Category: interactive advertising

For Sale on Ebay: Your Online Privacy

eBay is working with behavioral targeting technologies, including a test “retargeting” users (that means electronically shadowing) as they visit AOL, MSN, clients of Yahoo’s RightMedia ad exchange and other sites (eBay has contracted with AOL’s Tacoda subsidiary, a behavioral targeting specialist). According to Behavioral Insider, eBay is using “a member’s on-site history to target relevant ads by its many Power Sellers.” As the publication explains, “[T]he world’s biggest online auction house knows a lot about its users’ bidding, browsing and buying habits, and now eBay is leveraging this knowledge in behavioral ad targeting both on and off the site.”

How is eBay tracking users? Here’s what Kasey Chappelle, director of eBay’s marketplace division, told the Insider: “Some of the things we are doing off-eBay involve retargeting where you are traveling to a site after being to eBay and we place an eBay ad there that is going to change depending on what you have done in the past on an eBay site.” eBay’s Scott Shipman explained that the kind of data used to track and target you includes… “category type of data, bidding data, the types of items you may be bidding on or browsing on within the eBay system… What we know about are items you are bidding and browsing and listing and selling in certain categories, so we can pass that information into a profile. When you are out on the Internet and are about to see an eBay ad we can associate that affinity with the ad.”

This, of course, raises serious personal privacy concerns. But while eBay is proclaiming that it’s protecting your privacy—it’s not really in our opinion. That’s because Ebay’s new so-called “AdChoice” privacy scheme is an opt-out service. According to the news report, one can “opt-out” of the system if eBay customers click on various links that then send them “directly to a page that lets then [sic] state a preference whether they want their eBay data used to target that ad to them.”

Here’s how eBay’s Shipman, who serves as its senior counsel, global privacy practice, explains it: “The eBay page explains the AdChoice program, that we care about your information and how you are targeted and marketed to. And if you would prefer that we don’t use your information to target ads to you, you can tell us that you would prefer a generic ad and not have ads targeted to you. And you opt out immediately.”

We placed a call to Mr. Shipman early yesterday, seeking an explanation of the opt-out scheme. But he did not return the call as of this posting.

eBay has been one of the leading companies promoting network neutrality–an open Internet. Protecting privacy is a key component of such an open and democratically-run online medium. Privacy shouldn’t be for sale–even on eBay.

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Role of Interactive Advertising & the Subprime Scandal: Another wake-up call for FTC

Yesterday’s Financial Times has an important story which should trigger an investigation into how the online marketing industry has faciliatated the selling of subprime mortgages and other credit. The online ad industry–including search engines and publishers–have to begin to act more responsibly. It’s time for real public policies by the FTC and Congress to protect consumers. Here’s an excerpt from Richard Waters FT piece:

“Internet companies are bracing for a possible fall-off in one of their biggest sources of advertising following the meltdown in the subprime mortgage market…Pricing could also be hurt more broadly on some classes of advertising on web search engines, because fewer advertisers are expected to be competing in the advertising auctions run by companies such as Google to have their messages displayed next to specific keywords.

“A lot of the subprime [advertising] has gone away,” said David Jakubowski, general manager of Microsoft’s MSN service.

This loss had yet to have a broader effect in the search business, he added…

Many online companies depend for a disproportionate amount of their income on financial services advertising, with subprime in some cases accounting for a large part of it.

Sixteen per cent of all online advertising comes from financial services companies, making it the second biggest source of advertising behind the retailing sector…

Companies that lent to subprime borrowers relied heavily on the internet to attract customers, concentrating the effect of the meltdown…According to data from Nielsen/NetRatings, mortgage lenders Countrywide and Low Rate Source were two of the 10 biggest online advertisers in the US in July.”

