Ad Industry Lawyer Spins in Ad Age that Privacy Will Be on “Back Burner.” Not Only Incorrect–but self-serving

This week’s Advertising Age has a “Legal Issues to Watch in 2009” column.  Written by Douglas J. Wood of Reed Smith, it claims that: “PRIVACY TO THE BACK BURNER- Congress and regulators are in a Catch-22: While under constant pressure from constituents and consumerists to curtail the use of personal information or behavioral targeting, they recognize that advertising is the backbone of the internet. So while there will be occasional skirmishes, the war on privacy will continue in its stalemate. Regulators will also see browser makers offering more control to consumers to block ads and the collection of personal information as adequate progress.”

Mr. Wood, it turns out is “a member of Reed Smith’s Executive Committee and the firm’s Advertising Technology & Media Group…and is General Counsel to both the Association of National Advertisers and the Advertising Research Foundation.

Perhaps Mr. Wood is too busy to really follow Hill and FTC developments, because he is wrong.  There will be considerable activity on the Hill and elsewhere.   His column should have been labeled as written by the lawyer for the ad industry lobby group.  But it does reflect a lack of insight about the online ad industry’s problems related to privacy and consumer protection.

The “Revised” Network Advertising Initiative Principles: Ghost-written by Bernard Madoff?

That was really what we felt reading the “NAI Response to Public Comments” released yesterday.  It accompanied the 2008 principles announcement by the self-regulatory trade online marketing trade group.  The “response” is worth reading, because it really reveals the inability of the group to meaningfully address how to protect consumers online.  You would think that an organization which has Microsoft, Google, Yahoo, Time Warner and many others as paying members could at least clearly state what happens to our data in the online marketing process.  But the real goal of the NAI is to prevent the enactment of serious state and federal privacy policies that would protect consumers. My group put out a statement yesterday discussing the new principles.

The credibility of Google, Microsoft, Yahoo and Time Warner are at stake.  They should be able to ensure that their own organization can honestly address the implications of online advertising.  But it’s time to abandon any call for self-regulation.  That has been a failure.  It’s clear that a growing number of consumer and privacy groups are calling for a legislative solution, as well as a more effective FTC.  Responsible online ad companies will support such regulation.

Google and Network Neutrality: Make Your “Open Edge” Proposals to the Telcos and Cable Companies Public

If the documents reviewed by the Wall Street Journal provide Google with “a fast lane for its own content,” critical questions are raised about its commitment to meaningful network neutrality.  The Google policy blog post suggests that the Journal misunderstood the meaning of the alleged negotiation documents.  What Google wants, they claim, is to develop an effective caching arrangement.  But there are legitimate critical questions that should be raised about the ultimate effect of a contractual deal which places  “servers directly within the network of the service providers.”

We believe Google is seeking this arrangement to ensure that its advertiser-based services, including so-called rich media applications, You Tube branded ads, and multi-media universal search applications, have priority.  We think the future of the democratic potential of the Internet is undermined when those with deep pockets can favor their content over others.  In essence, Google’s Fortune 1000 client base will get to jump to the head of the queue before non-profit, small business and civic applications.  We recognize that many applications use similar strategies.  But all this needs to to be fully publicly debated, especially given the incoming Obama Administration’s support for network neutrality and its own political connections with Google.

That’s why Google should make immediately public the proposals made to phone and cable companies.  Let’s thoughtfully review what they are asking for, understand the context, and engage in the necessary public discussion. Google needs to be forthcoming on this.

Google’s Doubleclick Using Widgets to “give advertisers the ability to tap into the incredible power of potential brand evangelists”

Google’s Doubleclick division is working with social media and widget advertising company Gigya so marketers can “integrate a viral component into any campaign to allow consumers to “snag” or “grab” the ad onto their personal homepage or social network page.” We think the Doubleclick release is very revealing. So here are some choice excerpt excerpts:

“Widgets are part of a fundamental change within the online marketing arena,” said Ari Paparo, vice president of advertiser products for DoubleClick. “Widget Ads provide audiences with the ability for self-expression and identification with well-loved brands while providing marketers the benefits of virality and engagement along with the measurability of traditional online channels.”…

“Incorporating viral functionality helps give advertisers the ability to tap into the incredible power of potential brand evangelists,” said Ben Pashman, vice president of business development with Gigya,…enabling great creative to enter a user’s social circle, where it may become an even more powerful, user-endorsed ad unit.”

Widget Ads may be distributed in a multitude of ways including branded websites, word-of-mouth outreach and even through another rich media ad… integration with the industry-standard DART platform allows for valuable Widget Ad metrics including impressions, interactions, video metrics, viral “grabs” for different social networks, and reach and frequency…”

Vint Cerf, “Chief Internet Evangelist,” Touts Google’s Brand Building Potential

Everyone, it appears, is expected to help Google sell its advertising and brand-building services to new clients. Even when they have the title as a “father” of the Internet. See this video interview of Vint Cerf from a May 2008 event in Singapore. It illuminates a number of Google’s advertising and marketing strategies, including using the power of social media to “virally” promote brands. Here’s a transcript:

“Ogilvy Insights: How can brands tap into the social media phenomenon? An Ogilvy interview with Vinton G. Cerf, Google’s VP & Chief Internet Evangelist. Thursday 22 May, 2008 – Singapore.

