The departure of Randall Rothenberg, the head of the Interactive Advertising Bureau, provides a critical opportunity for the IAB to revisit its position on protecting consumer online privacy (including Do Not Track). Under Mr. Rothenberg, the IAB lobbied Congress to restrict the FTC’s ability to protect consumers, including on privacy. With new leadership, the IAB could begin playing a more constructive role by working with consumer groups to build a consensus on federal privacy rules. Instead of confrontation and denial, we hope the online ad lobby pursues serious engagement with privacy advocates.  The IAB has become just another inside the Beltway lobbying group–and has lost credibility among many policymakers. A new IAB leader should be someone who can really help the mission of the industry by engaging in the kind of diplomacy and debate that supports the higher purposes of online advertising, digital publishing, and the public interest.
At Time, Mr. Rothenberg will now be in charge of its online ad network, which uses behavioral targeting and other interactive data techniques. How Time responds to the growing call for better consumer privacy will be one of Mr. Rothenberg’s new challenges.
Category: News Corp.
What News Corp/MySpace Should Have Told Reps. Markey and Barton
Yahoo isn’t alone in not being candid to Congress. Here’s what News Corp should have also said to the Congress about its data collection, profiling and targeting system.Â
It should have informed Congress how its Fox Interactive Media (FIM) data-mines its users daily. From its data-mining company: “FIM operates some of the highest-traffic websites in the world, including MySpace, and serves over 5 billion online ads across its sites per day. Each of these ads is optimized and targeted to specific audiences based on analysis of web traffic, user behavior and click patterns. As part of our targeted ad serving platform, we analyze nearly 2,000 identifying variables for each of the millions of visitors to our sites every day (tracking and analyzing, for example, whether a visitor likes jazz, but also whether they respond more to car ads than to pizza ads). While our targeting process was already one of the most advanced in the industry, we were eager to improve ad click-through rates further by fine- tuning targeting. To get to this next level of targeting precision, we needed to analyze massive volumes of data to discover patterns and identify relevant targeting criteria across segments and demographics. FIM implemented Greenplum for its parallel, multi-core architecture that could scale to support our massive data volumes, but also because the Greenplum data warehouse allows data analysis to be performed directly within the warehouseÂ
– instead of having to extract it first…our team can execute lightning-fast queries against a matrix that is 4 billion rows tall and 1 million rows wide, running tests against thousands of variables for each for the 5 billion ads FIM serves to visitors each day. What’s more, we can now complete 10,000 experiments against 20 million site visitors in just three hours. Previously, it took an entire day just to extract the data – and then another whole day to run the tests. The result has been faster and more efficient data analysis, which has in turn enabled more precise ad targeting, delivering up to 200% higher click- through rates for the 5 billion ads served daily across the FIM network…our research analytics team uses Greenplum Database to conduct tens of thousands of real-time tests against millions of users every day, analyzing each visitor’s reaction to ads against over with an absolute deluge of data.â€
The new “Digital Advertising Alliance” self-reg plan. See if it tells consumers what its sponsor ad groups really say to each other. That they track and target your “digital footprint”
On Monday, the new self-regulation magical “icon” that is designed to make the online ad industry’s privacy problems disappear will be unveiled. A new group called the “Digital Advertising Alliance” will unveil the icon-based plan–all timed to help head-off the kinds of protections and safeguards consumers require. The current financial crisis affecting tens of millions of Americans require that government and big business groups do more than pay digital lip service to consumer protection.
As a kind of litmus test for the new self-regulation effort, see if the icon and the information connected to it really informs you about how data on you is collected and used for profiling, tracking and targeting. For example, last week, the Interactive Advertising Association (IAB), one of the key backers of the new Alliance, released a guide to targeting consumers at the local level. Here’s excerpts of what they say. See if that little icon is being honest when you click it. Of course, we really require rules that eliminate the kind and amount of data that can be collected on you and you family and friends in the first place–as well as honest disclosure on the process. Note as well that all that data on you is expensive–and others are cashing in on information that belongs to you! From the new “Targeting Local Markets” guide:
Explicit profile data Targeting. definition–
Explicit data is “registration quality data†collected either online or offline. For online registration data, the user has certain attributes in his or her registration profile at a particular site or service, and that data is associated with the user’s Web cookie or some sort of audience database when the user next logs in. Offline registration data includes the sorts of data held in the massive offline direct response industry databases built up over the last several decades. These are then matched to a user online when that user logs in somewhere that is a partner of the data company. The site at which the user logs in, usually an online mail or similar site, sends the name/email combination to the data company, which then makes the match and sends back data…pricing–In general, first party data commands a far more variable premium than third party data…Third party data is usually available in much larger quantities, and yet there is often a fee of anywhere between $0.50 to $2.00 or more paid to the data provider by the ad seller – thus increasing the cost of goods sold (COGS) on the ad, and therefore increasing the price…
Behavioral Targeting (Implicit profile data Targeting)-definition-
Behavioral Targeting is the ability to serve online advertising based on profiles that are inferred from an individual user’s technical footprint and viewing behavior…As the medium has grown from a “browsing†experience to interactional so have the levels of information gathered. Newer forms of information include the data collected about influences, social preferences through social networks and an individual user’s content created online…The data is often gathered in real-time and can be used for real-time decision-making so that relevant advertising can be delivered dynamically to an individual user during their online session…Behaviorally targeted advertising commands a higher price because of targeted placement versus general run-of-site (ROS) advertising…Behavioral Targeting can be highly accurate when the user is leaving a digital footprint of their activities as they move through the Web.
