My CDD is very pleased to have received a copy of this letter sent to the FTC and FDA by Consumers Union. It underscores how the issues around sensitive data and sensitive users are a critical part of consumer protection online. We are also pleased about the positive coverage our complaint has received from the press, including the New York Times, CBS/Moneywatch, and otherpublications.
December 1, 2010
Chairman Jon Leibowitz
Federal Trade Commission
600 Pennsylvania Avenue NW
Washington, DCÂ 20580
Dear Mr. Chairman:
Consumers Union, the independent, non-profit publisher of Consumer Reports, urges the Federal Trade Commission to accept the request of November 23, 2010 from several petitioners “to investigate unfair and deceptive advertising practices that consumers face as they seek health information and services online.â€
The very detailed 144-page filing is by the Center for Digital Democracy, U.S. PIRG, Consumer Watchdog, and the World Privacy Forum. Among the companies named in the complaint are Google, Yahoo, Microsoft, AOL, WebMD, Quality Health, Everyday Health, and Health Central. The complaint explains how non-traditional pharmaceutical advertising on the internet and elsewhere uses a wide range of tools and disguises to convince consumers to use various drug products. These advertisements frequently hide the fact that they are funded by the drug manufacturer and they often fail to give any hint of side effects or possible adverse events from use of the drugs.
We have not independently examined each of the documents cited in the complaint or the context in which they were used. But the documents are overwhelmingly explicit in their description of how to take information consumers would consider very private (the decision to type in a health-related word or phrase on a website) and consciously and unconsciously manipulate those consumers into the use of specific prescription drug products.
The mass of documents in the complaint are shocking in their totality and their implication for privacy and the use of pharmaceuticals with potentially dangerous side effects or questionable efficacies.
We urge the Commission to begin an immediate investigation pursuant to the requests in the complaint. Thank you for your consideration.
AOL also describes to Reps. Barton and Markey the way they use cookies that doesn’t reflect what they say to clients--such as “Target users based on attributes from user registration or third-party data (e.g. age, gender, income, kids)… Retarget users who visit your website… Target users within households using Experian’s statistical modeling based on hundreds of offline data elements that are most predictive for defining the specific audience of consumers.†For question 1, they refer to their privacy policy—something few consumers would read or understand. Nor does the privacy policy spell out how AOL collects and targets users, as they do for potential clients. See and compare to privacy policy. See how they offer targeting based on political information.
Question 2: They didn’t answer completely. They should have included information from here. And what their partners collect.
Question 3. They should have said they urge advertisers to use pixels, beacons and other tracking tools:   “Place pixels on all high-traffic pages… Target broadly… Most networks, including Advertising.com, look at IP or cookie data to determine if a user is part of a specific demographic or has demonstrated a particular online behavior, such as shopping for a car, browsing cooking sites, and so on. With user targeting, you reach those consumers directly, regardless of the sites they happen to be visiting.â€
And they say that the third party cookies don’t identify the “specific user.â€Â But that’s what AOL says it can target: “Target users within households… Retarget users who visit your website… Target users within households that demonstrate the highest propensity to buy certain products…â€
Question 7. They don’t say what they do. It’s monetizing all the data: “We monetize nearly 1.5 billion impressions per day on average.â€
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€
If George Orwell were writing today, 1984’s Winston Smith would be working as a “Doublespeak†specialist crafting privacy policies and creating self-regulatory regimes for the online ad industry. None of the replies provided to Reps. Markey and Barton answered the basic charge posed by the WSJ in its series and previously raised by privacy advocates: that “[O]ne of the fastest-growing businesses on the Internet is the business of spying on Internet users.â€Â  All the companies hide behind `it’s a business as we created it and good for everyone’ facade. Many use a scare tactic claiming that the data collection model they developed is responsible for funding online content/publishing and without it much/if not all of the Internet would vanish (as if you can’t have both robust e-commerce and privacy!). Many of the answers to Congress also say that their privacy policies and membership in self-regulatory groups (such as the NAI) reflect best practices (as if they automatically vanish the problems!). The companies don’t take responsibility for the problem or acknowledge that there are privacy concerns outstanding.Â
The responses reflect the Orwellian recasting of industry terms on the data collection practices it created and operates. Behavioral targeting (with $1.13 billion this year in spending for this type of ad) has been transformed into “preference,†“relevant,†or “interest†targeting. Online profiling and targeting is now called “customization.â€Â The industry is running away from the precise definitions they created and use because they are honest terms showing consumers are being tracked, profiled and targeted based on our behaviors and actions. Finally, several of the companies submitted their privacy policies.  In order to full understand them, a consumer (in between taking their children to school or a soccer game, working, shopping, cooking) would simultaneously also have to be a technologist, lawyer, and investigator, to understand and control all the cookies, etc.
