Category: interactive advertising

Eyebaster Tells the SEC about its business “to track Internet users and their online behavior” for profiling

Eyeblaster is a rich media online advertising technology company which filed a S-1 with the SEC last March (for an initial public offering). Here’s the section on privacy:

“Privacy concerns could lead to legislative and other limitations on our ability to collect usage data from Internet users, including limitations on our use of cookie or conversion tag technology and user profiling, which is crucial to our ability to provide our solutions and services to our customers.

Our ability to conduct targeted advertising campaigns and compile data that we use to formulate campaign strategies for our customers depends on the use of “cookies” and “conversion tags” to track Internet users and their online behavior, which allows us to build anonymous user profiles and measure an advertising campaign’s effectiveness. A cookie is a small file of information stored on a user’s computer that allows us to recognize that user’s browser when we serve advertisements. A conversion tag functions similarly to a banner advertisement, except that the conversion tag is not visible. Our conversion tags may be placed on specific pages of clients of our customers’ or prospective customers’ websites. Government authorities inside the United States concerned with the privacy of Internet users have suggested limiting or eliminating the use of cookies, conversion tags or user profiling. Bills aimed at regulating the collection and use of personal data from Internet users are currently pending in U.S. Congress and many state legislatures. Attempts to regulate spyware may be drafted in such a way as to include technology like cookies and conversion tags in the definition of spyware, thereby creating restrictions that could reduce our ability to use them. In addition, the Federal Trade Commission and the Department of Commerce have conducted hearings regarding user profiling, the collection of non-personally identifiable information and online privacy.

Our foreign operations may also be adversely affected by regulatory action outside the United States. For example, the European Union has adopted a directive addressing data privacy that limits the collection, disclosure and use of information regarding European Internet users. In addition, the European Union has enacted an electronic communications directive that imposes certain restrictions on the use of cookies and conversion tags and also places restrictions on the sending of unsolicited communications. Each European Union member country was required to enact legislation to comply with the provisions of the electronic communications directive by October 31, 2003 (though not all have done so). Germany has also enacted additional laws limiting the use of user profiling, and other countries, both in and out of the European Union, may impose similar limitations…

If our ability to use cookies or conversion tags or to build user profiles were substantially restricted due to the foregoing, or for any other reason, we would have to generate and use other technology or methods that allow the gathering of user profile data in order to provide our services to our customers. This change in technology or methods could require significant reengineering time and resources, and may not be complete in time to avoid negative consequences to our business. In addition, alternative technology or methods might not be available on commercially reasonable terms, if at all. If the use of cookies and conversion tags are prohibited and we are not able to efficiently and cost effectively create new technology, our business, financial condition and results of operations would be materially adversely affected.”


Opposition to Google/Yahoo! (or other mergers) Should be Based on Principle: Digital Pawns in Play?

Yesterday, we were contacted by a reporter asking our position on the possible Google/Yahoo! search advertising deal (we are opposed to such an arrangement, on both competition and privacy grounds). When we read the story online, we learned that one of the groups sending a letter to the DoJ was the Black Leadership Forum. That raised our concern, since we know that the Black Leadership Forum has had relationships with phone and cable companies. It has also, in the past at least, worked with Issue Dynamics (a company which helps phone, cable and other interests “organize” support from not-for-profit groups. I cite Issue Dynamic’s role with the Black Leadership Forum on page 75 of my book.).

We have not read the letter to the DoJ. Nor do we know of any financial or other relationship between the Forum and any of the many interests who are fighting Google (phone and cable companies, for example, are opposed to Google’s positions on network neutrality). But we believe that all financial relationships, even from the recent past, need to be identified. I know this is Washington, where too many people “lease out,” as we say around my office. But there are important issues at stake with the new media marketplace. Reporters will need to do more to identify whether there are financial and other relationships with groups from Google, Microsoft, phone and cable, etc. But the real focus should be to examine the state of competition in the online ad market–and what it means for the future of communications in the digital democratic era.

See if you believe this Behavioral Targeter is really accessing “anonymous” info on you and your friends!

excerpt: “A behavioral targeting firm called Media6degrees said it’s engineered a workaround to the dual problems of data and relationship glut. Rather than look at a person’s friend list, the company uses a combination of cookies and ad server logs to pinpoint a person’s interests and generate anonymous profiles of her real friends… Media6degrees found an Internet analogy in referral information stored in ad server logs. Those logs can be made to cough up specific social networking profile pages an individual has visited recently by analyzing referring URL structures, which is potentially actionable information when juxtaposed with an action taken by the ad-clicker… Affinity groups of presumably anonymous individuals are created by grouping individuals who have visited the same set of profiles.”

But how does the firm get access to those server logs?… it partners with a network of advertisers that each volunteer to place a cookie on the browsers of Web users visiting its sites. Participating advertisers and site owners receive a small CPM to distribute its pixel.

“If you put up a media pixel on your site, we can not only help you retarget an individual who came to that site, but we can help you identify micro-affinity groups…”

source: New Firm Combines Social and Behavioral Ad Targeting. Zachary Rogers. ClickZ.com May 6, 2008

IAB’s Response to Calls for Consumer Privacy Rules: Hire More Lobbyists to Protect the “Wild West” of Data Collection & Ad Targeting

Granted, the IAB’s Washington, D.C. lobbying shop, opened last year, is a small operation. Now the IAB is in the process of hiring a second person for the office. No doubt IAB wants to protect the data collection and micro-targeting digital turf of its members. Former Tacoda and Time Warner exec. Dave Morgan perhaps revealed why the political stakes are so high for IAB members such as Google, AT&T, Comcast, Time Warner, Disney, CBS, NY Times, Washington Post, etc. in Media Post. As Morgan explained, “.. Everybody now knows that data is the fuel for growth. Everyone is starting to mine it and make it available to third parties…The big four (Google, Microsoft, Yahoo and AOL’s Platform A) are all opening up their networks and systems to leverage third-party data; so are the ad servers like WPP’s 24/7 Real Media; and so are the ad networks…We’re moving into a wild, wild west in monetizing real-time marketing data, and we’re going to need many more people that know how to do this…As we see this data take on more value and play a bigger role in our industry, the public policy implications are going to become much more pronounced.”

The New York Times Tracks its Online Audience: Boolean Boola

We have long believed that the New York Times needs to explain to readers and users the range of digital marketing technologies and strategies it deploys. The Times (and its Times Digital) uses behavioral targeting and is currently working with Revenue Science. Revenue Science proudly proclaims that the “behaviors of more than 120 million individuals are tracked and aggregated from across the Internet.” Claiming it relies on “powerful Boolean logic” to propel its tracking and targeting effort, Revenue Science explains that it places users into discrete targeting segments “… based on multiple criteria that demonstrate interest or intent to buy. For example, to qualify for our automotive audience, users might read multiple articles and take specific actions such as filling out a loan calculator. Revenue Science uses Boolean logic to find and segment multilayered behaviors to reach the right audience…Revenue Science Targeting Marketplace connects people to engaging advertising with the most advanced behavioral and targeting capabilities available, and the marketers that choose Revenue Science benefit from advanced data intelligence to reach the right people, at the right time, every time.”

The Times Co. has been a leader in the online marketing arena for almost two decades now (as we explain in our book). Online is an important revenue segment for the Times Co. (as it must and should be for all newspapers). The Times “web analytics group” is looking for a “senior web analytics manager.” We think what such a person and the group does raises privacy and related issues. Here is an excerpt from the job announcement: “The New York Times web analytics group is responsible for measuring and understanding the largest and most influential online newspaper audience in the world… As a senior web analytics manager, you will be expected to:

• Deeply understand the NYTimes.com audience and their behavior
• Support the analytic needs of the company by using WebTrends and other analytical tools to understand trends in web traffic…
Work with the NYT customer insight group to coordinate and focus quantitative and qualitative analysis related to audience behavior…”

Ultimately, web analytics, tracking and targeting techniques will have an impact on journalism-some good, others not-so-good.  When an online publication understands exactly what the most desirable demographic–or even individual–wants in terms of news, it will have an impact on news budgets, we believe. So think more entertainment and less serious journalism down the road. Not at places like the Times, we hope, but certainly at many other publications.  But for newspapers to remain a credible source of information during this crucial transition phase for journalism, they must address the privacy and online marketing “ecosystem” they have embraced.

Google’s Schmidt to the largest advertisers: “new forms of storytelling” will empower brands

The late preeminent communications scholar George Gerbner often explained that society needed to be concerned about who had the power to tell its stories. To set the values and the identity of the culture. Gerbner was especially concerned about television. Today, he would be focused on the emerging digital medium. That’s why we were struck by Google CEO Eric Schmidt’s address yesterday to the American Association of Advertising Agencies (AAAA) conference. According to a story in today’s New York Times [sub required] Schmidt explained that:

digital media will “create new opportunities for advertisers and new opportunities for information.” He added, “The scale of this is underappreciated.” The opportunities will come in the form of “developing new forms of storytelling”…

AAAA, of course, represents the leading global ad agencies. The stories they will tell for their clients will overflow our mobile devices, web browsers, and digital televisions. Content, communications, and commerce are fully intertwined in the new medium, it’s true. But advertisers–including Google–need to more than tread carefully here. These stories will have a tremendous influence on society–and social responsibility is required. But we will also need new governmental rules which address the `product placement is the news and entertainment we receive’ conundrum.

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Senator Dorgan: remember the role of digitally targeted ads & FTC in subprime mortgage scandal

Last November, my CDD and USPIRG filed an amended complaint with the FTC asking it to crack down on behavioral targeting, including its role in the subprime mortgage lending crisis. We are glad Senator Dorgan and others raised concerns that the FTC is failing to do its job in this critical area. Online mortgage lending–and related financial matters–requires serious consumer safeguards. Online marketers–including search engines and social networks–have looked the other way while a great tragedy has befallen so many in the country. We are urging Senator Dorgan to examine the CDD/PIRG complaint, and help get the FTC and other regulators on the case.

WPP’s 24/7 Real Media pushing “psychographic targeting” to “drive buyer behavior and brand affinity”

The online advertising industry is throwing rocks at our notions of consumer protection in the digital age. Don’t they realize a serious public debate about all this is required before they engage willy-nilly in advanced targeted?
Here’s an excerpt from WPP’s 24/7 April 28, 2008 release:”…announced that it is the first media network to deploy psychographic targeting through a partnership with Mindset Media, LLC. The new Mindset Buysâ„¢ will enable brand advertisers to target consumers with specific personality traits that drive buyer behavior and brand affinity across a broad range of consumer goods and services.Brand advertisers have long known that consumers’ states of mind can determine what they buy and what brands they choose, but advertisers have lacked an efficient way to target mass audiences of people with the right psychographics.

Now advertisers can make Mindset Buys on 20 different elements of personality, including creativity, assertiveness, self-esteem, and spontaneity. Each Mindset Buy on 24/7 Real Media can reach millions of U.S. consumers with the same personality trait, on a completely anonymous basis. The 24/7 network reaches 150 million unique viewers each month, across more than 1,500 sites globally…Psychographic targeting through Mindset Media represents the latest addition to 24/7’s advanced portfolio of targeting solutions, which also includes lifecycle management, search retargeting, geo-demographic, content, behavioral, retargeting and custom. Many of these can be combined to form an endless number of specific targeting options that can be delivered to any digital medium.”

From Mindset: “Our proprietary table of elements makes Mindset targeting possible. The table comprises 20 personality traits that drive buyer behavior and brand affinity across a broad range of consumer goods and services, from beauty care to banking, cars to credit cards, food to pharmaceuticals.”

Update: DM News quotes a 24/7 and a Mindset exec.: “[S]imply put, it’s the ability to target individuals based on what makes them themselves,” said Ari Bluman, SVP of North American sales and operations for 24/7 Real Media. “From a direct marketing perspective, obviously being in front of the right audience that buys a product or is moved by a message is essential,” he said…Mindset Media has identified 20 different elements of personality, which include assertiveness, openness, spontaneity and pragmatism…The goal is to create mass audiences of people who tend to have the same personality type, [Jim] Meyer [CEO and co-founder of Mindset Media] said.

Yahoo! merger or deal watch. privacy division: Yahoo! may expand behavioral targeting

All these privacy, data collection and marketplace competition issues will need sorting out. Yahoo is acquiring “Tensa Kft., more commonly known as IndexTools…IndexTools will add more insight and metrics for online campaigns…” One search column explains the significance of the deal is the “…huge benefit that Yahoo will have is the ability to put their pixels (data collection mechanism) around the web and hence collect data. Which, in turn, will help their Behavioral Targeting efforts, which are currently limited to Yahoo portal only. This is huge!!!

Services to protect advertisers online from appearing next to "inappropriate" broadband content emerge

TV networks and ad agencies have long had a system in place to make sure programming doesn’t conflict with the interests of its key audience: advertisers. Network standard and practices departments reviewed entertainment programming to make sure a marketer–or the network–wouldn’t be embarrassed by the theme or content. We are beginning to see such practices emerge for the online medium. For example, last year Feedburner [now owned by Google], the leading ad service company for blogs, began a service called “Adclimate” that “suppresses when an ad would be served in an RSS item or blog post containing keywords that an advertiser has pre-selected as inappropriate for their brand…FeedBurner’s AdClimate was developed to meet the needs of its advertisers in a rapidly developing market. This capability addresses advertisers’ apprehensions about their brands appearing within distributed media. Controlling ad targeting based on advertiser-selected keywords provides peace of mind and additional control.”

Now there are similar services for the burgeoning world of broadband video. ScanScout, for example, says it offers advertisers “brand protection.” The company asks: “How can advertisers be assured that their brand messages will only be seen adjacent to the most appropriate content?” That’s where “ScanScout’s Content Matching technology” comes in, because “[I]t ensures that the right ad is shown to the right user at the most opportune time.
Brand Protection: ScanScout technology is designed to ensure that advertisers’ brand messages will only be seen adjacent to the most appropriate content.”

ScanScout explains that (its emphasis) “rich content scanning is deeper and more precise than anything ever introduced, creating algorithmic intelligence about each video and each user’s behavior, enabling far better matching than ever imagined…”

Much is said about the important role of advertising supporting the diverse array of online content. And it’s true that we have tremendous content diversity and advertising plays a key role. But just as advertisers shaped radio, broadcast television and cable that helped undermine their public interest potential, we suggest that much more analysis and debate is needed to explore the ultimate impact of advertising on the future of the digital ecosystem.

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