Category: FTC

A Behavorial Targeting Example Shows Why Privacy Laws are Required, including a New and More Accurate Definition of Personally Identifiable Information

Interclick, “one of the largest advertising networks in the U.S., reported higher revenues today.  The company says that it collects “non-personally identifiable information (non-PII)” via cookies.  Here’s what Interclick considers, like other online advertisers, non-PII: “On the interCLICK network, we collect non-personally identifiable information (non-PII) such as web sites visited, content viewed, ad interaction, interaction with advertiser websites, IP addresses, search terms used, and other click and browsing behavior. Additionally, we may collect non-PII technical information including IP address, OS, browser type, language settings.”

Meanwhile, Interclick’s behavioral targeting “option” for advertisers explains that its: “innovative behavioral targeting filters allow you to target the right individual users at the right time, increasing the effectiveness of your campaigns. With over 350 behavioral categories, interCLICK can get as precise as you want.

We segment users based on observed behaviors into 3 interest levels: slightly, moderately and very. Furthermore we use frequency and recency to classify these interest as short, mid, or long term interests. As the user navigates throughout our network of sites, we continually adjust their profile based on anonymous observations, assuring the accuracy of our profiles.” It offers “Behavioral Segments” which allows online advertisers to “Leverage interCLICK’s massive data warehouses to effectively target users who have been determined to exhibit certain behaviors throughout interCLICK’s network. interCLICK offers over 350 different Behavioral Targeting categories/sub-categories.”

Among the segments include financial services including “personal banking seekers, credit card seekers, retirement investing.”   There’s a segment targeting “college seekers,” raising issues related to youth marketing.  Another segment is on “health,” including categories targeting “Diet & Fitness Enthusiasts.”

InterClick is just of many ad networks engaged in such data collection and targeting.  But it illustrates why the online ad industry must be regulated, to protect consumer privacy and welfare.

The “Revised” Network Advertising Initiative Principles: Ghost-written by Bernard Madoff?

That was really what we felt reading the “NAI Response to Public Comments” released yesterday.  It accompanied the 2008 principles announcement by the self-regulatory trade online marketing trade group.  The “response” is worth reading, because it really reveals the inability of the group to meaningfully address how to protect consumers online.  You would think that an organization which has Microsoft, Google, Yahoo, Time Warner and many others as paying members could at least clearly state what happens to our data in the online marketing process.  But the real goal of the NAI is to prevent the enactment of serious state and federal privacy policies that would protect consumers. My group put out a statement yesterday discussing the new principles.

The credibility of Google, Microsoft, Yahoo and Time Warner are at stake.  They should be able to ensure that their own organization can honestly address the implications of online advertising.  But it’s time to abandon any call for self-regulation.  That has been a failure.  It’s clear that a growing number of consumer and privacy groups are calling for a legislative solution, as well as a more effective FTC.  Responsible online ad companies will support such regulation.

Statement on FTC’s Children’s Online Privacy Protection Act legal action against Sony/Additional Privacy Policies are Required

Statement of Dr. Kathryn C. Montgomery, who led the campaign for the passage of the Children’s Online Privacy Protection Act (COPPA), commenting on the FTC children’s privacy lawsuit announced today against Sony BMG Music Entertainment

I applaud the FTC’s actions to enforce the Children’s Online Privacy Protection Act. The government’s lawsuit against SONY sends a strong signal to the online industry that this law must be taken seriously. COPPA was designed to protect children under the age of 13 from unfair data collection and manipulation by online marketers. Congress passed the law ten years ago to establish a clear set of safeguards and principles that were built into the foundation of the emerging digital marketplace. However, in recent years, online data collection has become increasingly sophisticated, expanding into a variety of new platforms — from social networks to mobile phones to interactive games — that are now central tools in young peoples’ their lives. In the new administration of President-elect Barack Obama, both the FTC and Congress must support additional policies that will extend COPPA’s mandate and create privacy protections for all children under the age of 18.

Kathryn C. Montgomery, Ph.D, is Professor of Communication at American University in Washington, DC.

