Category: FTC

Digital Marketing of Toys to Children Reflects Seamless Merging of Online & Online, inc. Play

Here’s a telling comment via a senior Disney executive:

“Disney says it sees online as a vital part of its strategy to turn its very well-known brand name into greater market share by making itself more relevant than ever to both children and parents…”That’s why [says Edward Catchpole, senior European VP for toys, Disney] all the sites we operate for our brands are not extensions, they’re seamless integrations, part of owning that toy, part of the play pattern. A young girl will run around pretending to be a fairy, then play with a toy and then go online and immerse themselves in a virtual world at one of our communities, like Pixie Hollow or Club Penguin. We also have a social network based around [Disney/Pixar movie] Cars in the US, which tends to be used more by boys,” Catchpole adds.”

source:  Vertical Focus: Toy retailing.  Sean Hargrave.  New Media Age [UK].  November 27, 2008 [sub required]

Mobile Privacy Watch: What Mobile Marketers Can Target [Hint, it includes “Race/Ethnicty, Level of education, Socio-economic status”…]

Mobile Marketer, an excellent mobile trade publication, just published a 2009 “Mobile Advertising Essentials” guide.  In the section titled “What to Look For in a Mobile Advertising Partner,” it summarizes the kinds of targeting marketers should expect.  Here’s an excerpt:

“Mobile advertising partners should offer a wide array of targeting capabilities, the most common which include: Age, Gender, Race/ethncity, Level of education, Socio-economic status, Location, Carrier, Handset manufacturer and type, Handset platform or operating system, Handset capabilities (i.e. Web-enabled or vide-enabled), Time of day, Day of week.”

The Interactive Advertising Bureau’s Official Definition of Behavioral Targeting

As the debate on privacy, consumer protection, and online marketing is renewed, it may be useful to see how the interactive ad industry classifies its practices.  Here is the definition of behavioral targeting from the IAB’s own glossary of terms.  My bold:
“Behavioral Targeting-
A technique used by online publishers and advertisers to increase the effectiveness of their campaigns. Behavioral targeting uses information collected on an individual’s web browsing behavior such as the pages they have visited or the searches they have made to select which advertisements to be displayed to that individual. Practitioners believe this helps them deliver their online advertisements to the users who are most likely to be influenced by them.”

Here are a few other terms used by the IAB that illustrate some of the the online ad industry’s data collection and targeting process:

“Click-stream –
1) the electronic path a user takes while navigating from site to site, and from page to page within a site; 2) a comprehensive body of data describing the sequence of activity between a user’s browser and any other Internet resource, such as a Web site or third party ad server.
Heuristic –
a way to measure a user’s unique identity. This measure uses deduction or inference based on a rule or algorithm which is valid for that server. For example, the combination of IP address and user agent can be used to identify a user in some cases. If a server receives a new request from the same client within 30 minutes, it is inferred that a new request comes from the same user and the time since the last page request was spent viewing the last page. Also referred to as an inference.

Profiling –
the practice of tracking information about consumers’ interests by monitoring their movements online. This can be done without using any personal information, but simply by analyzing the content, URL’s, and other information about a user’s browsing path/click-stream.
Unique user –
unique individual or browser which has either accessed a site (see unique visitor) or which has been served unique content and/or ads such as e-mail, newsletters, interstitials and pop-under ads. Unique users can be identified by user registration or cookies. Reported unique users should filter out bots. See iab.net for ad campaign measurement guidelines
Web beacon –
a line of code which is used by a Web site or third party ad server to track a user’s activity, such as a registration or conversion. A Web beacon is often invisible because it is only 1 x 1 pixel in size with no color. Also known as Web bug, 1 by 1 GIF, invisible GIF and tracker GIF.

Mobile Privacy & Marketing Watch: Protecting Hispanics

One of the areas my group and USPIRG asked the Federal Trade Commission to address in our complaint filed this week was mobile marketing to Hispanic-Americans.  An entire marketing infrastructure has evolved to target this important group; many questions remain about what they are being offered and how the mobile marketing has been structured. As Media Post explained yesterday in an article on the Hispanic mobile market: “…because they lag behind the general population for Internet access, many will first go online via their cell phones. In fact, they significantly over-index when consuming mobile content. According to comScore m:metrics, 71% of Hispanics consume content on cell phones compared to the market average of 48%. In addition, Hispanics tend to notice and respond well to ads on cell phones. Nielsen’s recent “Mobile Advertising Report” highlighted that Hispanic data users are more likely to recall seeing ads on mobile phones (41% compared with 30% of non-Hispanics) and more likely to have responded (22% vs. 13%).”

