Category: Microsoft

Interactive Ad Bureau to Congress and Public: If Your Privacy is Protected, The Internet Will Fail Like Wall Street!

It’s too disquieting a time in the U.S. to dismiss what a lobbyist for the Interactive Advertising Bureau said as merely silly. The IAB lobbyist is quoted in today’s Washington Post saying: “If Congress required ‘opt in’ today, Congress would be back in tomorrow writing an Internet bailout bill. Every advertising platform and business model would be put at risk.” [reg. required]

Why is the IAB afraid of honest consumer disclosure and consumer control? If online ad leaders can’t imagine a world where the industry still makes lots of money–while simultaneously respecting consumer privacy–perhaps they should choose another profession (say investment banking!).

Seriously, online ad leaders need to acknowledge that reasonable federal rules are required that safeguard consumers (with meaningful policies especially protecting children and adolescents, as well as adult financial, health, and political data). The industry doesn’t need a bail-out. But its leaders should `opt-in’ to a responsible position for online consumer privacy protection.

Google Policy Blog Fails to Address Yahoo! Deal & Threat to Competition & Privacy

Google’s post today by Tim Armstrong on why its proposed deal with Yahoo! isn’t a competition problem attempts to weave and spin this critical issue. It’s very revealing as well about Google’s own failure to develop into a company which honestly engages in self-examination and reflection. As one can see from the current melt-down of the financial markets, making money shouldn’t be the sole motivation for behavior. Google should have been able to acknowledge that a major deal with its leading search competitor raises serious questions worthy of broad debate and critical analysis.

The failure of Google to respond to the concerns raised by the World Association of Newspapers this week is reflective of this. Newspapers and content publishers are rightly worried about ensuring a diversity of funding sources for the production of news and other information necessary for a democratic society. It’s not as simple as Google’s Tim Armstrong (who wrote today’s post) suggests, that this deal with give consumers “relevant ads” and help keep Yahoo afloat as a robust competitor. In fact, Armstrong and Google, we believe, aren’t being candid here. When an online ad company dismantles (or turns over) a core part of its search function to its leading competitor, it becomes fatally wounded. As Google knows all well, search and display (and online content) are all intertwined. Yahoo’s future, in my opinion, as a full service online ad company is endangered, as more businesses realize that its search ad business relies increasingly on Google.

There are many troubling privacy issues with this deal, something Mr. Armstrong tries to dismiss by saying that [our emphasis]: “[W]e have taken steps in the Yahoo! agreement to make sure that neither company has access to personally identifiable user information from the other company.” But that leaves open an array of personal data collection points, such as cookies, IP addresses, and other statistical analysis online related data. (The failure, by the way, for the privacy issues of the proposed deal to be investigated by the FTC and Congress, is also disturbing).

Mr. Armstrong is Google’s “President, Advertising and Commerce, North America.” He directs their online ad sales. In responding to concerns about competition in the online advertising market–given its links to broader societal concerns–more than just assurances from the sales department is required.

Behavioral Targeters Use Our Online Data to Track Our Actions and, They Say, to “Automate Serendipity.” Attention: FTC, Congress, EU, State AG’s, and Everyone Else Who Cares About Consumer Welfare (let alone issues related to public health and ethics!)

NPR’s On the Media co-host and Ad Age columnist Bob Garfield provides policymakers and advocates with an arsenal of new material that support the passage of digital age consumer protection laws. In his Ad Age essay [“Your Data With Destiny.” sub required], Garfield has this incredibly revealing–and disturbing–quote from behavioral targeting industry leader Dave Morgan (Tacoda) [our emphasis]:

“Now we have the ability to automate serendipity,” says Dave Morgan, founder of Tacoda, the behavioral-marketing firm sold to AOL in 2007 for a reported $275 million. “Consumers may know things they think they want, but they don’t know for sure what they might want.”

Garfield writes that “In 2006 Tacoda did a project for Panasonic in which it scrutinized the online behavior of millions of internet users — not a sample of 1,200 subjects to project a result against the whole population within a statistical margin of error; this was actual millions. Then it broke down that population’s surfing behavior according to 400-some criteria: media choices, last site visited, search terms, etc. It then ranked all of those behaviors according to correlation with flat-screen-TV purchase…“We no longer have to rely on old cultural prophecies as to who is the right consumer for the right message,” Morgan says. “It no longer has to be microsample-based [à la Nielsen or Simmons]. We now have [total-population] data, and that changes everything. With [those] data, you can know essentially everything. You can find out all the things that are nonintuitive or counterintuitive that are excellent predictors. … There’s a lot of power in that.”

There’s more in the piece, including what eBay is doing. As the annual Advertising Week fest begins in New York, we hope the leaders of the ad industry will take time to reflect on what they are creating. You cannot have a largely invisible system which tracks and analyzes our online and interactive behaviors and relationships, and then engages in all manner of stealth efforts to get individuals (including adolescents and kids) to act, think or feel in some desired way. Such a system requires rules which make the transaction entirely transparent and controlled by the individual. The ad industry must show some responsibility here.

