Category: interactive marketing

IAB and its Proposed Privacy Guidelines: Will Fail to Effectively Protect the Public

So relieved where some in the interactive ad business when they read the FTC’s staff proposed privacy principles released last month that commentators described the reaction as the industry had “dodged a bullet” and “breathed a sigh of relief” [“FTC Online Ad Targeting Guidelines: Industry Breathes A Sigh Of Relief”].

Now Paidcontent describes plans underway by the IAB to offer “privacy standards,” via a “15-member working group,” that includes Time Warner, Microsoft, Yahoo! and others [“Online Ad Industry Groups Take Steps To Self-Police”]. According to the January 4, 2008 article by David Kaplan “[T]he IAB task force will address issues of consumer notice and choice, in terms of deciding the context for selecting opt-in or opt-out.”

IAB lobbyist Mike Zaneis says in the article that “[T]he level of appropriate choice needs to be flexible…consumer regulation will prove to be more efficient and powerful than government regulation.” Zaneis considers the campaign against Facebook that resulted in some modest–and ineffective in my view–changes in its data collection system as an illustration of “consumer regulation.” It’s clear that the IAB is incapable of developing a policy that will protect consumers. Anyone who understands the contemporary dimensions of the interactive marketing industry–and has the public welfare in mind–should recognize what is required. The IAB will not be taken seriously if it can’t deliver the truth (it’s so far failed to protect the public from troubling online lead generation practices, for example. See our November 1, 2007 FTC filing). Yahoo!, Microsoft, Time Warner and others on the committee should lead–and not follow–advice from the IAB that will lead to prolonged political conflict–in Europe, in Congress, at the FTC and FCC, and with the incoming Administration.

Real governmental rules are required–including measures that effectively protect every consumer and also address vulnerable groups and sensitive marketing issues. The IAB’s old school Beltway mentality will likely give online advertisers a bad name. Where are the ad industry’s thoughtful leaders who can help steer the IAB in an honorable direction?

DoubleClick tracks 50 different consumer data metrics now; what happens after Google merger?

Something to think about, here and in the EU. From a 2006 Businessweek story [excerpt, our italics]:

“The race is on to find new ways to track customer behavior. Advertisers and agencies are progressing far beyond the standard arithmetic of counting clicks and page views. They’re tracking the to-and-froing of the mouse on Web pages, and they’re finding new ways to group shoppers by age, Zip Code, and reading habits. CEO David S. Rosenblatt of DoubleClick Inc., which serves up some 200 billion ads a month for customers, says that every campaign now allows for 50 different types of metrics.”

source: “Wiser about the web.” Businessweek. March 27, 2006

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Why We Need Real Privacy Protections for Online: Read this “Risk Factor” from new SEC filing

ExactTarget is an email marketing company, working with such companies as “Careerbuilder.com, Expedia.com, Florida Power and Light, Gannett Co., Inc./USA TODAY, the Indianapolis Colts, The Leukemia & Lymphoma Society, Liberty Mutual Group, Papa John’s and Wellpoint, Inc.” They just filed for an IPO (known as S-1). Here’s a important excerpt:

“The ability of our clients to solicit, collect, process and use data derived from their customers may be restricted by existing and future privacy laws and regulations. In turn, we may be restricted from providing certain services, required to implement additional procedures and security systems and be exposed to the costs and liability associated with complying with or violating those regulations, all of which could harm our business.

Existing laws regulate the solicitation, collection, processing, transfer, use and other exploitation of consumers’ personal information and other types of information. Such laws and regulations may require companies to implement privacy and security policies, permit users to access, correct and delete personal information stored or maintained by such companies, inform individuals of security breaches that affect their personal information, and, in some cases, obtain individuals’ consent to use personal information for certain purposes. Additional privacy laws and regulations are possible and they could, if enacted, prohibit the use of certain technologies that track individuals’ activities on web pages or that record when individuals click through to an Internet address contained in an email message. Such laws and regulations could restrict our clients’ ability to collect and use email addresses, page viewing data and personal information, which may reduce demand for our products and services. Some regulations may cause our clients to insist that we adopt or implement certain security and privacy policies and procedures, or to implement certain security measures. The cost to comply with such demands or regulations could be significant and would increase our operating expenses, and we may be unable to pass along those increased costs to our clients.”