Vinton G. Cerf: “Ok, so here’s an interesting phenomenon: We know that you don’t read every book that’s published, you don’t see every movie that’s produced, you don’t watch every television program and every radio program. Something is helping you decide what to look at, what to read.

Part of that something, we’ll call advertising information. And I want to make sure that we recognize that this is information. We call it advertising when we’re not interested in it. When we’re interested in it, it’s information. What Google wants to do is to make sure that the information that you get, that comes from advertising sources, is interesting to you, not disinteresting.

And so let’s think now as a brand; the brand thinker says “well, I need to get in front of as many people as possible so they are aware of my existence and why my products and services should be attractive to them. But the way people filter their interests is to listen to what other people have to say – their friends, their families, their teachers and so on. So we need to take advantage of that filtering mechanism. One way to do that is to make sure that those people whose opinion you listen to, that tell you what movies to watch, what books to read or what products to buy, know about my brand. Now, how to I go about doing that? Well one way is to do the traditional way of somehow plastering your logo up everywhere you possibly can, but that’s a shock dam… (not sure what he says here)

The more interesting this to do is to get your brand in front of someone who has some authority and interest in the products and services associated with that brand, so that person now becomes an anchor and whose opinion now counts in his or her circle of friends. So we now need to identify which people are the opinion makers in these various social groupings.

How can we do that? Well, Google in a way has a tool which helps us do that. Because the way we present advertising information is to put it up only if we think it is really of interest to that party. And in fact the thing that makes our advertising mechanism so valuable is that we are pretty good at getting an ad that someone will click on in front of that person. Their interest level is indicated by the fact that they clicked on the ad. I’m not gonna click on an ad I’m not interested in, that’s advertising. If I click on it, it’s information. So we have a built in filter to find the people who are interested in this particular brand or in the products associated with it.

So now what we need to do is to help the person who clicked on that ad, become an opinion maker. And one way to do that is to say; “Well, that if that person is part of a social network, then the fact that they clicked on the ad gives me an opportunity to give them a tool for making their interest in my brand known to their friends”. So when you look at OpenSocial, you discover mechanisms in there that allow people to tell their friends or draw attention to their friends to things that they have seen that they think their friends would be interested in. So the more that we can facilitate that communication, the more powerful this particular method of spreading knowledge of brands is gonna be.”

Outside DoJ Expert Litvak on Why Google/Yahoo Deal was Opposed: “Google had a monopoly”

From American Lawyer Daily’s interview with Sandy Litvak (the outside expert DoJ asked to review the now scuttled Google/Yahoo search ad combine). Excerpt: “Google Inc. and Yahoo! Inc. called off their joint advertising agreement just three hours before the Department of Justice planned to file antitrust charges to block the pact, according to the lawyer who would have been lead counsel for the government. Sanford “Sandy” Litvack left Hogan & Hartson in September to consult for the department’s antitrust division on a possible court challenge to the Web giants’ agreement. The companies abandoned the deal in November after the Justice Department informed them it would seek to block the deal. “We were going to file the complaint at a certain time during the day,” says Litvack, who rejoins Hogan & Hartson today. “We told them we were going to file the complaint at that time of day. Three hours before, they told us they were abandoning the agreement.”…The never-filed government complaint would have charged that the agreement violated Sections 1 and 2 of the Sherman Act, Litvack tells the Am Law Daily in one of his first interviews since the companies canned the venture. Section 1 bans agreements that restrain trade unreasonably. Section 2 makes it unlawful for a company to monopolize or attempt to monopolize trade.

“It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly,” Litvack says.


source: Hogan’s Litvack Discusses Google/Yahoo. Nat Raymond. TheAmLaw Daily. Dec. 2, 2008

Google Expanding Video “Metrics” for Brands and Ad Agencies to help “Monetize” YouTube

From the UK’s New Media Age [excerpt]: “Google is the latest company to put its weight behind developing video ad metrics as part of its increased push to monetise its video properties, particularly YouTube.

nma can reveal the search giant is developing a planning tool for video ads to help brands and agencies understand before a campaign launches how effective it will be.

Likewise, it has also completed a project with research and consulting firm OTX that included looking at how to define consumer engagement withYouTube video ads…Additionally, it has ramped up work with its in-house rich-media specialist Tangozebra to develop new ad formats alongside external agencies and clients, while it’s also funding joint research projects with agencies to understand how web users are consuming online video.

The latter will focus on developing ad metrics for agencies and brands to better understand the impact of online video and rich-media ads, on top of analytics already provided by Google Insight. Jonathan Gillespie, Google head of media solutions and YouTube in the UK, said the research has a particular leaning towards planning tools.