The IAB (US) “mobilizes” to Fight Against Consumer Protections for Online Media

Watch this online video of Randall Rothenberg speaking before a June Federated Media Publishing event. In Mr. Rothenberg’s worldview, demon critics of advertising (such as myself) are deliberately trying to undermine democratic digital media. This would be absurd, if it wasn’t so sad. Mr. Rothenberg is using scare tactics to whip up his members into a frenzy-all so they can fight off laws and regulations designed to provide consumers real control over their data and information. Luckily, Mr. Rothenberg will be on the losing side of this battle to protect consumers in the digital era. Regulators on both sides of the Atlantic understand how the digital marketing ecosystem raises serious concerns about privacy and consumer welfare. We have to say we are disappointed in John Battelle, the CEO of Federated (who wrote a very good book entitled The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture). Mr. Battelle should know that the online marketing system requires a series of safeguards which protects citizens and consumers. There is a balance to be struck here. Online advertisers have unleashed some of the most powerful tools designed to track, analyze, and target individuals–whether on social networks, or watching broadband video, or using mobile devices. We have never said there shouldn’t be advertising. We understand the important role it must play, including for the underwriting of online content. But the online ad system should not be designed and controlled solely by ad networks, online publishers, trade groups and online ad lobbying groups. It must be structured in a way which promotes as much freedom for individuals.

Google/Yahoo deal and its impact on newspapers

One of the issues the Center for Digital Democracy has asked the Department of Justice to investigate is the impact of the proposed deal between Google and Yahoo and its impact on the already endangered newspaper business. Both Yahoo and Google provide online search ads or related services for the majority of the country’s newspapers. Analyzing how the pairing of Yahoo and Google may affect payments to newspaper publishers, and whether there may be the potential loss of competition, is necessary. Given the current financial pressure on newspapers, CDD urged ‘DoJ to examine the deal to address whether it will contribute to a loss in revenues necessary to ensure Americans have access to print-oriented news resources.” (It’s also interesting to note that Yahoo was reported in the trade press in February 2008 as seeing the potential of its newspaper ad platform to even compete with DoubleClick–which at the time was already acquired by Google

Ad Biz Looks Critically at Google/Yahoo! Pairing

Just some excerpts from today’s coverage, to give policymakers and the public a sense of how the 10 year pact is viewed from inside the ad industry.

First, from Ad Age: “Yahoo is outsourcing search monetization to Google in a 10-year deal, the companies officially announced tonight. But advertisers see less competition and higher prices…But the agreement… doesn’t necessarily protect Yahoo from the possibilities that the deal will erode its search business in the long run or make Google an even more dominant player. When Google search ads are mixed in with Yahoo search ads for a particular search query, Google will almost always win the better placement… And if Google consistently wins, marketers may be less inclined to bother using the Yahoo system, instead choosing to put their optimization efforts toward a single system.”

Yahoo, Google Strike a Deal on Paid Search. Abbey Klaassen. Ad Age. June 12, 2008 [sub required]

Online Media Daily: “…some in the industry have questioned whether Yahoo brass thought about the repercussions of the deal in terms of competition and advertiser perception in the mid- to long-term.

“I think the financial rationale is pretty clear,” said Bryan Wiener, CEO of 360i. “But $450 million is a lot of money, so it can’t just be all tail terms that Google will be serving. I can’t imagine that there won’t be some very valuable commercial terms in that mix.” Wiener said that if advertisers no longer saw the value in buying keywords directly through Yahoo, then fewer companies would end up using (Yahoo’s Search Advertiser Platform) Panama in the long run.

According to Neeraj Kochhar, vice president/director of SMG Search, there are definite concerns among advertisers. “I don’t see this as a positive move in terms of competitive activity,” Kochhar said.”

Final Microsoft Rebuff Sends Yahoo into Google’s Arms. Tameka Kee. Online Media Daily. June 13, 2008 [reg. required]

Stephanie Clifford of the New York Times has a good blog post on advertising industry concerns about the deal.

From the Los Angeles Times, 6/14/08:  “The consolidation of everything under Google is not good,” said Aimee Reker, global director of search at digital agency MRM Worldwide. “It will aggregate so much power and control in one place that it no longer is an open marketplace.”