Take a look as well at this very interesting ZDNet Aug. 16th online column by Dan Farber and Larry Dignan (excerpt):

onlineads.png

The top spender on advertising is a mortgage referral company Low Rate Source (woops). The third ranked company is credit rating firm Experian (may actually do better because if your credit rating isn’t pristine you’re not getting a mortgage). And the fourth ranked advertiser was Countrywide Financial, which just tapped its credit line because mortgage liquidity is drying up. Countrywide is a lock to cut spending and its online advertising budget. And you can’t peruse Yahoo Finance or Google Finance without getting a mortgage pitch somewhere.

InterActive Corp. is the fifth ranked advertiser and it’s a safe to bet that some of that advertising directs folks to LendingTree, which also refers folks to lenders…Meanwhile, there are a lot of keywords being bought by those aforementioned companies. Watch the language from Google, Microsoft or Yahoo to monitor the fallout.”

And when Congress, the FTC or state attorneys-general begin investigating, it may be useful to consider this, courtesy of MediaPost’s Marketing Daily:

“A recent article by Patricia A. McCoy in the Harvard Journal on Legislation, titled “Rethinking Disclosure in a World of Risk-Based Pricing,” found that “numerous subprime ads are tantamount to affirmative misrepresentations.”

Specifically, McCoy found two main areas of advertising deception under the terms of the Truth in Lending Act. First, “TILA allows sub-prime lenders to tout their best rates, without disclaimers and regardless of the fact that numerous sub-prime customers will not qualify for those rates.” Second, TILA also “permits lenders to dangle alluring teaser rates before consumers without notifying them how high their interest rates might go following rate reset.”

In effect, she adds, this means that “sub-prime lenders can entice customers with rosy prices that are not available to weaker borrowers, hike the price after customers pay a hefty application fee, then raise the price again at closing.”

Murdoch’s MySpace expands data collection/ad targeting, including on whether users say they smoke, drink, religious beliefs, etc.

The powerful commercial forces shaping new media platforms like MySpace–so they can better reap big dollars from powerful brand advertisers– should raise user alarm bells. MySpace is going to [our italics] “leverage the data input by each MySpace user into their profile from a group of predefined menu choices (related to questions such as drinker, children, education, smoker, religion, college, employer, etc). Within the next year, MySpace will be able to target ads based on what users write and place on their Myspace page itself, such as what TV shows members like to watch or music they listen to. Aside from focusing on members’ login pages, the ad targeting will be used across all of the MySpace-programmed, “safe” advertising sections, such as the Music homepage and MySpaceTV.” That’s according to a 8/24 report from paidcontent.org

On August 17th, Coca Cola also paid $1 million to “have its logo splashed across the entire home page of the Fox Interactive Media social net for the entire day.”

Such news follows last week’s report from the Wall Street Journal on Facebook’s plans to expand the role of advertising and targeted marketing as well. Much more work needs to be done to create social networks where marketing is done responsibly in terms of privacy, environmental sustainability, and with the focus on revenues serving community interests.

Meanwhile, the Federal Trade Commission should open up an investigation. It’s additional evidence that the agency has to swiftly act to protect consumers, including youth. The upcoming town hall on online marketing and data collection–done in response to a complaint filed by this blogger’s group and USPIRG–is insufficient. What will it take for the FTC to be proactive in this area? Congress should hold hearings on how well the agency is truly addressing the ever-growing threats to online privacy from interactive marketing, including its impact on the public health.

PS: Just a reminder about what a former Fox Interactive president said about MySpace, according to trade reports: the “digital gold inside of MySpace wasn’t the number of users, but the information they’re providing, structured and unstructured data” …

PPS: More on what to expect from profile-based targeting via MySpace [excerpt from 8/7/07 Mike Barrett interview] :”By October or November we’ll have broken these 11 segments into 100 segments. So you can target people who are not just interested in beauty, but makeup. Or people not just interested in travel, but safari travel. Being able to break down the segments even more finely will add more value to marketers.”

Social Relationship data collection and targeting [via imediaconnection]: “Conventional wisdom says that MySpace and Facebook are powerful because of their massive reach and addictive usage. While true, they are in fact even more powerful because they are able to add significant layers of data to make their advertising more relevant. Indeed, very few properties other than social networks collect the various layers of data necessary to provide true relevance. Social networks have the potential to serve advertisements based on a user’s age, sex, interest, relationship data, and with some modifications, they could add the rest of the data as well.”