Google, Time Warner, Washington Post, Verizon, Canoe Ventures [Comcast] Funding Online Ad Lobby’s Campaign Against Consumer Privacy Safeguards
The Interactive Advertising Bureau (IAB) is a lobbying group that is working to oppose federal (or state) legislation and regulation that would protect consumer privacy online. It recently led the lobbying campaign that removed from the new financial reform bill a key provision that would have enabled the FTC to better protect consumers. What companies are helping fund the IAB’s Orwellian named “Consumer Protection and Education Campaign” battling consumer and privacy groups? Here’s a list of the financial donors, who have ponied up about $500k so far. Other companies are contributing free online ad space for the IAB’s campaign–1 billion impressions worth. The donors are:
AdMob
AudienceScience
Canoe Ventures
Cars.com
CPX Interactive
eBureau
Eyeblaster
Feeva Technology
Google
IDG.net
IM Services Group
Mediamath
Meredith Interactive
Microsoft
Quantcast
Sharethis
ShortTail
Simulmedia
Time Warner
Traffic Marketplace
Tumri
Verizon
Washington Post
WildTangent
Teens and Online Privacy: Empowering Adolescents to Control How Online Marketers Can Stealithily Target Them and Collect Data
Some commentators–and groups funded by online marketers that target teens–are worried that proposals to the FTC and Congress that adolescent privacy be protected will somehow create a system that requires forms of age verification online. The coalition of leading consumer, child advocacy, health and privacy organizations filing comments at the FTC last week aren’t calling for the parental permission paradigm used by the Children’s Online Privacy Protection Act [COPPA] be extended to teens. But there are many online commercial services specifically targeting adolescents–that’s their target market. It’s those sites and services specifically focused on adolescents that we want to have better privacy safeguards.  We want those sites to be governed by an opt-in regime that gives teen users meaningful control of how their information is collected and utilized. Those sites should be required to engage in the Fair Information Principles known as “data use minimization.” Commercial sites targeting adolescents should make its data collection practices fully transparent and under the control by the teen (including a truly accessible privacy policy). In another words, a privacy safeguard regime that really should be available for everyone. Teens are ‘ground zero’ for much of digital marketing–for examples see our site: www.digitalads.org [especially the update section]. If you look at the reports on that site, you will see that the most recent scholarly thinking is that brain development in adolescents occurs much later than what was once thought. They don’t have the ability to effectively understand the intent of highly sophisticated interactive marketing and the corresponding data collection which underlies contemporary digital advertising. That’s why empowering them so they can protect their privacy strengthens their rights.
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.â€
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
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:Â 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:Â 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
Consumer and Privacy Groups at FTC Roundtable to Call for Decisive Agency Action
Washington, DC, December 6, 2009 – On Monday December 7, 2009, consumer representatives and privacy experts speaking at the first of three Federal Trade Commission (FTC) Exploring Privacy Roundtable Series will call on the agency to adopt new policies to protect consumer privacy in today’s digitized world. Consumer and privacy groups, as well as academics and policymakers, have increasingly looked to the FTC to ensure that Americans have control over how their information is collected and used.
The groups have asked the Commission to issue a comprehensive set of Fair Information Principles for the digital era, and to abandon its previous notice and choice model, which is not effective for consumer privacy protection.
Specifically, at the Roundtable on Monday, consumer panelists and privacy experts will call on the FTC to stop relying on industry privacy self-regulation because of its long history of failure. Last September, a number of consumer groups provided Congressional leaders and the FTC a detailed blueprint of pro-active measures designed to protect privacy, available at: http://www.democraticmedia.org/release/privacy-release-20090901.