Also, the companies resort to a now out-of-date definition of what’s considered so-called personally identifiable information (PII). Cookies, IP addresses, pixels and web bugs, they claim, are “non-PII†and hence fail to raise privacy concerns. Yet both the EU and FTC have said that in today’s online data collection world, the old definition of what’s identifiable no longer really works. The FTC explained last year that “[S]taff believes that, in the context of online behavioral advertising, the traditional notion of what constitutes PII versus non-PII is becoming less and less meaningful and should not, by itself, determine the protections provided for consumer data. Indeed, in this context, the Commission and other stakeholders have long recognized that both PII and non-PII raise privacy issues…
Companies such as Yahoo, AOL, About.com (NYTimes Co), News Corp/MySpace and others are disingenuous in their responses—failing to inform the Congress what they tell their clients and prospective advertisers. Among the most cynically self-serving is Yahoo. First, Yahoo did not describe all the ways it collects data on users when it answered question 1. For example, examine Yahoo’s Advertising Blog, where you can find a discussion of far-ranging techniques used in the data collection process. Most of which are not spelled out or really explained in the privacy policy; See also, Yahoo’s “smart ad†technology that changes the copy in real time based on the data it collects. Its privacy policy really doesn’t explain it in the same way it pitches itself to clients. Yahoo says in its Hill letter that it “may†acquire data from external sources and gives the link to that section of its privacy policy. Not even a multi-tasking genius could opt-out all of that. Nor does Yahoo tell you about the tons of data on consumers their partners collect.  Also, they say in question 3 how they collect data, but tell potential clients a more informed story: “Yahoo! gets to know its visitors to give them what they’re looking for, even when they’re not actively looking. In part, Yahoo! does this by using an industry practice called behavioral targeting (BT)… Yahoo! BT goes beyond common rules-based segmentation or grouping of consumers by the sites they’ve visited. The tool is powered by sophisticated modeling technology based on extensive online interactions that include searches, page views, and ad interactions. With these models, Yahoo! identifies what consumers are interested in and predicts where they are in the buying process, thereby determining which consumers may respond best to your ad placements.† In question 4-5, Yahoo claims its users have all the information they require via the privacy policy. But Yahoo’s information for perspective clients tells a more complete and different story: “With rich media, you benefit from deep reporting that goes way beyond the click. Track time spent watching video, mouse-over interactions, poll results, average number of panels interacted with and much more. If you design it, we can track it… Partner with Yahoo! to produce unique, immersive consumer experiences that integrate your brand…â€Question 9, again, they call it “customized experience†to Congress—and “smart ads†that track and learn about you when they explain it to advertisers.  Question 10. Health and finance. Yahoo failed to tell Congress they track and target consumers health and financial info. And they target teens. For health; finance.
Danah Boyd, like many other digital media researchers, fails to examine the business practices which shape and construct most of contemporary online media. Ms. Boyd is quoted in last week’s Boston Globe about the Children’s Online Privacy Protection Act saying “[I]t’s well-intentioned, but this legislation has failed on every level.” Ms. Boyd is incorrect.  A whole range of interactive ad practices and techniques commonly found on most digital sites has not been embraced by the under-13 online advertising market. The goal of COPPA was to help structure the commercial online data collection and targeting practices aimed at young people–and it’s done so (just see what kind of data collection and targeting practices occur the minute anyone reaches 13. From that age onwards, everyone is fair game for a wide range of very disturbing practices, most of which collect and use our information). Ms. Boyd and the Globe article are also incorrect claiming that “Congress is considering renewing” COPPA.  The FTC is currently conducting a periodic review of COPPA’s rules and the Congress has held hearings on the law. But Congress doesn’t have to “renew” COPPA.
Finally, a challenge to Ms. Boyd. She is working for Microsoft–which is targeting youth across the globe via its advertising division. Microsoft Advertising is collecting data and targeting teens for junk food and other products. See Microsoft’s “How to Target Young People Online” and other materials, for example. Ms. Boyd needs to analyze what her employer–and other financial backers from the online ad industry supporting Berkman–are doing regarding youth–and hold them and herself accountable.
In 1999, online marketers promised consumers they would protect their privacy. Leading interactive ad companies created the Network Advertising Initiative (NAI) as a scheme to head-off proposals by the FTC that would help regulate online profiling. Now it turns out, says the online ad industry, the NAI really couldn’t work. So they have developed yet another self-regulatory effort. Here’s what online marketers told Ad Week today: “The move marks the most significant regulation the industry has imposed on companies and goes significantly farther than the Network Advertising Initiative, which held third-party advertisers needed to allow consumers to opt out. Doing so, however, was a cumbersome process.“  So the industry didn’t tell the FTC or consumers that the NAI wasn’t consumer friendly and “cumbersome.” Yet they have used the NAI as a political bulwark to head-off consumer protection rules. Shame on them. Meanwhile, in the same story, it’s revealed that only now–as pressure mounts to protect online consumers—does the industry recognize protecting privacy is important: “The guys that drive the industry have figured out this privacy stuff does matter,” said Scott Meyer, CEO of Better Advertising Project, which will help companies comply with the requirements.
