That’s the title of comments filed at the U.S. Federal Trade Commission by my Center for Digital Democracy and U.S. PIRG. I also just gave a presentation with the same name at last week’s meeting of data protection commissioners in Madrid, Spain.  It’s available here.
Here’s an excerpt:  Today, consumers online face the rapid growth and ever-increasing sophistication of the various techniques advertisers employ for data collection, profiling, and targeting across all online platforms. The growth of ad and other optimization services for targeting, involving real-time bidding on ad exchanges; the expansion of data collection capabilities from the largest advertising agencies (with the participation of leading digital media content and marketing companies); the increasing capabilities of mobile marketers to target users via enhanced data collection; and a disturbing growth of social media surveillance practices for targeted marketing are just a few of the developments the commission must address. But despite technical innovation and what may appear to be dramatic changes in the online data collection/profiling/targeting market, the commission must recognize that the underlying paradigm threatening consumer privacy online has been constant since the early 1990’s. So-called “one-to-one marketing,†where advertisers collect as much as possible on individual consumers so they can be targeted online, remains the fundamental approach.
The advertising lobby has been working to undermine the FTC’s ability to serve the public interest. Advertisers are fearful that the FTC–finally awakened from a long digital slumber–will actually investigate the numerous problems linked especially to marketing (think prescription drugs, financial marketing of subprime loans, etc.). They are especially concerned that the FTC will effectively address privacy and consumer protection problems related to privacy, interactive advertising, children and adolescents, and “green” marketing. Here’s the letter which was sent late yesterday to Chairman Waxman and Ranking Member Barton:
October 28, 2009
Chairman Henry Waxman
Rep. Joe Barton, Ranking Member
Energy and Commerce Committee
(via email)
Dear Chairman Waxman and Rep. Barton:
We write to support the provisions in H.R. 3126, the “Consumer Financial Protection Agency Act of 2009†(CFPA Act), designed to ensure that the Federal Trade Commission has the resources and authority to protect consumers from unfair and deceptive practices.
We believe that the FTC must play a more proactive role addressing critical consumer concerns, including privacy, online marketing, and food advertising to young people. Therefore, we fully support the legislative language in H.R.3126 that would enable the commission to conduct consumer protection rulemaking under the provisions of the Administrative Procedures Act (APA); provide it with aiding and abetting liability for violations of the Section 5 of the FTC Act involving unfair or deceptive practices; and enable it to seek civil penalty liability for unfair and deceptive practices found to violate Section 5. We also support providing the FTC independent litigating authority in civil penalty cases.
As you know, the FTC’s ability to serve consumers has been hamstrung because of its “Magnuson-Moss†rulemaking procedure. As a result, the FTC has not been able to effectively engage in a timely and effective rulemaking process. By providing the FTC with the same APA rulemaking authority enjoyed by other federal agencies, it will enable the commission to engage in consumer protection activities in a timely manner.
Respectfully,
American Academy of Child and Adolescent Psychiatry
Campaign for Commercial Free Childhood
Center for Democracy and Technology
Center for Digital Democracy
Center for Science in the Public Interest
Children Now
Consumer Federation of America
Consumer Action
Consumers Union
Consumer Watchdog
Free Press
Electronic Frontier Foundation
Media Access Project
Privacy Rights Clearinghouse
Privacy Times
Public Citizen
Public Knowledge
Public Health Institute
U.S. PIRG
World Privacy Forum
David Britt, CEO (retired) Sesame Workshop
Prof. Kelly Brownell, Yale University
Prof. Robert McChesney, University of Illinois at Urbana-Champaign
File this under “we aren’t concerned about the public interest when it may affect our bottom line.” At yesterday’s Web 2.0 Summit conference, a panel on the future of news included representatives from HuffPo, Google, the NYT and others. When a question was asked from the audience about behavioral targeting, here’s what Huffington Post CEO Eric Hippeau said [according to the WSJ]:
“it’s much ado about nothing. “I’d much rather see an ad I’m interested in,†he says. Efforts at regulation are made by people who “don’t get it.â€
Shame on Mr. Hippeau.  Perhaps he opposes protecting consumer privacy because it would be inconvenient while his company expands its online ad targeting business. HuffPost uses a range of online data collection and targeting tools, including Pubmatic for ad optimization, and Admeld. It uses Time Warner’s behavioral targeting subsidiary Tacoda [advertising.com] and also Google’s DoubleClick service. Here’s an excerpt from HuffPost’s privacy policy:
“The more we know about you, the better we are able to customize our web site to suit your personal preferences and interests… We may also from time to time send you messages about our marketing partners’ products. To maintain a site that is free of charge and does not require registration, we display advertisements on our web site. We also use the information you give us to help our advertisers target the audience they want to reach…the ads appearing on HuffingtonPost.com are delivered to you by DoubleClick, our Web advertising serving partner. Information about your visit to this site, such as number of times you have viewed an ad (but not your name, address, or other personal information), is used to serve ads to you on this site. And, in the course of serving advertisements to this site, third party advertisers may place or recognize a unique cookie on your browser.”