These measures include giving individuals the right to see, have a copy of, and delete any information about them; ensuring that the use of consumer data for any credit, employment, insurance, or governmental purpose or for redlining is prohibited; and ensuring that websites should only initially collect and use data from consumers for a 24-hour period, with the exception of information categorized as sensitive, which should not be collected at all. The groups have also requested that the FTC establish a Do Not Track registry.
Quotes from Monday’s panelists:
Marc Rotenberg, EPIC: “There is an urgent need for the Federal Trade Commission to address the growing threat to consumer privacy. The Commission must hold accountable those companies that collect and use personal information. Self-regulation has clearly failed.â€
Jeff Chester, Center for Digital Democracy: “Consumers increasingly confront a sophisticated and pervasive data collection apparatus that can profile, track and target them online. The Obama FTC must quickly act to protect the privacy of Americans,including information related to their finances, health, and ethnicity.â€
Susan Grant, Consumer Federation of America: “It’s time to recognize privacy as a fundamental human right and create a public policy framework that requires that right to be respected,†said Susan Grant, Director of Consumer Protection at Consumer Federation of America. “Rather than stifling innovation, this will spur innovative ways to make the marketplace work better for consumers and businesses.â€
Pam Dixon, World Privacy Forum: “Self-regulation of commercial data brokers has been utterly ineffective to protect consumers. It’s not just bad actors who sell personal information ranging from mental health information, medical status, income, religious and ethnic status, and the like. The sale of personal information is a routine business model for many in corporate America, and neither consumers nor policymakers are aware of the amount of trafficking in personal information. It’s time to tame the wild west with laws that incorporate the principles of the Fair Credit Reporting Act to ensure transparency, accountability, and consumer control.â€
Written statements and other materials for the roundtable panelists are available at the following links:
CDD/USPIRG: http://www.democraticmedia.org/node/419
WPF: http://www.worldprivacyforum.org/pdf/WPF_Comments_FTC_110609fs.pdf
CFA: http://www.consumerfed.org/elements/www.consumerfed.org/File/5%20Myths%20about%20Online%20Behavioral%20Advertising%2011_12_09.pdf
EPIC: www.epic.org
Our new Journal of Adolescent Health article on the Youth Obesity Epidemic and Digital Marketing
Prof. Kathryn Montgomery and I just published an article in the Journal of Adolescent Health [JAH] on the the role interactive marketing plays in the current youth obesity epidemic. It is part of a special JAH issue focused on the obesity issue. It’s a very good introduction to the current digital marketing landscape, and is one of a series of reports we have done on the issue.
IAB Works to Undermine Obama Consumer Protection Plan [On its Exec. Board includes Google, Time Warner, Disney, NYT, CBS, WPP]
The Interactive Advertising Bureau (IAB) signed a July 20, 2009 letter sent to Rep. Barney Frank of the House Committee on Financial Services raising questions–and really attempting to undermine–the Obama Administration’s proposed Consumer Financial Protection Agency. Others signing the letter included the Business Roundtable, Consumers Bankers Association, Consumer Data Industry Association, Financial Services Roundtable, the Real Estate Roundtable and the U.S. Chamber of Commerce. The IAB wasn’t the only ad lobby group signing the letter; so did the 4A’s and the DMA. My colleagues in the consumer community view the letter as an attempt to derail the bill [the letter, which asks for a delay on the bill, says that “there will be significant dangerous, unintended consequences if the legislation is enacted in its current form.”]
Why would the IAB be concerned about the creation of a new powerful consumer financial watchdog? It’s because their members work with companies engaged in digitally-related financial products–including mortgages, loans, credit cards, and so-called lead generation services. The IAB benefits from the hundreds of millions spent year year on interactive ads for financially-related services (Among the top 15 digital advertisers in 2008 were Scottrade, Tree.com, TD Ameritrade Holding Co, Bank of America, FMR Corp, Experian, etc.). The IAB is clearly afraid of having an agency that would be empowered to investigate how online marketers sell and promote a wide range of financial products online.
We do wonder whether IAB board members that support the Obama Administration’s proposal (which is widely backed by consumer groups) understand the implications of the position it has taken. Personally, I believe the creation of the new agency is critically important. We must ensure that American consumers are never again victims when buying financial products. Given that most of us will be learning about and purchasing financial services online, the proposed new agency will have to address how a number of IAB’s members engage in digitally-delivered financial services.