Category: FTC

David Vladeck Appointed FTC Consumer Protection Director– Promoting the Public Interest Will Be High on Agency Agenda

Today’s announcement by FTC Chair Jon Leibowitz that he has appointed highly regarded public interest legal scholar and litigator David C. Vladeck as the new Director of the Bureau of Consumer Protection is terrific news.  Mr. Vladeck has spent decades as a dedicated public interest attorney at Public Citizen.  More recently, he has co-directed the critically important Institute for Public Representation at Georgetown University (where he is also a professor of law).

We expect Mr. Vladeck will vigorously pursue, with Chairman Leibowitz’s support, a serious consumer protection agenda.  Think about mortgages and other financial products, health marketing, privacy, online advertising, food marketing to children and adolescents–all of these issues and more will now get the intellectual and strategic attention they deserve.   Chairman Leibowitz deserves praise for selecting Mr. Vladeck.  The Chairman also heeded the call last month from leading consumer and privacy groups, including Consumers Union, CSPI, USPIRG, Privacy Times, and my CDD, that he appoint someone truly dedicated to consumer protection.  We are looking forward to a new era at the FTC.

Kraft’s Research to Boost Oreo Sales reveals “resurgent desire for indulgent food products”–A multi-media ad campaign designed to stimulate cookie “licking”

This excerpt from an Brandweek article on the 2009 Super Reggie winning ad campaign deserves to be highlighted, so the Federal Trade Commission can do a better job next time it researches the market.  The agencies involved for this campaign included Draftfcb (general and promotional advertising);  Razorfish (digital); Digitas (online media);  MediaVest (media); IMG (experiential); Weber Shandwick (PR).

“…Double Stuf Racing League (DSRL) …The highly stylized marketing and entertainment vehicle, billed as a professional sport…has enjoyed 16 consecutive months of sales growth since the program debuted in late 2007, per the company. That consistent performance was a resounding reversal of the brand’s previous sales declines that year, and it explains why Kraft continues to build on the effort in 2009.

It all began as Kraft’s marketing team and litany of agency partners searched for a new brand experience that would distinguish the creamier Double Stuf Oreo from the original cookie. Research revealed consumers’ resurgent desire for indulgent food products, and collective brainstorming led the team to focus on a familiar aspect of Oreo consumption.

“The spark came as we were thinking about fun new ways to engage consumers with Oreo,” explained John Ghingo, marketing director for Oreo at Kraft Foods, East Hanover, N.J. “Lots of people partake in the rituals of twisting, licking and dunking Oreo cookies in milk. Double Stuf Racing League focuses on the ‘lick’ aspect and takes Oreo to a new place in an unexpected way.”

Thus far, Double Stuf Racing League has pitted two sets of celebrity siblings against each other: NFL star quarterbacks Eli and Peyton Manning and pro tennis champs Venus and Serena Williams. In January 2008, a national TV teaser spot featured a mock press conference by the all-American football heroes declaring their entry into a “second sport.” The ad directed fans to a Web site (whatsthesecondsport.com) where they enter DSLR and participate in games by creating avatars called “Yoobies.” However, the identity of the second sport was kept alive, leaving viewers to chatter about the mystery on fan sites and blogs…

That buzz continues this year. A spring contest is slated for the Sunshine State, with appearances by both the Mannings and the Williamses. So what other famous athletes may join the competition? “Like any league, DSRL is always looking to scout great new talent,” demurred Ghingo.”

Super REGGIE Winner:  Oreo Double Stuf Racing League ‘Licks’ the Competition.   Michael Applebaum. Adweek.  April 6, 2009

DSRL site
NabiscoWorld.com Privacy [data collection] policy

Congressional Internet Caucus and the State of the Mobile Net: Corporate Donors Influence Group’s Agenda, Leaving Public Vulnerable to Loss of Privacy

When will members of the Congressional Internet Caucus wake up and address the role its special interest dominated “Advisory” Committee is playing?  The Caucus is holding a “State of the Mobile Net” conference on April 23.  It’s doubtful Congress will be receiving the unbiased information they need, given that the sponsors of the event are the leading companies engaged in mobile marketing and data collection.  As typical of the “business model” crafted by the Center for Democracy and Technology connected group known as the Internet Education Foundation, the event prominently acknowledges its  “Platinum” sponsors: the CTIA lobby group, Google, Microsoft and Verizon.  “Gold” sponsors are AT&T, Nokia, T-Mobile.  There is also a category called “promotional” sponsors which lists Yahoo and several others.