The imediaconnection piece says that social network marketers can define relationship data by asking itself: “What do we know about the user’s friends that can enable us to better target the advertising.”

When Do Google, Washington Post, Time Warner, Disney, Microsoft, Cox et al. work together lobbying? As they help IAB make the U.S safe for Internet Advertising practices

The Interactive Advertising Bureau (IAB) has stepped up its efforts as a lobbying force in D.C. The group wants to make sure we don’t have laws and regulations which would meaningfully protect the public, including consumers. Here’s how the IAB describes its “Public Policy Council” (one of the groups many standing councils and committees):

“Proactively lobby Congress and Federal Administrative agencies on privacy issues, with a focus on educating key decision-makers on the importance of the interactive advertising industry. 2. Help craft meaningful legislative proposals that protect consumers’ privacy interests without unduly burdening legitimate interactive advertising practices. 3. Engage the Federal Trade Commission to influence future enforcement proceedings, potential rulemakings, and public workshops on issues central to the interactive advertising industry.”

Here is their mission statement and a list of the policy council members:

Mission

Lead the advocacy efforts of IAB’s membership as they engage all levels of government on key policy issues in order to ensure continued growth of the industry.

Committee Leadership
  • Dave Morgan, Tacoda, Chair
Committee Participants
  • Alan Davidson, Google, Inc.
  • Alan Roth, Zango
  • Alexandra Wilson, Cox Newspapers, Inc.
  • Alissa Kaplan, 24/7 Real Media, Inc.
  • Andrew Moskowitz, Vizi Media
  • Anne Lucey, CBS Digital Media
  • Bennet Kelley, ValueClick Media
  • Bennett Zucker, Right Media Inc.
  • Bill Bailey, Walt Disney Internet Group
  • Bob Filice, Blue Lithium
  • Brad Aaron, Q Interactive
  • Brent Thompson, IAC Media & Advertising
  • Brooks Dobbs, DoubleClick, Inc.
  • Bryce Harlow, CBS Digital Media
  • Caroline Little, Washingtonpost.Newsweek Interactive
  • Charles Curran, AOL
  • Chris Kelly, Facebook
  • Chris Lin, comScore
  • Cliff Harris, Cablevision Advanced Systems
  • Colin Johnson, Motive Interactive Inc
  • Craig Spiezle, MSN (Microsoft Digital Advertising Solutions)
  • Dan O’Connell, WeatherBug
  • Danny Choriki, ADTECH US, Inc.
  • David Cancel, Compete, Inc.
  • David Green, NBC Universal Digital Media
  • David Payne, CNN.com
  • Diane McDade, MSN (Microsoft Digital Advertising Solutions)
  • Don Mathis, Azoogle Ads, Inc.
  • Erin Miranda, Weather Channel Interactive (Weather.com)
  • Frank Torres, MSN (Microsoft Digital Advertising Solutions)
  • George Pappachen, Dynamic Logic
  • Greg Berretta, Zango
  • Gregg Pendola, Walt Disney Internet Group
  • Henry Goldstein, CNET Networks, Inc.
  • Hillary Smith, Right Media Inc.
  • Ho Shin, Advertising.com
  • Jeff Long, Revolution Health Group
  • Joey Lesesne, Cox Newspapers, Inc.
  • John Barabino, Google, Inc.
  • John Hopkins, WebMD
  • John Orlando, CBS Digital Media
  • John Wilk, WorldNow
  • Jonathan Meyers, Forbes.com
  • Josh Brown, CBS Digital Media
  • Jules Polonetsky, AOL
  • Karl Gallant, ValueClick, Inc.
  • Ken Levin, Edmunds.com
  • Ken McGraw, Zango
  • Laura O’Daly, iVillage, Inc
  • Lesley Grossblatt, I/PRO
  • Leslie Dunlap, Yahoo!, Inc.
  • Linda Chan, SourceForge Inc.
  • Linda Schoemaker, aQuantive, Inc.
  • Lisa Anderson, AOL
  • Louis Hengen, Tacoda
  • Marilyn Cade, AT&T
  • Mary Berk, MSN (Microsoft Digital Advertising Solutions)
  • Matt Kaminer, WebMD
  • Matthew Stern, Musicloads
  • Melissa DeVita, MediaFLO USA, Inc.
  • Michael Drobac, Ask, Inc
  • Pablo Chavez, Google, Inc.
  • Pesach Lattin, Vizi Media
  • Phil Stelter, Range Online Media, Inc.
  • Richard Bates, Walt Disney Internet Group
  • Rick Lane, News. Corp
  • Robert Gratchner, Atlas Solutions
  • Sarah Deutsch, Idearc Media Corp.’s SuperPages.com
  • Shayne Bryant, Idearc Media Corp.’s SuperPages.com
  • Shayne Wiley, Yahoo!, Inc.
  • Sheri McGaughy, Weather Channel Interactive (Weather.com)
  • Sherrese Smith, Washingtonpost.Newsweek Interactive
  • Steve Emmert, LexisNexis Martindale-Hubbell
  • Susan Fox, Walt Disney Internet Group
  • Tom Bartel, Return Path
  • Tom Beck, Enlighten