Tales of Behavioral Targeting: Merging Offline Databases with Online User Tracking

The folks at the Federal Trade Commission better toughen up its proposed privacy principles. And Congress and the new Obama Administration, of course, will need to step in. That’s because the online marketing behavioral targeting industry is rushing to push the data collection from unprotected consumer digital envelope. Take, for example, Datran Media. In an interview, a representative explains “Datran’s unique advantage is in the fact that we have figured out a way to aggregate more audience data than anyone else…We derive our behavioral and lifestyle data from real online and offline requests for information or transactions, and obtain our household-level demographics and interests from the most informative and accurate direct marketing databases available. We feel that the combination is unprecedented and unbeatable in the marketplace.”

On Datran’s website it explains to potential clients that its Aperture product “is the first and only advertising solution to leverage the power of offline demographic data – at the household level – with online display advertising to help identify, reach and define your ideal customers – no matter where they are on the Web.” Describing a “smarter way” to reach consumers, the company explains that:

  • Aperture is the only advertising solution that uses household demographic information to precisely target banner ads online, and report on the ads’ audience AND responders.
  • Aperture defines your customers by WHO they are and WHAT they do.
  • Retargeting capabilities bring customers back to your site with an added level of insight into who they are.
  • Leveraging 100 million + demographic profiles combined with proprietary transaction-based behavioral intelligence, Aperture is capable of delivering greater consumer insights than ever before.

Aperture provides deep insights into the effectiveness and reach of your campaigns – by the view and click – so you can make the best business, media mix and creative decisions for your brand.”

The company’s targeting capabilities are also explained:

“Using Datran Media’s proprietary 100 million+ household level profiles, Aperture can layer any of following criteria to define your ideal customer and target your ads directly to them anywhere they go on the web.

  • Household
  • Gender
  • Household Size
  • Number of Adults
  • Number of Children Present
  • Renter/Owner
  • Length of Residence
  • Marital Status

The company can also “layer” in such targeting parameters as one’s neighborhood [“Number of Adults, Median Number of Children Present, Median Annual Income,” etc.] as well as consumer “behavior” [“auto, insurance, personal finance, dating and romance,” etc.].

As we said to the FTC and the industry, just because technology permits you to collect data and target individuals, doesn’t mean one should do it without the complete prior informed consent of users. Industry leaders need to own up to what they are doing, and support the kind of privacy protections a digital democracy requires.

Google’s “Policy Fellowships”–Self-Serving Efforts to Help Ward Off Privacy and Online Marketing Protections?

Google has selected 15 organizations for its 2009 “Google Policy Fellowship.” Fellows are funded by Google and will work on “Internet and technology policy” issues over the summer. Take a look at some of the groups it selected and what they say the projects will be (and their positions on Internet issues). And then ask–is Google working to help undermine the public interest in communications policy? Think online privacy and interactive marketing as you read these following excerpts from a number of these groups:

“The Competitive Enterprise Institute is a 501(c)(3) non-profit public interest organization dedicated to advancing the principles of free enterprise and limited government. We believe that individuals are best helped not by government intervention, but by making their own choices in a free marketplace…Electronic privacy: CEI seeks to reframe the online privacy debate in terms of the potential benefits to consumers of greater information sharing, transparency, and marketing. Fellows will explore competing privacy policies and how they are evolving as the public grows more aware of privacy risks. This research will also encompass privacy-enhancing technologies that empower consumers to safeguard personal data on an individualized basis.”

“The Progress & Freedom Foundation (PFF) is a market-oriented think tank that studies the digital revolution and its implications for public policy… Online Advertising & Privacy Policy Issues: PFF defends online advertising as the lifeblood of online content and services, particularly for the “long tail,” and emphasizes a layered approach to privacy protection, including technological self-help, user education, industry self-regulation, and enforcement of existing laws, as a less restrictive—and generally more effective—alternative to increased regulation.”

“The Technology Policy Institute is a think tank that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world… Privacy and data security: benefits and costs to consumers of online information flows, and the effects of alternative privacy policies on consumers and the development of the Internet.”

“The Cato Institute’s research on telecommunications and information policy advances the Institute’s vision of free minds and free markets within the information policy, information technology, and telecommunications sectors of the American economy…Information Policy: Examining how increased data sensing, storage, transfer, processing, and use affect human values like privacy, fairness and Due Process, personal security, and seclusion. Articulating complex technological, social, and legal issues in ordinary language. Promoting the policies that protect these human values consistent with a free society and maximal human liberty.”