Congress and Anti-trust Officials Must Take Action on Google-Yahoo! Deal: Competition and Privacy Issues at Stake

The government must take swift action to prevent the creation of a digital combine that merges assets and services of the first and second leading online search advertising companies—Google and Yahoo!
Google is the country’s (and world’s) leading search firm. Yahoo is ranked number two and says it is the foremost online display advertising company. This combination potentially threatens user privacy, as more data (including behavioral and mobile) about consumers are shared or pooled by the two leading online giants. Competition in the online ad sector—already weakened by a series of takeovers and acquisitions—is seriously threatened. This deal will have a significant impact on the advertising industry, including agencies. Both Google and Yahoo also provide critical search advertising services for many of the nation’s leading newspapers. Congress will need to explore how this deal impacts journalism, especially at a crucial marketplace juncture for the traditional media industries. Yahoo is permitting Google to extend its reach into one its significant assets–paid search. Shareholders will also suffer, as Yahoo! will be viewed by advertisers as a less effective means to target consumers.

Statement on behalf of the Center for Digital Democracy

ATT: DoJ, EC and Congress: Yahoo!’s own claims should raise alarms about a Google or Microsoft deal

No one should sit by and let either Google or Microsoft carve-up or take-over Yahoo! without a serious examination of the competition, privacy, and other consumer protection issues. This week, Yahoo! ran a four-page ad inserted in Advertising Age. Here’s some of Yahoo!’s own copy for regulators and the public to ponder:

“Yahoo! delivers the largest audience in the U.S.-the most 18-34 year olds, the most 35-54 year olds, the most women….Today, Yahoo! reaches over half the world’s Internet users. And with our growing network of premium publishing partners, including over 625 leading newspapers, we’re working with the other half…Our insights and understanding of our users lead to smarter targeting, so we can connect the right audience with the most relevant message–yours…With more ways to connect to your customers more deeply than ever, the future is wide open.”

From Yahoo! Advertising Age insertion. June 2. 2008 entitled: “What Happens When You Can Connect To More Than 550 million People From Over 170 countries Who Spend 2 Billion Hours Each Month In One Place?”

A Yahoo! & Google Deal is anti-competitive, raises privacy concerns

Based on news coverage [reg. required], it appears that Google and Yahoo! will attempt to team up in some way. We will await to see the details. But we want to point readers to Yahoo! 2008 annual 10K report. It discusses Google’s role as a competitor–something which would basically vanish in any outsourcing of its search ad business. As Yahoo! explained, “[W]e face significant competition from companies, principally Google, Microsoft, and AOL, that have aggregated a variety of Internet products, services and content in a manner similar to Yahoo! Google’s Internet search service directly competes with us for Affiliate and advertiser arrangements, both of which are key to our business and operating results…Additionally, Google and Microsoft both offer many other services that directly compete with our services, including consumer e-mail services, desktop search, local search, instant messaging, photos, maps, video sharing, content channels, mobile applications, and shopping services.” Yahoo! also made clear that search was an integral part of its business plan: “We believe that we can expand our communities of users by offering compelling Internet services and effectively integrating search, community, personalization, and content to create a powerful user experience. We leverage our user relationships and the social community the users create to enhance our online advertising potential, as well as our fee-based services.” Once Yahoo!, in our view, cedes part of its search ad business to its leading competitor, it will not have the viability to pursue growth relying primarily on building out its display business. Search and display, cross-platform and application, are increasingly inseparable necessities in order to survive in the online ad business.

Why too, would Yahoo!, in essence, neglect its investment to improve its search ad technology–known as Panama. In its annual 10 K, Yahoo! explained that it “launched its new search marketing system, known as Project Panama, in the fourth quarter of 2006. This system provides advertisers with additional tools for budgeting, testing, and optimizing their marketing campaigns. This new system also provides a new ranking model launched in early February 2007 as the second phase of Project Panama that ranks ads by relevance in addition to keyword bid price. We believe the new search marketing system provides a more relevant search experience to users, more valuable customer leads to advertisers, and additional opportunities to our distribution partners. We have completed the global roll-out of the technology across all relevant geographies.”

As Yahoo! told shareholders and the SEC in 2007, “[O]ur Search offerings are often the starting point for users navigating the Internet and searching for information, whether from their computer or mobile device. In Search, our goal is to provide the world’s most valued and trusted search experience for users, advertisers and developers…” Undermining its own business by outsourcing search ads to its leading competitor will weaken Yahoo!s ability to be a “starting point” for both users and advertisers. Permitting Google to operate a portion of its leading competitor’s business would be harmful to online diversity as well. Having Microsoft acquire Yahoo! also raise serious competitive concerns, although they require thoughtful examination in a post `Google now owns DoubleClick’ environment.

Microsoft pitches interactive ad and branding “integrated campaigns… that don’t necessarily feel like campaigns”

Microsoft is holding its annual meeting with advertisers, to show off what it can do. We will have more to say about it, but for now ponder this from Robbie Bach, Microsoft’s President, Entertainment and Devices Division:

“We think there are screens and areas beyond the browser for people to reach. We think you can reach them, whether it’s on a PC, on a TV, or on mobile devices. We think there are integrated campaigns that can be built, that don’t necessarily feel like campaigns, and that don’t necessarily feel like advertising, in a world in which people want to be entertained.”