The new “aboutads.info” website established by the industry fails to provide consumers serious information about cookies and behavioral targeting and profiling. It reveals how little the industry is committed to protecting privacy and informing U.S. consumers about the process. To see how this new plan is really designed to protect the data collection business, examine the rules for sensitive information. Beyond the children’s privacy law (COPPA) we got enacted in 1998, this scheme permits full-scale collection and use of financial and health information.  Under the “new” self-reg policies, the narrowest of definitions for respecting your financial and health information has been created: “Entities should not collect and use financial account numbers, Social Security numbers, pharmaceutical prescriptions or medical records about a specific individual for OBA without Consent.”
Shame on them. Online marketers spent some $3 billion last year on online financial marketing and will spend $1 billion for pharma and health related targeting in 2010. Consumer data collected by online financial and health marketers, much of which is sensitive and personal, is ok under the industry’s “new” plan.
PS: The folks at Better Advertising need to take a course in online marketing–and change its new website so it really informs consumers about the process. What it has now would get a C-minus in any class on online marketing. They can start with 360 degree targeting, online and offline profiling, rich media, a serious description of online auctions, the tracking process, work on “engagement” and neuromarketing,” social media marketing, etc. Consumers deserve better.
To help undermine the impact of the forthcoming FTC proposal to protect consumer privacy, a coalition of online ad lobby groups will unveil yet another self-regulation plan. According to Mediapost, online consumers will soon see “[I]cons to signify behavioral advertising — or serving ads based on people’s Web activity.” Since 1999, online ad groups have rolled out self-regulatory regimes promising to protect consumers online. Each has failed to do so.  This new effort involves the very same groups and companies that offered self-regulatory promises in the past.  For example, see the World Privacy Forum’s report on the failure of the Network Advertising Initiative’s self-reg schemes; that group is part of the new effort, btw.
This new effort is seriously flawed–and before marketers and advertisers adopt it, it must be independently evaluated by consumer groups, independent academics, and the FTC. We believe that the system will fail to protect consumers–because it will not candidly inform them about how the data is collected and used. Meanwhile, in a revealing flip-flip, the IAB’s UK counterpart deep-sixed its just released safeguard on retargeting. According to a new report, “[O]nline advertising trade body the Interactive Advertising Bureau (IAB) has withdrawn a code of practice which recommended that behavioural advertising retargeting cookies should expire after 48 hours. The IAB’s Affiliate Marketing Council (AMC) published the code last week. It applied to the practice of ‘retargeting’ web users who had visited a site with ads for that site on other people’s websites, using cookies to track their movements and activities…That code has been withdrawn and will be reworked after further industry consultation, though, the IAB said. The code has disappeared from the IAB’s website.”
Consumers and citizens require real safeguards governed by law and regulation–not flimsy digital promises designed to sanction ever-expanding data collection practices.
For years, we have explained that the Internet’s future has been tied to the TV and advertising business models of the past. So it’s not surprising that this week comScore announced that “digital overnights” are now part of its service offerings for marketers and advertisers. In a release, they explain that its “new service features several groundbreaking enhancements for digital media planning and optimization, including the availability of digital GRP “overnights,†campaign reporting across global markets, verification of ad delivery by audience and geography, and detailed campaign analysis by creative and placement strategy…By offering views of digital performance that have long been the standard in the TV business, any buyer should be supremely confident about allocating dollars to the platform where the most valuable attention can be found.â€
Nielsen also added ratings for online programming to its product offerings, as part of the move to measure and track users across all platforms, including mobile. As its release noted: “marketers and media companies alike will now have a simpler way to measure the combined reach of TV, the web and even mobile advertising…Nielsen will be able to provide reach, frequency and Gross Rating Point (GRP) measures for online advertising campaigns of nearly any size, running nearly anywhere on the web. Campaign reporting will be available within just days after the launch of a campaign, providing vital delivery information in-flight to both advertisers and publishers.”  Facebook, which is partnering with Nielsen to help expand its big brand ad selling business, enthusiastically endorsed the new product: “More and more marketers are creating integrated, cross-platform campaigns and we need a better way to measure how they perform,†said Mike Murphy, Vice President, Global Sales, Facebook. “We think creative campaigns are more effective when marketers combine TV and digital in a way that extends the big idea online and makes it social through an ongoing, two-way connection. With their expertise, Nielsen can help marketers measure the impact of true cross-platform campaigns.â€