One mobile marketing company that is now also focused on the Hispanic market promises potential advertisers that it “utilizes advanced profiling capabilities that are inherent to the platform’s automated learning engine – meaning that the platform learns from previous customer interactions to automatically and organically build up profiles of users and their individual preferences. Each subsequent campaign is then automatically optimized (no human interaction is required!) in order to deliver the most personalized message possible that is based 100% on the user’s profile.”

We are not opposed to mobile marketing.  But systems of data collection, profiling, and targeting must be transparent, disclosed, and controllable (a real opt-in) by the users.

Google’s Android: Expanding Mobile Marketing and Data Collection

Just for the record, via New Media Age [excerpt]:

“Google’s ambitions in the mobile space go beyond most other internet companies…Google recognises the value of its ad-funded proposition may outweigh maintaining full ownership of the platform, so it’s handing over the keys to developers in order to maximise creativity and scope of applications while maintaining control over the earning potential of mobile advertising….

Google says it will give 70% of Android revenues to the developer and the remainder, less billing settlement fees, to the service provider — a fantastic prospect for many. But others question the need for all of Google’s own web applications to come preloaded on Android, raising concerns about an attempt to lock in the user rather than directing them to the Android Market store. Google denies this, saying it has created a platform to encourage consumers and developers to embrace the wider internet.”

source:  nma mobile: Google Android. Andrew Darling.  NMA magazine. 04.12.08 [sub required]

FTC Revolving Door: From Director of Consumer Protection to Law firm Partner at “the premier provider of legal services to technology, life sciences”

Lydia Parnes has been the director of the Bureau of Consumer Protection at the FTC.  Think about where we are today in consumer protection–and the many problems we face.  Consider the role of the FTC on financial issues [the subprime market] to online privacy to youth obesity.  And then look at this January 13, 2009 press release from “Wilson Sonsini Goodrich & Rosati, the premier provider of legal services to technology, life sciences, and growth enterprises worldwide.”  Excerpt:

“…announced that Lydia Parnes will join the firm as a new partner in March. The current director of the Bureau of Consumer Protection (BCP) at the Federal Trade Commission (FTC), Parnes is a highly regarded expert in the field of consumer protection, particularly in the areas of privacy, data security, Internet advertising, and general advertising and marketing practices. She will be based in the firm’s Washington, D.C., office.

“The global regulatory climate has grown more stringent and complex, and we have seen an increasing need for expanded expertise on consumer-protection issues from our clients, especially those in the technology and digital media sectors,” said CEO John Roos. “As one of the country’s foremost consumer-protection officials, Lydia brings unparalleled experience to the firm’s regulatory practice when it comes to privacy, security, and other consumer concerns.”

We don’t believe government officials should immediately work for industry in the areas they regulated after leading the government.  They should pursue careers in academia or non-profit organizations, if possible.  As long as there is a revolving door of this sort, doubts about the ability of the FTC to protect consumers will continue.

Ad agency has “profiled more than one-third of the world’s online population”

Developments in advertising, data collection, consumer analysis and targeting must be transparent and accountable to the public.  In a profile of Havas Digital, OMMA Magazine notes that [our emphasis]:

“Havas has created a dynamic online ad trading system that separates audiences from publishing content, and it makes user profile and unique cookie data king, rather than the inventory a publisher serves.  The core of Havas Digital’s virtual brand network is its Artemis database management and reporting system, which has already profiled more than one-third of the world’s online population. That and the agency’s Adnetik system help deliver customized roi analytics for media buying.”  “Artemis is the central piece of our media buying offering,” Kasper [Adam Kaspar, a senior VP] says. “Its importance has only grown as the technology has improved.”Coupled with proprietary algorithms, that database has allowed the agency to develop systems that draw on data from third parties, including clients, publishers and networks, that helps it understand which audiences command the most value at a particular time for specific brands.”

Artemis is a “marketing data warehouse.”  Yahoo is using the service, including for its already data-enabled Right Media Exchange.  Havas describes Artemis as “our proprietary marketing decision support system – a secure warehouse for all your marketing data, plus reporting tools that help make sense of it all.  Unlike some of the less sophisticated reports advertisers may receive from ad-servers, for instance, Artemis® provides detailed reporting right down to the user level.”

The FTC, EU, Congress and others will need to need to investigate the growing role consumer data plays in targeting us on and offline.  We don’t need private ministries of information tracking the global public.