It’s highly unlikely that the meeting will discuss the real issues challenging consumer privacy and welfare on the mobile Internet (including, we expect, the recent CDD/USPIRG complaint filed at the FTC– which has helped launch an investigation into that market).   The Advisory Caucus is run by the Internet Education Foundation, whose board members include representatives from Google, Verizon, Comcast, Microsoft, Recording Industry of America, and the Consumer Electronics Association. So the line-up of speakers is crafted to make sure that corporate donor feathers–and their willingness to continue to financially contribute–aren’t ruffled.  On the privacy panel for the event we have, of course, a representative from CDT.   There are also mobile marketers–including Yahoo and loopt.  There is the DLA Piper law firm that advocates for industry and a lone academic. Consumers and citizens deserve better from Congress.

PS:  As an example of how incredibly biased the Advisory Committee to the Congressional Net Caucus is, look at the description and speaker line-up of its recent briefing on online advertising.  A supposed “unbiased” event,  it featured industry lobbyists and several groups funded by online marketers!  Incredibly shameful!

Advisory Committee to the Congressional Internet Caucus

Anatomy of Online Advertising: Understanding the Privacy Debate
March 30, 2009…The purpose of the briefing is to provide an unbiased foundation for understanding the various privacy issues that Congress will debate in the context of online advertising.

Panelists:

* Paula Bruening, Hunton & Williams
* Maureen Cooney, TRUSTe
* Michael Engelhardt, Adobe Systems
* Tim Lordan, Congressional Internet Caucus Advisory Committee
* Jules Polonetsky, Future of Privacy
* Heather West, Center for Democracy & Technology
* Mike Zaneis, Interactive Advertising Bureau

A Mobile Marketer explains how they build a profile, including operator, geographic, demographic, search query data [Annals of Mobile Marketing]

Here’s an excerpt from an video interview we transcribed with Paran Johar, CMO of Jumptap (a mobile marketing company).  The interview was done at the Mobile World Congress, Barcelona 16-19 February, 2009:

“Journalist: You have a lot of intelligence built in to your engines in the back. How is that working together? How far down can you deep-dive in the targeting? How granular can you get?
PJ: Number one; Targeting is only important as long as you have scale and reach. So we need to kind of frame that out. Number two; we take inputs from various sources. So, we take operator data, whatever they want to pass to us, they can pass us. Certainly with AT&T we get geographic data from them, in some cases we get demographic data, we get search word query data, whether we are the search engine or if it is Google, Yahoo or Microsoft, that can get passed to us, contextual data and behavioral data. We take all that together and we score it, build a taxonomy to build a profile that will serve a relevant ad. We believe mobile phone is the most personal devices…
Journalist: … How much of an issue is the analytics now and are you positive and upbeat now that you feel that maybe mobile operators are getting their head around this to deliver it?
PJ: That’s a great point. A couple of things with the GSMA-Comscore UK trials. Number one, was absolutely wonderful that it fostered collaboration among operators for various audience segments. Number two, it was wonderful that they looked beyond just geographic, demographic, but they also include behavioral profiles in terms of their audience assessment. I also think it is very interesting that they are moving forward without actually being able to monetize this and building a platform so advertisers can participate in this. I think from a metric standpoint, the next thing that we are gonna look for is really standardization of post clip metrics and how to integrate that into
advertising campaigns.
Journalist: That’s an interesting idea. How do you envision that? How should it be?
PJ: It gets a little complicated but it shouldn’t be. In it’s simplest form you just have post-click, like a click to action. You click on the ad unit, you perform some action and it calls a pixel and you register that. But with mobile you obviously have different actions that can occur. It could be click to a map, it could be click to call, click to SMS. How do you track those actions? How do you then integrate them into a reporting structure, which is key. And we are building the tools to make it easy for media planners, agencies and clients to actually track all their actions holistically and then optimize their campaigns so that they are reaching their maximum ROI.”