To Cache a Thief: In their own words…Jones Day work in both U.S. and EU on behalf of DoubleClick:

This is G o o g l e‘s cache of http://www.jonesday.com/experience/experience_detail.aspx?exID=S11555 as retrieved on Nov 9, 2007 17:05:06 GMT.
G o o g l e‘s cache is the snapshot that we took of the page as we crawled the web.
The page may have changed since that time….

Client(s): DoubleClick Inc.

Representation: Acquisition by DoubleClick

Principal Professional(s): Joe Sims, Thomas Jestaedt, Alexandre G. Verheyden, Michael S. McFalls, Chris Ahern

Lead Practice(s): Antitrust Mergers/Joint Ventures

Industry(s): Media

Summary: Jones Day is advising DoubleClick Inc., the digital marketing technology provider, on the international and U.S. antitrust and competition law aspects of its planned $3.1 billion acquisition by Google Inc. The proposed acquisition will combine DoubleClick’s expertise in ad management technology with Google’s internet search and content platform. The transaction is currently under review by the U.S. Federal Trade Commission (FTC) and European Commission.

Related Services
Professional Representation

The Jones Day, Google/DoubleClick & FTC conflict of interest: a higher standard is required by the agency

Our lawyers are advising my organization on this matter, but I want to remind readers of one point. John Majoras of Jones Day is listed on its web site as the “Partner-in-Charge of business development in the Washington, D.C. Office and is a member of the Firmwide Business Development Committee.” [better read it now before Jones Day removes it!]

In that position, his role raises conflicts of interest with cases involving the FTC, in my opinion. With an issue involving the future of the Internet and the fate of digital media in a democracy, the highest standards are required. Chairman Majoras should have recused herself in this case. Jones Day should not have taken on DoubleClick as a client. Jones Day’s removal of the web pages discussing its role as advising DoubleClick in both the U.S. and EU raises serious questions about the firm’s activities in this merger case. There are so many key questions that must be publicly resolved. When did Jones Day begin representing DoubleClick? When did it announce, via its website, internal communications system, and through its representation with clients, regulators, and other outside parties, that it was representing DoubleClick? Did the FTC staff learn of the relationship between their boss’s husband’s law firm and the merger? (Please don’t tell me that such a relationship, even if spread informally, doesn’t have an impact on the proceeding.)

The public requires the highest standards of conduct from its public officials and leading law firms. This incident illustrates that more must be done to make such institutions accountable. Yesterday’s FOIA request by EPIC asking that the FTC provide it with all records related to its communications with Jones Day in this merger case (and related privacy issues) is a step in the direction of obtaining some sunshine.

Over the last six months, we have been focused on the business and privacy issues related to the Google and DoubleClick merger. We knew a huge lobbying operation was in effect, with Google having added significant political capacity in D.C., and various competitors (Microsoft, the phone companies, Yahoo!) jockeying for position. Our job at CDD was to provide some honest analysis about the realities of the online advertising business–its market structure, goals, and privacy threats. We didn’t have the time–nor the resources–to dig into the political aspects of the issue. Sadly, there was little serious journalism on the deal as well. But last Monday we decided to examine what role Jones Day was playing in the Google merger and learned–via its website–that it represented DoubleClick.

This case illustrates something we all know. That the big money and special interest nature of Washington politics is at odds with the concerns and needs of the average American. As I said, a higher standard is required–for public service, disclosure and intellectual rigor (something we believe the FTC has failed to do in this case and related privacy matters). It’s a story that not going away. That’s why we are writing about it–and keeping a watch as well!

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Microsoft cooks your data: Gatineau and behavioral targeting

As our online behaviors are continually tracked and analyzed, more about us is known–by marketers and others. Web analytics–software that analyzes how one interacts with a site, is being merged with behavioral measurement and other identifying technologies. Microsoft is moving further in this area, including with its “Gatineau” product. Explains Online Metrics Insider:

“Once demographic information is captured in a registration database, it can be joined with behavioral data in the Web analytics system and reported on. For a real-world example of analytics/demographic integration, take a look at what Microsoft is doing with Gatineau, the company’s free Web analytics offering currently in beta. Microsoft is joining Web site behavioral data with rich demographic data from MS Live profiles.”