Google is also funding fellowships at other groups, including the partially Google funded Center for Democracy and Technology. The CDT connected Internet Education Foundation (which helps run the Congressional Internet Caucus, where Google is a corporate Advisory member) also will house a Google Fellow. There are a few public interest groups hosting Fellows that have an independent track record, including Media Access Project, EFF, and Public Knowledge. But awarding Fellowships to groups which will help it fight off responsible privacy and online marketing safeguards provides another insight into Google’s own political agenda.

AT&T Positions itself for its (hoped for) Digital Ad & Data Collection-driven Era [Attention: Future of Privacy Forum group]

AT&T, like other companies, understands that online advertising is an intrinsic part of the broadband era business model (along with subscriber charges, transaction fees, etc.). A number of reporters, charming cynics as they may be, are convinced that AT&T’s recent calls for some type of opt-in is merely a form of Google bashing (it’s really Google envy!). But, as this trade story describes below, AT&T wants to better cash in on online ad revenues). It underscores why Congress must enact opt-in rules and other safeguards to govern ISP data collection, profiling, and targeting–especially across platforms. It also suggests a flaw in how the new AT&T supported Future of Privacy Forum envisions safeguards. They are quoted in The New York Times saying they want “to move the debate beyond opt-in versus opt-out,”–meaning self-regulation would rule–or ruin–the data driven day. Here’s an excerpt from CED magazine on AT&T’s new restructuring plan so Internet ads can play a more prominent role:

“AT&T’s Advertising & Publishing business unit has been renamed AT&T Advertising Solutions and is responsible for all of AT&T’s advertising sales, according to the company, to take advantage of advertising opportunities that cut across print, Internet, TV and wireless. Meanwhile, AT&T’s Yellowpages.com business unit has been renamed AT&T Interactive. That operation gets expanded responsibility for the development, management and delivery of online and mobile advertising products across all of AT&T’s media platforms. AT&T Interactive is responsible for online and mobile advertising inventory and offerings.”

source: “AT&T realigns ad operations.” Brian Santo. CEDMagazine.com November 20, 2008.

Why Google Can’t Say a Word that Starts With “P”—Privacy

The senior execs and DC lobbying team at Google really have a major problem addressing one of the company’s gravest problems–its lack of leadership protecting consumer/citizen privacy. While Google claims to reporters and others it’s been proactively strengthening its privacy policies, most of the changes have come as a result of pressure from policymakers and privacy advocates.

This week, Google released a booklet which “spelled out…2009 policy priorities” for the new Administration and Congress, including several Internet related issues. The booklet’s release coincided with a speech Google CEO Eric Schmidt gave at the New America Foundation in Washington, D.C. Missing from the booklet’s agenda was any discussion of privacy or the role and structure of online advertising (You would never know, for example, that Google was just forced by the Department of Justice’s antitrust division to drop its proposed deal with leading rival Yahoo!).

Google should be playing a leadership role supporting the enactment of serious privacy rights for the public–including “opt-in,” real transparency, user control, limits on retention, etc. If Google believes its golden digital goose will be baked once consumers better understand and control how they are being profiled and targeted, they should examine how it defines corporate social responsibility. But Google’s current approach—we can’t admit we are collecting your data for interactive marketing and cannot even say the word privacy in public-– will ultimately have consequences for Google’s future–including its share price.

New AT&T-funded “Future of Privacy” Group: Will it Support Real Privacy Protection or Serve as a Surrogate for Self-regulation and Data Collection?

A new group co-directed by former DoubleClick and AOL chief privacy officer Jules Polonetsky, called the “Future of Privacy Forum,” has been announced. It is connected to the law firm representing AT&T–Proskauer Rose–which has a considerable practice in the online marketing and data collection area. Other backers include Intel, General Electric, IBM and Wal-Mart.

We are concerned, however, that the role of the Forum is to help discourage Congress from enacting an opt-in regime for data collection. Both ISPs–such as AT&T, Verizon, Comcast and Time Warner–as well as online advertising companies such as Google/DoubleClick, Yahoo, and Microsoft must be governed by privacy laws which empower and protect consumers. The role of ISPs in any data collection for targeted online marketing, in particular, requires serious analysis and stringent safeguards. AT&T, Google, Microsoft, Comcast, the online ad networks, and social media marketers (to name a few) must be required to provide meaningful disclosure, transparency, accountability and user control (with special rules governing health, financial and data involving children and youth). Self-regulation has failed. If the Future of Privacy group is to have any legitimacy, it will work to support serious federal rules. But if it trots out some sort of voluntary code of conduct as a way to undermine the growing call for real privacy safeguards, this new group may soon be viewed as beholden to its funders and backers.

