needed. We shouldn’t help save “Big Bird” if all the public is going to get is more of the same of what we have today. That’s why advocates need to clearly offer a serious restructuring that will better guarantee the country has a set of diverse non-commercial digital services it deserves.

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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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