What can Microsoft collect? The Micro Marketing blog explains that “Gatineau provides unique insight into the age, gender, and occupation of your site’s visitors…Microsoft stores demographic and behavioral targeting data about a person separately from their contact information with strong safeguards in place to prevent “unauthorized correlation” of the separate data sets…What kind of data is accumulated? Certainly the information you supply when signing up for Hotmail or any number of Microsoft services. As well, your behavior on Microsoft web sites—which sites you visit, which parts of those sites, and how often. Also, publicly available data supplied by third parties may be used to complete your profile…From this data a site can build a detailed profile of the content that interests you and then use that profile to provide additional content or offers relevant to your interests.”

In another words–where is the FTC, the EC, and other privacy regulators!

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Statements on Mark Zuckerberg’s “Thoughts on Beacon” announcement

From: Jeff Chester, Executive Director, Center for Digital Democracy [202-494-7100]

Kathryn C. Montgomery, Ph.D. Professor of Communication, American University. Author of Generation Digital: Politics, Commerce, and Childhood in the Age of the Internet (MIT Press, 2007) [202-885-2680]

Jeff Chester: “Today’s announcement that Facebook users will be able to turn off Beacon, following last week’s opt-in changes, is a step in the right direction. But Mr. Zuckerberg isn’t truly candid with Facebook users. Beacon is just one aspect of a massive data collection and targeting system put in place by Facebook. It’s not really about the company’s desire ‘to build a simple product…lightweight’ that would, as he writes, ‘let people share information across sites with their friends.’ Mr. Zuckerberg’s goal, as he explained on November 6, 2007, was to transform Facebook into ‘a completely new way of advertising online.’ Facebook has rewired its social network to better serve the data collection interests of marketers who, promised Mr. Zuckerberg, are now ‘going to be a part of the conversation’.

“Mr. Zuckerberg can’t simply now do a digital “mea culpa” and hope that Facebook’s disapproving members, privacy advocates, and government regulators will disappear. Nor should Facebook’s brand advertisers permit this statement to diminish the real privacy and security concerns embodied by Facebook’s new targeted ad system. CDD will continue to press U.S. and EU regulators to address Facebook’s significant privacy problem.”

Kathryn Montgomery: “Facebook’s announcement today is a stopgap measure designed to quell the huge public outcry from consumer groups and users over its ill-advised new marketing scheme. The move to allow users to turn Beacon off entirely may restore a small measure of control to Facebook’s members, but it is by no means an adequate safeguard for ensuring privacy protection on this and other social networking platforms. These companies are continuing full steam ahead with new generation of intrusive marketing practices that are based on unprecedented levels of data collection and personal profiling. Regulatory agencies in the U.S. and in Europe need to conduct a thorough investigation of these new forms of social network marketing and develop rules to ensure that consumers are fully protected in the emerging broadband era.”

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EC Enisa Report Underscores Privacy Threats and other Risks from Social Networks: Wake-Up Time for Facebook, MySpace, IAB, FTC, Congress. Rules & Safeguards Required

The expanded targeting based on user profile activity launched last month by both Facebook and MySpace underscore why we must craft federal (and EU) rules to govern the data collection apparatus of social networks. By combining behavioral targeting, transaction data, and profile information, Facebook and others have entered into a new territory. Even industry insiders understand how a line has been crossed: one senior VP at Digitas (part of the Publicis Groupe ad industry empire) noted that [our emphasis]:

“Facebook has made an announcement that has major implications for how marketers can communicate to members going forward. Essentially, Facebook said that it will allow marketers to target members with ads based on its user’s personal profiles, social connections and even the recent activities of each user’s extended network.

This announcement marks a significant departure in the way social networks have been organized to date. Until now, marketers have had limited opportunity to serve ads directly to users within the social network. With this change, marketers will now have the opportunity to target consumers directly based on attitudinal, behavioral and demographic attributes included directly in or inferred from personal profiles and connections online.”