UK Online Ad Lobby Group: “behavioural targeting is going to be the future of the internet.” [Annals of Behavioral Targeting]

The debate over behavioural targeting, profiling and interactive advertising is heating up in the European Union.  We just spoke at a EU event on the topic.  More later on that meeting (which featured Google, Microsoft, Nokia and others, all wearing their Brussels best).  Google and others pointed to a new code on behavioural targeting created by the UK’s Interactive Ad Bureau, which they suggest is a model (and is designed to foreclose on real privacy safeguards).  I will be writing about this code in the next post.  But here’s what the chairman of the IAB UK, Richard Eyre, said about protecting privacy online and the Internet’s future [via Brand Republic.  March 31, 2009]. Excerpts:

Richard Eyre, chairman of the Internet Advertising Bureau, has said he accepts the European Union’s decision to investigate behavioural targeting as “logical” but hopes that the current self-regulatory process “will satisfy everyone”.

Eyre was responding to the EU’s decision to investigate behavioural targeting by online advertisers, in a move that could result in legislation that overrides the code recently introduced by the IAB with the support of Ofcom and search giants Google and Microsoft…Eyre said that he understood that the EU had to have a point of view on the issue because behavioural targeting is a new tool about which the general public is still forming its opinion. However he hopes the self-regulatory code on behavioural targeting recently introduced by the IAB will satisfy everyone. Eyre said: “It is very easy to dismiss the issues as an invasion of privacy but the fact is that behavioural targeting is going to be the future of the internet.”Eyre told ISBA’s annual conference recently that behavioural targeting would be a “game-changer” for advertisers.
PS:  As for Microsoft’s position on privacy, here’s an excerpt from a March 5, 2009 New Media Age story:  “Zuzanna Gierlinska, head of Microsoft Media Network, said, “It’s better that regulation comes from within the market rather than from government, which might not be fully aware of how behavioural targeting works.”  source:  “Industry unites to defend trust in online advertising.”   Suzanne Bearne.  nma.co.uk

CDD Asks Facebook to Address Digital Marketing & Data Mining in Principles–including for outside developers

We have significant questions about the proposed Principles and Statement and how they will affect individual privacy.  CDD has submitted comments.  Here’s an excerpt:  “Ultimately, users must have full knowledge of and control over any and all user data collected by Facebook or by any third party using Facebook’s platform. Facebook must change its Principles and Statement to give users this knowledge and control. 

We urge Facebook to use this wording:

2. Ownership and Control of Information

People own their information. They have the freedom to share it with anyone they want and take it with them anywhere they want, including removing it from the Facebook Service. People have the freedom to decide with whom they will share their information, and to set privacy controls to protect those choices. As part of user control of their data, every Facebook user has the right to know and fully control if and how data is collected from them, especially if the data is to be used in advertising. Facebook will be transparent in how it collects and analyzes data for advertising, including profiling and targeting of users. Facebook also will detail to users what particular data collecting and mining will be done for advertising purposes. Facebook will ensure that every company that works with it, via third-party applications or otherwise, also details to users if their data is collected or mined, how this data will be collected or mined and for what the data that is collected or mined will be used. Those controls, however, are not capable of limiting how those who have received information may use it, particularly outside the Facebook Service…

Users need to know how third-party developers use the data accessed or collected, including how the data is used for advertising and marketing. For example, if games and widgets and other third-party applications base their business model on capturing user data for lead generation, the users must be clearly told the details of this data capture and lead generation, and users must give their explicit approval first.  Users have the right to control third-party use, access to, collection or sharing of user data, and Facebook needs to make this clear in its Principles.”

Facebook Connect: “über-targeting” for marketers [Annals of Social Media Marketing]

excerpt from online marketing blog [our bold]:

The Benefits of Facebook Connect

For marketers:

First, it facilitates getting mentioned in Facebook users’s news feeds, which has been the holy grail for marketers because it raises awareness of your business and delivers an implied endorsement.

Second, it provides a treasure trove of user data, allowing über-targeting. You can literally customize the content of your page based on the visitor’s Facebook data, such as his age, gender, location, likes, dislikes, relationship status, even networks, groups, and pages he’s joined – or “fanned.” As a simple example, if you know a visitor is a fan of the band U2, you can highlight your U2-theme stationery, T-shirts, dog bones.