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Facebook’s new Digital Ad Plan: FTC Needs to Act Now!

Today’s Wall Street Journal story on Facebook’s plans to expand one-to-one interactive ad targeting is just the latest example of the growing threats to personal privacy online [“Facebook Gets Personal With Ad Targeting Plan.” Vauhini Vara. Aug. 23, 2007. sub. required]. The story notes [my italics] that “Facebook Inc. is quietly working on a new advertising system that would let marketers target users with ads based on the massive amounts of information people reveal on the site about themselves. Eventually, it hopes to refine the system to allow it to predict what products and services users might be interested in even before they have specifically mentioned an area.

As the industry watches the Palo Alto, Calif., start-up to see if it can translate its popularity into bigger profits, Facebook has made the new ad plan its top priority…”

Online marketers such as Facebook and so many others want to harvest the ever-flowing rich vein of personal/ behavioral-related info flowing over websites–our friends, interests, media consumption and buying habits, etc.–all so we can be targeted by precision multimedia marketing techniques. The FTC’s recently announced “town hall” meeting about online marketing and privacy–spurred principally by this blogger’s group and US PIRG with our 11/06 complaint–is a completely inadequate response to the problem. Frankly, the FTC cannot act as if they are clueless here, or suggest that the town meeting is part of an intense analysis. The problems are glaring and evident, as we’ve been making clear to the FTC for almost one-year now. It’s time for major policy action to protect the public from unscrupulous marketing techniques designed to invade our privacy and manipulate our behaviors. Facebook should be a wake-up call to the folks at 600 Pennsylvania Ave. and the Hill. If we can’t especially protect Facebook’s young users, (as well as with other social networking sites) it reveals how inadequate our governmental watchdogs are.

PS: It’s worth watching this Ad Age video on how marketers are flocking to Facebook. But a sub. may be required.

Latest stats on Facebook, via MediaPost:”

Facebook has grown three times as fast as MySpace in the past year, according to Nielsen//NetRatings. Seeing a massive influx of first-timers, Facebook U.S. visitor numbers reached 26.6 million in May–up a full 89% year-over-year and 3.6 million more than in April, according to comScore.  Worldwide, comScore reported, Facebook reached 47.2 million visitors in May–8.4 million more than in April, and with an average of 20.6 visits per user.”

PPS! Yesterday, the Financial Times had an important story about the CIA using Facebook and other sites to target their recruiting. Here’s an excerpt [my italics]: “Underscoring the power of social-networking sites, the Central Intelligence Agency recently used Facebook to help boost applications for the national clandestine service. The move sparked concerns that the CIA was monitoring members, which the agency denies.