As we have said, we can both protect privacy and also foster the growth of the online ad market. Mr. Hippeau revealed a starkly uninformed–and crass–dimension to the HuffPo’s corporate leadership.
Steve Lohr of the New York Times reports in Bits that “Murthy Nukala, the chief executive of Adchemy, calls his company’s technology “statistical personalization.†It doesn’t really identify a person, he said. But by probing vast data sets, from click streams to marketing information from firms like Acxiom, Adchemy can identify the sorts of people -– by age, gender and interests -– that advertisers want to pinpoint.“We don’t hold any data. We just connect to 30 or 40 data sources,†Mr. Nukala said.”
Adchemy is a good example of the growing data collection apparatus that fine-tunes the pitch by using “customized marketing content” along with its real-time analysis. Here’s an excerpt from its website:
Highly customized marketing based on visitor context. All prospects – even anonymous ones – can be described by multiple attributes, including publisher, placement, search query, ad displayed, ad element clicked, geography, demographics, time of day/week/month and other marketer-defined attributes. Adchemy calls the sum total of all these attributes “visitor context.” At every level of the Customer Acquisition Funnel, the Adchemy Digital Marketing Platform dynamically generates the most customized marketing content for the prospect based on the visitor context.
Continuously optimized, real-time content delivery. Based on the user’s visitor context, the best content is served to each visitor in real time without any manual, human involvement. The learning engines proactively synthesize advertising performance and respond automatically to each customer with appropriate content based on powerful patent-pending statistical techniques. Adchemy’s patent-pending statistical techniques speed up the traditionally slow process of gathering statistically significant marketing insights.
The intrepid Variety columnist Brian Lowry took readers on a tour of a neuromarketing outfit that works for show-biz companies, among others. Here’s a excerpt:
Innerscope Research was birthed just three years ago, but the company has already found various entertainment and advertising clients for its biometric research, which employs eye-tracking technology as well as EKG monitors to gauge subconscious response along four key criteria: heart rate, breathing, moisture levels (or sweat) and movement.
“It’s very hard for people to accurately reflect their internal world,” says Innerscope CEO Carl Marci, noting that 75% of brain processing “is below conscious awareness.”…they have notched a number of entertainment clients looking to augment traditional research, including Fox, NBC and Discovery, along with a growing number of advertisers…Biometrics thus provides a diagnostic tool, able to pinpoint physical reactions to specific moments that the viewer might not even realize…Innerscope’s findings have included the revelation that people exhibit emotional responses as they fast-forward through commercial pods, meaning that ads are still registering to those viewing via TiVo or another digital video recorder. The company can also pinpoint whether a movie trailer, say, is generating the sort of “emotional engagement” that marketers hope to achieve.
“This allows our clients to see what their audience is seeing and feeling, not what they say they’re seeing and feeling,” Marci explains [Innerscope CEO Carl Marci].
source: The future of focus group testing/This test gets under your skin. Brian Lowry. Variety. October 5-11, 2009,
That’s from an important new researchpaper by Professor Catherine Dwyer of the Seidenberg School of Computer Science and Information Systems, Pace University. “Behavioral Targeting: A Case Study on Consumer Tracking on Levis.com” was presented at the 15th Americas Conference on Information Systems.  We have sent the paper to Congress, the European Commission and the FTC. In its summary, Prof. Dwyer explains that:
In order to illustrate the nature of consumer tracking, a case study was conducted that examined behavioral targeting within Levis.com, the e-commerce site for the Levis clothing line. The results show the Levis web site loads a total of nine tracking tags that link to eight third party companies, none of which are acknowledged in the Levis privacy policy. Behavioral targeting, by camouflaging the tracking of consumers, can damage the perceived trustworthiness of an e-commerce site or the actor it represents.