“The whole point of doing this research is to fill a gap in our requirements,” he said. “The internet as a whole has been very good at delivering metrics after the effect. However, the front end and planning are things the internet hasn’t been particularly brilliant at.

“Therefore we’re developing a planning tool that will determine how we can best target audiences for advertisers on video while maintaining a good consumer experience,” Gillespie added.

source: “Google develops video ad planning tool to give insight.” Will Cooper. NMA. Nov. 6, 2008 [sub. required].

Google’s “Policy Fellowships”–Self-Serving Efforts to Help Ward Off Privacy and Online Marketing Protections?

Google has selected 15 organizations for its 2009 “Google Policy Fellowship.” Fellows are funded by Google and will work on “Internet and technology policy” issues over the summer. Take a look at some of the groups it selected and what they say the projects will be (and their positions on Internet issues). And then ask–is Google working to help undermine the public interest in communications policy? Think online privacy and interactive marketing as you read these following excerpts from a number of these groups:

“The Competitive Enterprise Institute is a 501(c)(3) non-profit public interest organization dedicated to advancing the principles of free enterprise and limited government. We believe that individuals are best helped not by government intervention, but by making their own choices in a free marketplace…Electronic privacy: CEI seeks to reframe the online privacy debate in terms of the potential benefits to consumers of greater information sharing, transparency, and marketing. Fellows will explore competing privacy policies and how they are evolving as the public grows more aware of privacy risks. This research will also encompass privacy-enhancing technologies that empower consumers to safeguard personal data on an individualized basis.”

“The Progress & Freedom Foundation (PFF) is a market-oriented think tank that studies the digital revolution and its implications for public policy… Online Advertising & Privacy Policy Issues: PFF defends online advertising as the lifeblood of online content and services, particularly for the “long tail,” and emphasizes a layered approach to privacy protection, including technological self-help, user education, industry self-regulation, and enforcement of existing laws, as a less restrictive—and generally more effective—alternative to increased regulation.”

“The Technology Policy Institute is a think tank that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world… Privacy and data security: benefits and costs to consumers of online information flows, and the effects of alternative privacy policies on consumers and the development of the Internet.”

“The Cato Institute’s research on telecommunications and information policy advances the Institute’s vision of free minds and free markets within the information policy, information technology, and telecommunications sectors of the American economy…Information Policy: Examining how increased data sensing, storage, transfer, processing, and use affect human values like privacy, fairness and Due Process, personal security, and seclusion. Articulating complex technological, social, and legal issues in ordinary language. Promoting the policies that protect these human values consistent with a free society and maximal human liberty.”

Google is also funding fellowships at other groups, including the partially Google funded Center for Democracy and Technology. The CDT connected Internet Education Foundation (which helps run the Congressional Internet Caucus, where Google is a corporate Advisory member) also will house a Google Fellow. There are a few public interest groups hosting Fellows that have an independent track record, including Media Access Project, EFF, and Public Knowledge. But awarding Fellowships to groups which will help it fight off responsible privacy and online marketing safeguards provides another insight into Google’s own political agenda.

Google’s YouTube– New Sponsored Search for Advertisers

The world’s most powerful search engine and online ad company has introduced a new feature on YouTube. Here’s an excerpt from the AP story: “… YouTube is letting advertisers promote their commercial clips alongside the search results at the Internet’s most popular video site… advertisers can now tie their commercials to specific words entered into YouTube’s search box…Some clips that might not rank high in the primary results of a YouTube search theoretically could appear on the first page as a “sponsored” video if a bidder is willing to pay a high enough price for a click and offers compelling content.”

source: YouTube channels Google with search-driven ads. Michael Liedtke. AP. November 12, 2008.

Why Google Can’t Say a Word that Starts With “P”—Privacy

The senior execs and DC lobbying team at Google really have a major problem addressing one of the company’s gravest problems–its lack of leadership protecting consumer/citizen privacy. While Google claims to reporters and others it’s been proactively strengthening its privacy policies, most of the changes have come as a result of pressure from policymakers and privacy advocates.

This week, Google released a booklet which “spelled out…2009 policy priorities” for the new Administration and Congress, including several Internet related issues. The booklet’s release coincided with a speech Google CEO Eric Schmidt gave at the New America Foundation in Washington, D.C. Missing from the booklet’s agenda was any discussion of privacy or the role and structure of online advertising (You would never know, for example, that Google was just forced by the Department of Justice’s antitrust division to drop its proposed deal with leading rival Yahoo!).

Google should be playing a leadership role supporting the enactment of serious privacy rights for the public–including “opt-in,” real transparency, user control, limits on retention, etc. If Google believes its golden digital goose will be baked once consumers better understand and control how they are being profiled and targeted, they should examine how it defines corporate social responsibility. But Google’s current approach—we can’t admit we are collecting your data for interactive marketing and cannot even say the word privacy in public-– will ultimately have consequences for Google’s future–including its share price.