”Earlier this year, the CIA used Facebook – an excellent peer-to-peer marketing tool – to advertise employment opportunities with the agency,” said George Little, a CIA spokesman. “This effort, part of a much broader campaign leveraging traditional and new advertising media, was used strictly for informational purposes.” [source: US launches ‘MySpace for spies’. Demetri Sevastopulo. FT. Aug 21, 2007. ]

New York Times Co. & Behavioral Targeting: When will the paper really cover the privacy and related threats?

The New York Times Co. has long been a leader in the online advertising field. But it has consistently failed to cover/meaningfully report on the implications of what it has been doing and intends to now do. The emergence of online advertising is one of the most important stories affecting our society, in my opinion. More than privacy is at stake, although that issue should be at the forefront of our concerns. We have spoken to reporters and others at the Times about the lack of coverage. We believe that there is a major problem at the paper seriously examining this issue (which, frankly, the paper shares with other major news organizations that also use behavioral targeting technologies, including USA Today and the Wall Street Journal). As we have stated before, the Times Co. is also on the executive committee of the board running the key online advertising issue trade lobbying group working to protect the industry from criticism and policy safeguards.

Yesterday, the New York Times Co. announced a partnership with behavioral targeting firm Revenue Science. The release from Revenue Science explained that: “Revenue Science, Inc., offering the most widely adopted, powerful, and flexible targeting platform for digital media, today announced that The New York Times Company (NYSE: NYT) has selected the company to provide its best-in-class behavioral targeting capabilities for NYTimes.com, About.com and IHT.com.

The addition of The New York Times Company increases Revenue Science’s roster of leading media brands, which includes the Wall Street Journal Online, FT.com, Nikkei Net and Reuters. Revenue Science’s ability to reach high-value audiences makes it the industry’s premier targeting provider.”

Here’s what Revenue Science says it provides its clients. Tell me, after reading it and other information on its website. Don’t you think it cries out for a very serious story, with continued follow-up? There also must be consistent disclosure from the Times and its news outlets as it covers the online ad industry that they are both politically and financially involved with the issue.
From Behavorial Science (excerpt): As a Revenue Science advertiser, you can take advantage of our Revenue Science Targeting Marketplaceâ„¢ with our Audience Connectâ„¢ solution. Audience Connect enables you to find key audiences for your message across thousands of sites in the Revenue Science Targeting Marketplace, using any of these proprietary targeting techniques:

  • Search Re-Targeting™—You spend a large part of your budget driving search traffic to your site. Once they get there, are they staying? How valuable would it be to reach them again? Now you can find out.
  • Re-Targeting™—Use sophisticated re-targeting technology to move your prospects through the buying cycle.
  • Reach—Segment and qualify people based on interests, behaviors, workplace attributes, geography, and results.
  • Behavioral Segments—
    • Revenue Science Behavioral Segments
      Revenue Science Segments enable advertisers to reach high-quality audiences across the Revenue Science network. Revenue Science provides marketers with access to hundreds of distinct behaviors within each segment. Our industry-leading targeting platform identifies the specific behaviors that best achieve your campaign goals and optimizes your campaigns to use only the strongest-performing behaviors. We offer segments in automotive, travel, technology and finance to name a few.”

Google & Doubleclick: Merging the No 1. Video Platforms

It’s important to follow the online ad marketplace for video-based advertising. Note what a Doubleclick top exec said in a ClickZ interview: ” We claim we do the most video on the Internet.” The same exec also said that “[A]ccording to all the figures, as far as we can tell, we’re the second largest rich media vendor.”

Of course, Google’s YouTube is the number one online video brand as well [a Google rep. is quoted saying that it’s now the eight largest website]. As YouTube explains, it is “the world’s largest online video community allowing millions of people to discover, watch and share originally created videos. YouTube… acts as a distribution platform for original content creators and advertisers large and small.”