Get Set, Ready, Regulate!: Online Marketing and Data Collection in 2009-2010 [see how everyone “owns” your data except you!]

New Year, new Administration and Congress.  Plus a growing global concern from policymakers, advocates and citizens about data collection online.  Even the relatively feckless Federal Trade Commission will do more on the issue this year. Here’s a toast to hope for a honest discussion about the data collection and targeting system which embodies the online marketing apparatus.  Look at this excerpt from a story on behavioral targeting and online publishing from this week’s Advertising Age.  Note that everyone believes that can collect and use the data collected from observing an individuals’ behavior–and don’t even have to get permission from the actual person.  Such online marketing practices, of course, raise important civil liberties issues, as far as I’m concerned.

Here’s the excerpt:  “…Who created the customer and who owns the data generated by a visit or a sale? “Data is key; everybody wants to own it, everybody wants to use it. It’s not just ad networks — its portals, publishers and holding companies,” said Mike Cassidy, CEO of Undertone Networks. “The question to be answered is who owns the data, if anybody.” In the offline world, publishers market their own subscriber lists. But online that data is harvested by a host of third parties such as Google’s DoubleClick, Microsoft’s Atlas and vast ad networks such as Platform A’s Advertising.com. “People are stealing from the media companies who have lost control of their data,” said Operative CEO Mike Leo….Here’s how it works: A publisher decides to allow an ad network to sell some of its inventory. That network places a cookie on the publisher’s site. Now, when a user leaves that site, and goes somewhere else, the network can track that user.”

source:  “As Tracking Proliferates, Web Publishers are Left Out: Behavioral Targeting Punishes Producers of Original Content.”  Michael Learmouth.  Advertising Age.  January 5, 2009 [sub may be required].

Behavorial Tracking a User of Search and Display: Hey, FTC. Better Tighten Up Those Proposed self-regulatory rules [Annals of Behavioral Targeting]

Online ad companies, such as Microsoft, have been developing ways of tracking a users journey online (“engagement mapping” of the digital marketing “conversion funnel”) so the share of ad dollars can be more properly apportioned (meaning, it’s not only the ad companies providing the “last-click” that receives all the credit).  We have long been troubled by the stealth tracking and commercial surveillance system being put in place.  Rich media online ad company Eyeblaster has developed a similar service.  Here’s an excerpt from a trade article.  After you read it, think about the FTC during an Obama Administration, and what we should expect it to do under a new majority:

“Eyeblaster has introduced Channel Connect for Search, a service that helps marketers track consumers who click on their display ads but do not transact immediately.

The service places a cookie on a user’s computer that remains on his or her desktop for 30 days. Eyeblaster customers can then identify those individuals when they later convert through search.

“It bridges the gap between display and search advertising,” said Thomas MciIheran, senior media manager with digital media agency Sicola Martin, which is based in Austin, TX. “It’s such valuable information, because there are clients who say display advertising isn’t working, and they think they should stop. This could be eye opening for them, because it shows that display is leading to search, and how much.” …The new service is “able to pinpoint crucial campaign data and draw important insights about the interaction of our search and display ads,” said Harry Case, director of media analytics and technology at Mindshare, in a written statement. “In the end, it provided us with a more comprehensive overview of user behavior.”

Ad Industry Lawyer Spins in Ad Age that Privacy Will Be on “Back Burner.” Not Only Incorrect–but self-serving

This week’s Advertising Age has a “Legal Issues to Watch in 2009” column.  Written by Douglas J. Wood of Reed Smith, it claims that: “PRIVACY TO THE BACK BURNER- Congress and regulators are in a Catch-22: While under constant pressure from constituents and consumerists to curtail the use of personal information or behavioral targeting, they recognize that advertising is the backbone of the internet. So while there will be occasional skirmishes, the war on privacy will continue in its stalemate. Regulators will also see browser makers offering more control to consumers to block ads and the collection of personal information as adequate progress.”

Mr. Wood, it turns out is “a member of Reed Smith’s Executive Committee and the firm’s Advertising Technology & Media Group…and is General Counsel to both the Association of National Advertisers and the Advertising Research Foundation.”

Perhaps Mr. Wood is too busy to really follow Hill and FTC developments, because he is wrong.  There will be considerable activity on the Hill and elsewhere.   His column should have been labeled as written by the lawyer for the ad industry lobby group.  But it does reflect a lack of insight about the online ad industry’s problems related to privacy and consumer protection.