We have sent out to the FTC today this new report [pdf] by ENISA—the European Network and Information Security Agency. Released in October, “Security Issues and Recommendations for Online Social Networks” is worth reading—for its clear and thoughtful analysis and, frankly, its disturbing implications. It’s clear from the start of the paper that social networking sites (SNS) are more than just commercial or personal playgrounds—they are, notes ENISA—“…all-embracing identity management tools…” As the report explains:

“Users are often not aware of the size or nature of the audience accessing their profile data and the sense of intimacy created by being among digital `friends’ often leads to disclosures which are not appropriate to a public forum. Such commercial and social pressures have led to a number of privacy and security risks for SN members.”

Among the “threats” the report lists includes:

1.1 Digital dossier aggregation: profiles on
online SNSs can be downloaded and stored
by third parties, creating a digital dossier of
personal data.
1.2 Secondary data collection: as well as data
knowingly disclosed in a profile, SN
members disclose personal information
using the network itself: e.g. length of
connections, other users’ profiles visited
and messages sent. SNSs provide a central
repository accessible to a single provider.
The high value of SNSs suggests that such
data is being used to considerable financial
gain.
1.3 Face recognition: user-provided digital
images are a very popular part of profiles
on SNSs. The photograph is, in effect, a
binary identifier for the user, enabling
linking across profiles, e.g. a fully identified
Bebo profile and a pseudo-anonymous
dating profile.
1.6 Difficulty of complete account deletion:
users wishing to delete accounts from SNSs
find that it is almost impossible to remove
secondary information linked to their
profile such as public comments on other
profiles.

Among the report’s other recommendations include the need to consider reviewing regulatory safeguards and data protection law, such as the FTC’s Fair Information Practices. Social networks have become a place where people are living out their lives, sharing intimate details about their identity. They cannot be operated as data mining and digital marketing operations solely. They must operate in the public interest as well, including rules protecting privacy for those under 18.

It’s time for a broad range of stakeholders to work together to address what must be done.

PS: ENISA held a conference on the issue last June, featuring a number of interesting papers.

Mr. Murdoch’s Gets Religion: Will Give the Faithful some of that `Old Time’ Behavioral Targeting

A brief the `spirit-meets-the-digital-age’ note just in time for the holidays. Paidcontent.org reports that Rupert Murdoch’s News Corp. will acquire Beliefnet, a “multi-faith community site.” Beliefnet describes itself as the “largest spiritual website.” Its mission is “to help people like you find, and walk, a spiritual path that will bring comfort, hope, clarity, strength, and happiness. Whether you’re exploring your own faith or other spiritual traditions, we provide you inspiring devotional tools, access to the best spiritual teachers and clergy in the world, thought-provoking commentary, and a supportive community.”

As Paidcontent notes, the acquisition makes sense, given Murdoch’s corporate “faith-based efforts including Fox Faith, the 20th Century Fox line of movies aimed at the religious set and operating under Fox Home Entertainment, publishing houses HarperOne and Zondervan.”

But under the deal, those faith and spiritual seekers will be the focus of behavioral targeting and micro-marketing, courtesy of Fox Interactive Media (the Murdoch unit that operates MySpace, among other News Corp. digital properties). Beliefnet will “be using FIM’s targeted ad delivery platform.”

Now we will have to considering that in addition to the FTC, we will need to ask the Vatican, the National Council of Churches, and the Union for Reform Judaism to also launch investigations into behavioral targeting! That ‘old time’ religion meets the digital era.

The news media and behavioral targeting connection

It’s long been a concern that so many news organizations–or their parent entities–have embraced behavioral targeting (and so many other types of online marketing techniques) without clear disclosure to users, readers and viewers. There should be stories explaining what’s going on, exposing the techniques used that threaten privacy, analysis on the implications to journalism, editorials supporting reform, etc. We have covered some of these issues in our book and on this blog. But as a reminder, we run an excerpt from a Tacoda want ad for online sales manager: “TACODA®, Inc. (www.tacoda.com) is the world’s largest and most advanced behavioral targeting advertising network… Major US media partners include Dow Jones, The New York Times Company, NBC Universal, … [and] USAToday.com.”

All the news that fit to click, indeed.