In other words, the merging of Google with Doubleclick will create an online video and search advertising and marketing powerhouse–one which threatens both competition and privacy (among other issues).

excerpt:
A Multi-Party System or a Monopoly

While Google looks at spending potentially $4.6 billion on the wireless auction, it has another multi-billion dollar matter it would like to have settled. That, of course, is its acquisition of DoubleClick. Announced in April, the deal has been met with significant backlash and questioning from all corners. Currently the deal awaits Federal Trade Commission approval. At stake is potential control of the Web advertising ecosystem. A marriage of Google & DoubleClick creates a clear pecking order for all advertising online — an order that would once again put Yahoo and Microsoft in a trailing position…To date, Google employees have out-contributed Microsoft employees toward the 2008 presidential candidates — a stark contrast to the 10:1 contribution margin that existed in 2006…As Google tries to rewrite the rules on how advertising is done and expands its reach into all spectrums of communications, the importance of Washington will only grow. Over the past two years Google has grown its Washington lobbyists base from 0 to 12 (a sizable number for a technology company), hosted four 2008 presidential candidates on its campus (three Dems, one Republican) and established its own political action committee that has already out-raised its 2006 total.”

from: “The Next President: Sponsored by Google.” Chris Copeland. Search Insider. August 10, 2007.

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CDT’s Privacy “Report”—Full Disclosure is Missing

CDT has long been an ally of the various data collection companies it purports to oversee on behalf of consumers. It’s funded by a number of them. In fact Microsoft’s Bill Gates helped raise money for the group just last March.

The report released today fails to address the wide-ranging privacy threat coming from the major search engines and their advertising clients. It fails to acknowledge that it’s only because of policy-related pressure from privacy advocates—including the FTC complaint filed last November by my Center for Digital Democracy and US PIRG—that there have been modest corporate changes. [As well as the work of these two groups and EPIC in the case of Google’s proposed merger with Doubleclick, and the role of European Commission authorities]. CDT’s report also fails to acknowledge that it’s because of the unprecedented series of mergers in the data collection sector over the last few months, including Google, Microsoft, Yahoo!, AOL [$33.4 billion in the first half of 2007 alone, according to Ad Age. sub may be required.] —and the subsequent US and international regulatory scrutiny—that has created the “pressure” to bring about a few modest changes in data collection and retention practices. Without real advocates pressing—and regulators taking up their demands—we would have no changes at all (as minimal as they are). The marketplace’s approach isn’t protecting consumers.

Most troubling is that CDT fails to acknowledge that the widespread and evolving role of interactive advertising practices by these companies—including behavioral targeting, “rich” immersive media, and virtual reality formats—pose a serious threat to privacy and personal autonomy. It is not just the “bad” actors that require federal legislation, as CDT’s report suggests. If all Americans are to be protected online, the entire industry must be governed by federal policies designed to ensure privacy and consumer protection.

Here is a comment from my colleague Jennifer Harris: “When a group – with as close ties to the industry as CDT has – calls for government oversight, it is necessary to recognize just how much slack the online advertising and marketing industry has been given with our personal information. The main point is that consumers are at risk; updated federal consumer protection policies are essential to an environment that increasingly uses personal data as its commodity.”

Yesterday, the FTC sent out a release announcing its November town meeting on online advertising and privacy. The hearing is in response to the formal complaint my group Center for Digital Democracy and the USPIRG filed last November.

It’s clear that the FTC is fearful of really tackling the privacy and consumer-manipulation problems intrinsic to the online ad field. Behavioral targeting, which we also address in our complaint, is just the tip of the proverbial data collection and target marketing iceberg. Policymakers at the FTC, the Congress, and state A-G’s must do a better job in addressing this problem. Chapter seven of my book covers the topic, along with recommendations. As we noted in our statement yesterday, CDD has given the staff at the FTC a ton of material since November, further making the case for immediate federal safeguards. There is so much at stake regarding the future of our (global) democratic culture and its relationship to online marketing. We hope others will join with us and raise the larger societal issues, in addition to the specific online ad marketplace concerns.

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