Google tells users, policymakers and reporters that its “ad preference manager” is an effective consumer tool that addresses behavioral marketing. But on its Doubleclick Ad Exchange, advertisers can use Google provided tools to target online consumers based on a wide range of product and issue “vertical” categories, including health and finance. Here’s what Google says advertisers can target in the health and financial area. Ask yourself. Did you know this and shouldn’t all this be truly transparent, under full user control, with real safeguards about how such information can be obtained and used? We do. Google isn’t the only one doing this, of course: Doubleclick Category Targeting Codes: category::Finance
category::Finance>Accounting & Auditing
category::Finance>Accounting & Auditing>Tax Preparation & Planning
category::Finance>Banking
category::Finance>Credit & Lending
category::Finance>Credit & Lending>Auto Financing
category::Finance>Credit & Lending>College Financing
category::Finance>Credit & Lending>Credit Cards
category::Finance>Credit & Lending>Debt Management
category::Finance>Credit & Lending>Home Financing
category::Finance>Currencies & Foreign Exchange
category::Finance>Financial Planning
category::Finance>Grants & Financial Assistance
category::Finance>Insurance
category::Finance>Insurance>Auto Insurance
category::Finance>Insurance>Health Insurance
category::Finance>Insurance>Home Insurance
category::Finance>Investing
category::Finance>Investing>Commodities & Futures Trading
category::Finance>Retirement & Pension
My CDD and USPIRG asked the FTC in January 2009 to investigate mobile marketing and its threat to both privacy and consumer protection issues (Ringleader Digital, now the subject of lawsuits and stories in the WSJ and NYT, was included in the complaint, btw). Online mobile marketers, including Microsoft and Google, illustrate how regulators in the U.S. and abroad should require safeguards to protect the public from unfair and deceptive practices–including those that involve their privacy. In Ad Age, both Google and Microsoft loudly proclaim what their mobile marketing services can do for brands, ads and marketers. Here are some choice excerpts:
Microsoft: “Microsoft Advertising’s industry-leading mobile display and search advertising solutions engage more than 43 million on-the-go U.S. consumers each month—regardless of a user’s mobile phone or wireless carrier. Its innovative ad placements and ad formats include display, rich media, search, video and custom in-app ad units…
Advanced Targeting Options
Profile targeting: age, gender, household income, location, time of day
Behavioral targeting: more than 120 custom segments (e.g., “movie watchers” and “business travelers”)
Device: make and model
Wireless carriers: on-deck inventory
Keyword targeting: exact or broad match…Complete mobile ad solutions for automotive, CPG, entertainment, financial services, retail, technology, telecommunications, travel and other sectors…
More than 43 million, or 55 percent of active mobile web users in U.S.
More than 80 million active mobile users globally in 32 countries.”
Google: “Today’s consumers are on the move. More than ever before, audiences are searching and browsing the web on their mobile devices. How do advertisers connect with the on-the-go consumer…As customers go mobile, advertisers need smart mobile advertising strategies. With Google, they can easily target and tailor messages according to location and automatically show their customers relevant local business information or phone numbers to enable them to take immediate action. Once a campaign is up and running, marketers can measure their results via detailed reports. Additionally, integrated mobile reporting in Google Analytics allows them to track and optimize conversion, e-commerce and engagement metrics on mobile devices. They can take advantage of Google’s mobile-specific ad formats. Click-to-call text ads, animated mobile banner ads, click-to-download ads and other display ad formats are examples of how Google is innovating for the small screen. Google closed its acquisition of AdMob, one of the world’s leading mobile advertising networks, in May. AdMob’s innovative rich media ad units—including full-screen expandable, animated banner and interactive video—create opportunities for advertisers to engage with a relevant audience on their mobile devices. Now the Google and AdMob teams are working to create new ways to deliver engaging and innovative advertising experiences that will help marketers drive their businesses forward…
CASE STUDY
CHALLENGE: Esurance, a direct-to-consumer personal car insurance company, wanted to ensure that customers could do business with it on their own terms and at their own convenience… To make the connection between mobile users and Esurance agents, Esurance used Google mobile ads with integrated click-to-call functionality. The CTC ads gave mobile users the option of clicking through to Esurance’s mobile-optimized landing page or initiating a phone call with a licensed insurance agent…Results…
Boosted conversion rates: Click-to-call mobile ads drove a 30 percent to 35 percent higher response.”
PS: Attention Music Lovers. In the same Ad Age piece, the online music service Pandora exclaims that it can provide:“Through powerful hypertargeting, reach the right person, at the right time, without waste. Target based on age, day, gender, location, mobile platform, time and type of music…Pandora offers a broad array of formats and rich media functions to create an immersive mobile experience, including: