Category: Yahoo!

Behavioral Targeters Use Our Online Data to Track Our Actions and, They Say, to “Automate Serendipity.” Attention: FTC, Congress, EU, State AG’s, and Everyone Else Who Cares About Consumer Welfare (let alone issues related to public health and ethics!)

NPR’s On the Media co-host and Ad Age columnist Bob Garfield provides policymakers and advocates with an arsenal of new material that support the passage of digital age consumer protection laws. In his Ad Age essay [“Your Data With Destiny.” sub required], Garfield has this incredibly revealing–and disturbing–quote from behavioral targeting industry leader Dave Morgan (Tacoda) [our emphasis]:

“Now we have the ability to automate serendipity,” says Dave Morgan, founder of Tacoda, the behavioral-marketing firm sold to AOL in 2007 for a reported $275 million. “Consumers may know things they think they want, but they don’t know for sure what they might want.”

Garfield writes that “In 2006 Tacoda did a project for Panasonic in which it scrutinized the online behavior of millions of internet users — not a sample of 1,200 subjects to project a result against the whole population within a statistical margin of error; this was actual millions. Then it broke down that population’s surfing behavior according to 400-some criteria: media choices, last site visited, search terms, etc. It then ranked all of those behaviors according to correlation with flat-screen-TV purchase…“We no longer have to rely on old cultural prophecies as to who is the right consumer for the right message,” Morgan says. “It no longer has to be microsample-based [à la Nielsen or Simmons]. We now have [total-population] data, and that changes everything. With [those] data, you can know essentially everything. You can find out all the things that are nonintuitive or counterintuitive that are excellent predictors. … There’s a lot of power in that.”

There’s more in the piece, including what eBay is doing. As the annual Advertising Week fest begins in New York, we hope the leaders of the ad industry will take time to reflect on what they are creating. You cannot have a largely invisible system which tracks and analyzes our online and interactive behaviors and relationships, and then engages in all manner of stealth efforts to get individuals (including adolescents and kids) to act, think or feel in some desired way. Such a system requires rules which make the transaction entirely transparent and controlled by the individual. The ad industry must show some responsibility here.

World Association of Newspapers Tells DoJ What CDD Has Been Saying: Google/Yahoo Combo Deal Threat to Newspapers and Online Content Diversity

Last July, my CDD wrote to the Department of Justice Antitrust Division raising a number of concerns about the proposed consolidation between Google and Yahoo! In particular, we were concerned about the impact the deal melding together the two leading online ad companies for newspapers would have on that imperiled business. Now, the World Association of Newspapers has issued a statement opposing the deal, citing many of the same issues. Here’s a link and the first few graphs of their important communique:

For over 60 years, the World Association of Newspapers [W.A.N.] has vigorously defended the freedom of the press. From its beginning, W.A.N. has recognized that newspaper journalism can be truly free only if newspaper publishers are economically independent. This means having the freedom to decide what news to publish, where to publish it, and the ability to build sustainably profitable businesses around it. As newspaper publishers endeavor to adapt to the Internet, their independence increasingly hinges on their ability to monetize news through online advertising.

  

In this pursuit, one company – Google – has emerged as the significant market power in online advertising. Google has built a very impressive business in 10 years, generating billions of dollars by indexing and linking to online content, then profiting from it through Google’s own ads. However, of the very impressive $48 billion in online advertising revenue that Google has amassed since 2001, less than one third of that has been returned to online publishers (1), and a much tinier fraction has benefitted the news and content generation industries. As such, most publishers are acutely aware that Google’s ever-tightening grip on internet traffic, its unbridled use of online content, and its dominance in online advertising poses a very real threat to the continued viability of the independent content generation industry.

It should be pointed out that most of W.A.N.’s 18,000 newspaper title members are, in fact, regular customers of Google (and to a lesser extent, Yahoo). These publishers depend on Google (and Yahoo) for a significant portion of their online advertising revenue and rely on each company’s respective search engines (both their paid search ads and their natural search results) to drive traffic to their websites. To date, competition between both these two search companies has provided a necessary check to any potential market abuses, and has helped to ensure that publishers and content generators are capable of earning an equitable and fair return on their content.

It is in that context that W.A.N. believes that the competition that currently exists between Google and Yahoo is absolutely essential to ensuring that our member titles receive competitive returns for online advertising on their sites, and for obtaining competitive prices when they purchase paid search advertising. In our view, the proposed advertising deal between Google and Yahoo would seriously weaken that competition, resulting in less revenues and higher prices for our members. W.A.N. is also concerned that this deal would give Google unwarranted market power over important segments of online advertising.

While Google and Yahoo have stated that their proposed agreement is limited in scope to North America, W.A.N. believes it will have a significant and adverse effect on all newspaper publishers worldwide, as it could have the potential of reducing the incentive for Yahoo to vigorously compete against Google across the globe.

Behavioral Targeting: A “Guide” from Yahoo!

Here’s an excerpt from a Yahoo! description of its behavioural targeting capabilities,via its UK site:

“What is behavioural targeting? Online has always been able to offer varied targeting opportunities, such as demographic, geographic and interest targeting, based on a user’s claimed interest and activity at one specific point in time. However behaviourial targeting goes one step further. Behaviourial targeting is different in that it allows advertisers to deliver specific targeted ads to consumers interested in a product, when they are close to the point of purchase, by leveraging actual online user behaviour. Even better, because the ad is served to a person based upon relevancy, it can be on a page that’s not directly related to the product…

Behavioural targeting anonymously follows someone’s interests, patterns and behaviours so you can speak to them knowing they want to be spoken to, which means less campaign wastage. This can be done by monitoring a number of consumer actions including:

> Search terms entered
> Editorial content viewed
> Ads clicked on
> Channels or micro sites
…Yahoo! behavioural targeting gives each category a unique “product purchase cycle” to ensure it reaches consumers for the correct duration while they are in market for that product. These cycles are based on a rigorous investigation of a consumer’s actions in the buying process. The frequency and intensity of these actions change the closer the consumer gets towards the point of purchase, allowing distinct periods of brand consolidation and purchase intent to be identified. Behavioural targeting allows ads to be strategically delivered to these exact points of the process…

Yahoo! tracks historical behaviour – who clicked on ads in this category in the past and what actions led to this click? Each user is then scored on how likely they are to respond to ads in this category. The ads are then delivered through behavioural targeting, which will only reach those judged to be in market and ready to respond to that specific product category.

How does it work? Behavioural targeting anonymously follows someone’s interests, patterns and behaviours so you can speak to
them knowing they want to be spoken to, which means less campaign wastage. This can be done by monitoring
a number of consumer actions including:> Search terms entered
> Editorial content viewed
> Ads clicked on
> Channels or micro sites visitedYou can then weight each person according to their relevancy to a particular industry category and their exact position within the buying process. This can be worked out by the frequency and how recently they have shown an interest in a specific product. For example, if someone visits Yahoo! Travel and searches for flights or travel insurance this will increase their rating for the travel category. Naturally they will also fall into the finance and insurance category and their subsequent actions will determine how relevant they are to

A Few Thoughts on Google, Data Collection, and Privacy: The Search Giant Blinks as Regulators Review

Google’s announcement today is a classic case study on how modern media companies deal with pressure from regulators and advocates. The company announced it would “anonymize IP addresses on our server logs after 9 months.” First, this would not have occurred without the extraordinary pressure brought by EU officials, especially data protection commissioners. [We should also thank numerous privacy and consumer advocates]. Nor would it have happened so readily if Google wasn’t trying to appease policymakers to ensure it can continue unfettered its online advertising shopping spree–such as DoubleClick and the pending joint venture with Yahoo! (and soon perhaps Verizon). Google blinks a bit on privacy when its corporate plans are under the regulatory cross-hairs (such as precisely this moment by the U.S. Department of Justice).

Google still needs to really limit its data collection practices, and become the global leader in privacy protection. It needs to become fully transparent about the myriad–and ever-growing–ways it collects, analyzes, and utilizes consumer data. It shouldn’t take regulatory review, policy pressure, or an attempt to blunt the outcome of a review from competition authorities, for Google to do the right thing. More coming.

Google/Verizon Deal: will increase “Google’s stranglehold on the mobile search market”

That quote in the headline comes from a new analyst note written by ad agency Avenue A/Razorfish. It explains [our emphasis] that: “[T]he deal will most certainly increase Google’s stranglehold on the mobile search market, and will be another blow to Yahoo and Microsoft, who are rapidly losing browser search share as well. Google currently owns 61% of the mobile search market, and already has deals in place with Sprint Nextel and T-Mobile. A deal with Verizon would give the search engine access to the current no. 2 wireless provider – but soon to be no. 1 once Verizon’s acquisition of Alltel closes.”

Regulators need to examine this deal on both competition and privacy grounds. The current review of the Google/Yahoo combination underway by the Department of Justice would be remiss if it didn’t address the mobile marketing issues. After all, Yahoo! mobile is a significant part of that company’s ad serving business. We still want to know whether Google will also be serving up mobile ads on Yahoo! as part of its forthcoming alliance.
source: Issue No 112 | August 27, 2008. SMTrends. Ave A/Razorfish.

Google/Yahoo deal raises competition and privacy concerns: the redacted SEC filing

The proposed deal where Yahoo turns over to Google a great deal of its search ad function is available via the SEC. Although it’s the redacted version, there’s enough detail to raise questions. Policymakers, consumer advocates, competitors, and the public should be concerned. The document underscores how competition has eroded in the online ad marketplace for search. The agreement first graph has this phrase [our italics]: “WHEREAS, Yahoo! desires to obtain the right to utilize Google’s monetization services in connection with certain web sites and Google desires to make these services available to Yahoo!.”

In other words, Yahoo! simply can’t make it on its own. Google gets to “conduct a review of each Prospective Yahoo! Partner Property” for the deal–which means Yahoo!’s relationships are now also Google’s. Google controls the ad copy–which Yahoo! can’t touch. Yahoo! becomes a mere licensee of Google services [“Google grants to Yahoo! a limited, nonexclusive and non-sublicensable license during the Term to access and use the Google Materials solely for the purpose of implementing and receiving the Services…”].

Beyond the deal’s threat to competition, there are privacy issues. Policymakers must ensure that we understand what data is being collected and shared by the two leading search firms. What information is to be obtained in what the agreement terms as a “client ID” [“Client ID” means a unique alphanumeric code or other designation or identifier that is provided to Yahoo! by Google to be used by Yahoo! as a Client ID in accordance with the Documentation…Yahoo! must assign a separate Client ID to each category of [*].”] The * indicates a redacted portion of the agreement.

We believe this deal will further undermine competition in a key online ad sector,  and only further strengthen Google. But beyond competition, consumers need to know how the deal will involve their data. Both Google and Yahoo should make it clear what data and analytics will be developed and shared.

Behavioral Targeting Lawsuit Illuminates How Data is Collected From You

Look for a moment at an excerpt from a legal tangle between behavioral targeting companies Valueclick and Tacoda (the latter now owned by Time Warner). Valueclick filed suit on July 15 claiming patent infringements, including for one entitled “Method and Apparatus for Determining Behavioral Profile of a User.” Read the “Abstract” and part of the “Summary of the Invention” for this patent and think about your privacy (and that this is based on 1998 technology!):“Abstract: Computer network method and apparatus provides targeting of appropriate audience based on psychographic or behavioral profiles of end users. The psychographic profile is formed by recording computer activity and viewing habits of the end user. Content of categories of interest and display format in each category are revealed by the psychographic profile, based on user viewing of agate information. Using the profile (with or without additional user demographics), advertisements are displayed to appropriately selected users. Based on regression analysis of recorded responses of a first set of users viewing the advertisements, the target user profile is refined. Viewing by and regression analysis of recorded responses of subsequent sets of users continually auto-target and customizes ads for the optimal end user audience.”

Summary Of The Invention: …Over time, the tracking and profiling member holds a history and/or pattern of user activity which in turn is interpreted as a users habits and/or preferences. To that end, a psychographic profile is inferred from the recorded activities in the tracking and profiling member. Further, the tracking and profiling member records presentation (formal) preferences of the users based on user viewing activity. Preferences with respect to color schemes, text size, shapes, and the like are recorded as part of the psychographic profile of a user…The tracking and profiling member also records demographics of each user. As a result, the data assembly is able to transmit advertisements for display to users based on psychographic and demographic profiles of the user to provide targeted marketing.”
source: Complaint for Patent Infringement: Jury Trial Demanded. Valueclick, Inc. v, Tacoda, Inc. Case No. CV08-04619 DSF. U.S. District Court, Central District of California, Western Division.

Yahoo! fails to address privacy concerns about its behavioral targeting apparatus. Letter to Hill not candid

The spinmeisters who wrote Yahoo!’s letter to House leaders didn’t do a real service for the troubled online company. They weaved and dodged the issue. Yahoo! took a trick from George Orwell by trying to reframe the privacy-threatening interactive data collection & targeting system by calling it “customized advertising.” Yahoo! also tried to hide behind the First Amendment by suggesting, as others have done, that without online ad revenues we would lose what “has made Internet content and services available to millions of people in the United States and around the world(3) – for free.”

Hold it Yahoo! No one is saying there shouldn’t be online advertising and targeting. But what is needed is full control by individual users who can decide what can be collected and how it should be used. That’s called opt-in, and it’s the approach Yahoo should have announced–instead it is trying to protect itself by resorting to an “opt-out” process that it knows won’t really safeguard users.

Yahoo should have told Congress exactly what it collects and how it does it. For example, they should have told Congress what it said to advertisers in 2007: That “Yahoo’s pinpoint targeting capabilities can zero in on a large concentration of precisely the prospects you want.” They should have added that in the same document they explained that advertisers could use Yahoo to “Motivate consumer behaviors (registration, trial, purchase, store visit, frequency, brand loyalty).” It could have explained the “data collection ad units” it offers to advertisers. Missing too, for example, was any discussion of so-called Yahoo “Smart Ads.” The company should have told Congress that these behavioral ads provide “Ease of micro-targeting and segmentation of campaigns…Using an offer management database and user insights…”

Instead of claiming that it doesn’t really do local targeting, Yahoo should have cited from its “Spot Marketing” materials, telling Congress about its “4 Steps to Local Media Efficiency…Reach!–Use Geo/Demo targeting on a State, DMA or Zip Code Basis; Relevance!–Behavioral Targeting, Yahoo! Maps and Contextually Relevant Properties; Creativity!–Maximize Engagement By Combining The Best of Offline & Online Creative Into A Single Rch Media Ad Unit; Insights!–Measure Campaign Effectiveness With Yahoo’s Analytics Suite Including Rich Media Engagement Metrics.”

Yahoo could also have told Congress what it says to pharmaceutical and health marketers:
“Treat with Surgical Precision.
Utilize purchase data from Yahoo! / AC Nielsen Consumer Direct to target actual buyers of related and competing products – while monitoring offline sales impact.

Find consumers by health condition with Yahoo!’s anonymous Behavioral Targeting – drawn from search, editorial, registration and more.”

Yahoo should have done better, especially at this time of real crisis over its future and management. By the way, we also believe that Yahoo was engaged in doing political damage control. With the Department of Justice currently reviewing the proposed Google/Yahoo joint venture, we think Yahoo is attempting to head off concerns about the merging of two of the world’s largest data sets on user behavior.

Google studies the online behavior of tweens (10-14 year olds) with message to target them via search advertising

When Google acquired DoubleClick last year, they also took over its search marketing division called Performics. A new study commissioned by Performics focuses on the media behaviors of 10-14 year olds, so-called tweens. The aim of the study is basically to get more online targeted marketing aimed at young people. The senior VP of search operations at Performics–Stuart Larkins–recently wrote an article on the new study that appeared in Chief Marketer. Here are some excerpts.

“At DoubleClick Performics, we sought to better understand the online search and purchase behaviors of seven influential demographic segments and commissioned ROI Research to study these habits across 10 different product categories. Results just arrived for one of the most dynamic segments – Tweens, consumers between the ages of 10 and 14…Tweens consume information through many channels, but the Internet leads. When asked how much time they spent with various media types, 83% said they spend at least an hour per day online, and 68% reported at least an hour per day watching TV. Radio, magazines and newspapers came in much lower…

Nearly half of respondents go online many times per day (more than three), and 87% usually spend at least a half hour each time. Looking closer at this time spent online, the survey found:

72% have a profile on at least one social networking site
· 54% have a MySpace profile
· 35% have a Facebook profile…

For search engines, Google was the overwhelming choice among tweens, with 78% indicating they use Google most frequently…

Tweens reported varying levels of involvement across product categories…

To capture the demand generated in complementary channels, marketers should incorporate search ads into other online and offline marketing campaigns. While a nice rule of thumb for any marketing program, this golden rule is especially true when targeting tweens.”

A story on the Performics study in today’s Marketing Daily noted the research came just as kids were getting ready to get their back- to- school gear. As reporter Tameka Kee explained, the study showed that “search marketing in the media mix is crucial to snagging the attention and influence of tweens, as they are increasingly using search to make product recommendations and find pricing info for their parents...Peformics also found that tweens were using search to find specific product information and store locations across multiple product categories. Nearly half of all respondents said that they used search to find product Web sites in the electronics, telecom, apparel and CPG categories, while nearly half said that they used search to find out where to purchase said products online.”

Marketing is a fundamental part of our lives–and will be increasingly so with digital media. But researching the online media behaviors of young people so they can be targeted with interactive digital marketing raises a number of policy issues, as well as parental concerns. We know that Google has announced plans to sell Performics, although it will incorporate some of its activities within its business operations. But Google’s senior executives should play a leadership role in addressing how to ensure the healthy development of young people. Consumer and childrens’ advocates in the U.S. and the EU-among other places–will be watching closely.

Update. The announcement just came from the Google press office that global ad giant Publicis will acquire Performics. Of course, Google and Publicis are also working together and announced an alliance earlier this year.  Here’s an excerpt from today’s email to the press: “Publicis Groupe and Google (NASDAQ: GOOG) announced today that Publicis Groupe has agreed to acquire the Performics search marketing business (Performics) from Google. Chicago-based Performics, one of the leading search marketing services providers, helps to improve the performance of advertisers’ investments and maximize
client campaign effectiveness. Its profit-driving suite of marketing solutions includes Performics’ reporting platform, local platform, advanced market expertise and active account management….Publicis Groupe has been a leader in the advertising industry for decades, and we believe Performics’ growing business will benefit from being part of it,” said Eric Schmidt, Chairman and CEO, Google. “We look forward to working with Performics as a partner.”

The IAB (US) “mobilizes” to Fight Against Consumer Protections for Online Media

Watch this online video of Randall Rothenberg speaking before a June Federated Media Publishing event. In Mr. Rothenberg’s worldview, demon critics of advertising (such as myself) are deliberately trying to undermine democratic digital media. This would be absurd, if it wasn’t so sad. Mr. Rothenberg is using scare tactics to whip up his members into a frenzy-all so they can fight off laws and regulations designed to provide consumers real control over their data and information. Luckily, Mr. Rothenberg will be on the losing side of this battle to protect consumers in the digital era. Regulators on both sides of the Atlantic understand how the digital marketing ecosystem raises serious concerns about privacy and consumer welfare. We have to say we are disappointed in John Battelle, the CEO of Federated (who wrote a very good book entitled The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture). Mr. Battelle should know that the online marketing system requires a series of safeguards which protects citizens and consumers. There is a balance to be struck here. Online advertisers have unleashed some of the most powerful tools designed to track, analyze, and target individuals–whether on social networks, or watching broadband video, or using mobile devices. We have never said there shouldn’t be advertising. We understand the important role it must play, including for the underwriting of online content. But the online ad system should not be designed and controlled solely by ad networks, online publishers, trade groups and online ad lobbying groups. It must be structured in a way which promotes as much freedom for individuals.