Marketers Have Growing “Obsession” with Behavioral Targeting via Search Engines [Annals of Behavioral Targeting]

excerpt:  “The official version of the SEMPO [Search Engine Marketing Professionals Organization] report was released today and…shows “overwhelming interest” in newly developed behavioral targeting opportunities, with three-quarters of advertisers claiming they would pay bid more for clicks targeted to in-market consumers.  The … “The State of Search Engine Marketing 2008″ shows  behavioral targeting has moved demographic targeting down on the priority list….this year, advertisers on average would pay 10 percent more for both demographic targeting and daypart targeting; they would pay 13 percent more for behavioral targeting. Behavioral-based search retargeting was unchanged in terms of spending. Two in five advertisers said they are not currently targeting or retargeting searchers but plan to in the next 12 months…Another 44 percent said they were targeting searchers either through an ad network, a portal or consumers who had previously visited their site.

As reported last week, North American spending on SEM for 2008 will total over $13.4 billion.”

source:  “Search Report Shows Obsession with Behavioral Targeting.”  John Gafney.  Econsultancy.  March 20, 2009.

Sempo

Google and WPP Fund Neuromarketing Research for Digital Ads: Ethical Issues and the Need for Policymaker Scrutiny [with an update on the grants!]

The Wall Street Journal and other publications report that Google and ad giant WPP will announce today the $4.6 million grants it will award for academic research designed to “improve understanding and practices in online marketing, and to better understand the relationship between online and offline media.” Among the research efforts given funds are projects that will “analyze internet users’ surfing habits to determine their thinking styles, such as whether they are most influenced by verbal or visual messages or if they are more holistic or analytical, and how to tailor ads accordingly” and an “analysis into how online ads effect blood flow to different areas of the brain. This research would seek to show the role that emotions play in decision making.”   Academics from MIT, Stanford, and Harvard will receive funds, among others. (And for those of us concerned about the role online advertising and data collection is playing in China–and impacts human rights and environmental sustainability–one of the new grants will fund “how Chinese web users respond to different online-ad formats, such as display and search ads”).

As we will tell the European Commission at the end of the month, at a workshop they have organized to discuss interactive advertising and consumer protection, the evolving role of neuromarketing with online advertising raises a number of troubling concerns–and should trigger a serious policy review.   We have not yet seen a final list of the grantees.  But Google should be funding independent research that will honestly explore the impact and ethics of online marketing.  They should be ensuring that the ethical issues of online marketing–such as the concerns raised by their new behavioural profiling and targeting system–receive a honest scholarly review.

The growing controversy over the role pharmaceutical companies are playing with scholarly research on drugs, we think, has implications here.  We believe all the academic institutions receiving these grants must vet them to ensure they truly address the real impact online ad techniques have on individuals and society.

Update:  Google & WPP made the academic research announcement–eleven grants awarded.  Here are some to ponder–and raise questions:

*  “Targeting Ads to Match Individual Cognitive Styles: A Market Test”; Glen Urban, Professor, MIT Sloan School of Management;

*  “How do consumers determine what is relevant? A psychometric and neuroscientific study of online search and advertising effectiveness”; Antoine Bechara, Professor of Psychology and Neuroscience, Department of Psychology/Brain & Creativity Institute, University of Southern California and Martin Reimann, Fellow, Department of Psychology/Brain & Creativity, University of Southern California;

*“Unpuzzling the Synergy of Display and Search Advertising:Insights from Data Mining of Chinese Internet Users”; Hairong Li, Department of Advertising, Public Relations, and Retailing, Michigan State University and Shuguang Zhao, Media Survey Lab, Tsinghua University;

*”Are Brand Attitudes Contagious? Consumer Response to Organic Search Trends”; Donna L. Hoffman, Professor, A. Gary Anderson Graduate School of Management, University of California Riverside and Thomas P. Novak, A. Gary Anderson Graduate School of Management, University of California Riverside;

*“Marketing on the Map: Visual Search and Consumer Decision Making”; Nicolas Lurie, Assistant Professor of Marketing, College of Management, Georgia Institute of Technology, College of Management and Sam Ransbotham, Assistant Professor of Information Systems, Carroll School of Management, Boston College.