Online Ad Privacy Watch: Google Adding DoubleClick to its AdSense System

Policymakers will need to closely examine the role DoubleClick will play in collecting, analyzing, and helping profile consumers (whether they are online, seeing a video, or using a mobile device, for example). Here’s an email Google is reported sending out this week. My bold:

“We understand that the recent economic turmoil has created a lot of uncertainty in the lives of AdSense publishers. During these difficult times, we’re continuing to invest in innovations that improve publisher monetization and advertiser value in the content network.

We’re focusing on further developing our product offerings and boosting ad performance for publishers. We recently announced advancements in AdSense for search and experiments to make ads more effective. We’re bringing DoubleClick technologies to AdSense publishers, and we’ll continue to launch new products and features. We’re also continuing to improve our offerings for AdWords advertisers, making it easier for them to target the Google content network. Features for advertisers, such as the new display ad builder, are designed to improve ad performance on AdSense publisher sites.

We’ll keep driving technological progress, but our best asset will always be our publisher partners. The strength of AdSense lies in the value of the content you bring to users and the quality of the sites you bring to advertisers. Our success is tied to yours. We look forward to partnering with you for the long term, and remain dedicated to helping you succeed.”

Google Using Brain Research to Hone its Online Ads

Google has joined the stampede of advertisers who have embraced the tools of neuroscience to help them create the emerging generation of interactive ads. In the new model for marketing, the goal is to bypass our conscious, more rational, decision-making. They want to reach deeply into our emotional, unconscious, self. Hence, the gaggle of companies helping marketers with brain research. Google, by the way, is using the same company that recently tested how junk food ads affected consumer brains during the recent Olympic games. Neurofocus, the Berkeley-based company partnering with Google, won a major ad award for its help harnessing neuroscience to sell Frito-Lay chips. The growing role of neuroscience research for advertising (especially digital marketing) must be addressed by policymakers, health professionals, and other responsible parties. Here’s the Mediaweek excerpt:

“Google is so confident that its InVideo Ads product—those semi-transparent/animated overlay ads it launched on YouTube last year—are game changers that the company is turning to brain wave researchers to prove their effectiveness.

The search giant–in conjunction with MediaVest–has partnered with NeuroFocus, a researcher that specializes in biometrics, to gauge both how users respond to InVideo ads and how well those ads complement traditional banner ads. NeuroFocus specializes in measuring individuals’ brain response—by literally placing sensors on their heads—as well as other factors like pupil dilation and skin response.

“We were really interested in looking at what we think of as a pretty innovative ad unit,” explained Leah Spalding, advertising research manager, Google, who emphasized that since InVideo ads are designed to be non-intrusive, they warrant an evaluation that goes beyond traditional measures like click-through rates. “Standard metrics don’t tell the whole story…Specifically, after fielding a study among 40 participants last May, InVideo ads scored above average on a scale of one to 10 for measures like “attention” (8.5), “emotional engagement” (7.3) and “effectiveness” (6.6). According to officials, a 6.6 score is considered strong.”

source: “Google, MediaVest Tap Biometrics for InVideo Ads Play.” Mike Shields. Mediaweek. October 23, 2008.

and more on the research via Mediapost: “…the NeuroFocus research conducted in May looked at the reactions of 40 people to YouTube InVideo overlay and companion banner ads from a cross-section of MediaVest advertising clients.

The firm used biometric measures such as brainwave activity, eye-tracking and skin response to gauge the impact of ads. Based on criteria including attention level, emotional engagement and memory retention, it then comes up with an overall “effectiveness” score for ads.”

“Google: This is your brain on advertising.” Mark Walsh. Mediapost. Oct. 23, 2008

PS: Google has been holding research discussions on such topics as “The Neuroscience of Emotions [Sept. 16, 2008]. Here’s the link to a presentation via YouTube.

Here’s another on computational neuroscience by a researcher who works on online advertising.