Teens are a major focus of online advertising. We have asked Congress and the FTC to develop safeguards to ensure adolescents have their privacy protected. As part of the public debate, it’s useful to review how online ad networks target teen users. Here are some examples:
Betawave (its 12-17 targeting service): “If it feels like it’s impossible to capture the attention of today’s short-attention-span teenager, we’d beg to differ. On average, teenagers spent 15 mins per session on our publisher sites and 73.7 mins per month. More importantly, their mindstate is highly receptive to advertising with stats 118% higher than industry average and 158% more likely to agree that advertisements influence their purchase decisions…What’s our secret? Our selection of casual games, virtual worlds, and social play sites that are in touch with their Teen and Tween audiences. We know how to create content to hold the attention of the American Teenager, but to also keep them coming back for more…Our Teen and Tween audience consumes all types of different media, but is addicted to the Internet. The content of our sites appeal to the “Influencers†— the kids who assert their preferences with parents and peers and impact the behavior of others…“Virtual World Integration: Imagine a marketing vehicle where users embrace sponsorship, where they constantly ask for more brands, and where advertising is seen as a validation of their community. Virtual worlds offer this experience to savvy marketers…Integrate your product into virtual worlds, and turn casual observers into brand champions.”
Kiwibox teen network [Burst Network]:Â “Kiwibox Teen Network, brought to you by Burst Network, is the premier online vehicle for advertisers looking to target the teenage audience of girls and guys that are currently in high school or college. The anchor site for the network, Kiwibox.com, is a popular social networking destination and online magazine for teens…
As a member of Kiwibox Teen Network, your site will get the attention of popular brand marketers and attract high CPM campaigns. Advertisers on Kiwibox Teen Network will include the best brand names in consumer electronics, telecom, entertainment, apparel/footwear, snacks and beverages, retail, beauty products, and fast food…Kiwibox Teen Network supports several types of Rich Media layer ad units, including Interstitials, Superstitials, Floating, Synchronized and In-Person Rovion ads. We have partnerships with the top Rich Media vendors like PointRoll, Eyewonder, EyeBlaster, Unicast, Interpoll, and Atlas… “
As we have explained to policymakers in the US and EU, the growing use of neuroscience techniques requires government scrutiny and regulatory safeguards. Even political campaigns appear to be using such methods. No one should be permitted, in my opinion, to devise any public effort that is designed to deliberately influence the unconscious part of our brain.
Here’s an except from a research paper by a Nielsen backed neuromarketing firm called Neurofocus.  The paper is “Absorption: How Messages Morph into Meaning And Value in The Mind,” and was written by Dr. A. K. Pradeep. [published September 2008]
Engagement brings you to the threshold. Absorption carries you beyond, to the state where your message or other material has been fully taken in by the consumer’s brain... Full absorption is also when your message or materials or retail environment, etc. return the highest rate of impact and value for your investment. But neuroscientific research demonstrates that you cannot, and will not, reach that goal consistently and most effectively unless and until you understand how the brain actually functions, and you shape your messages/material /environment accordingly.
For example, as I cited above, we have identified 67 specific ‘best practices’ that should be implemented when words and images are presented on a screen (any screen, from a TV or PC to a mobile phone or movie theater). They are the result of advanced neurological research into various brain functions, and especially research that has delved into the mysteries of diseases like Alzheimer’s, and brain conditions like ADD/ADHD, obsessive/compulsive behavior, and bipolar disorder.
Follow these best practices, give the brain what it wants and likes most, and you stand the best chance of success for your brand and your investment. Your message or materials will be absorbed directly into the consumer’s subconscious, where we can measure them for their effectiveness at the level devoid of any ‘outside’ contaminating influences like education, language, cultural ethnicity or other factors.
Coca Cola has developed what it calls a “Facial Profiler” as part of a online marketing campaign. The idea is that it will help identify people that look like you. Here’s what the Coca Cola site says:
“Facial Profiler is a one-of-a-kind app that matches and connects people via Facebook. But before we can do it, we need to compile a database of faces around the world. So add your photo to the database. The sooner it’s filled, the sooner we can unlock the results.”
Does CIA now also stand for Coke Intelligence Agency? Will Coca Cola link people’s faces with its other forms of data collection, like MyCoke rewards?
That’s from the overview section of an important new research report: Americans Reject Tailored Advertising and Three Activities That Enable It. Conducted by a team of academics in two leading universities–the Annenberg School for Communication, University of Pennsylvania and UC Berkeley’s Center for Law & Technology–it’s an essential text for those concerned about privacy, consumer welfare and civil liberties. The study is a concise overview of the issue, and includes a very important analysis and discussion.