Category: FTC

Google’s online video clout bigger than the TV networks

Just a friendly reminder that the new media world is here–and that it should be the primary focus of public interest communications policy strategies. Via Variety (excerpt):

More signs of the Internet apocalypse for TV’s old guard: U.S. Web surfers viewed some 11 billion online videos in April, a gain of 33% from the same month last year.

According to just-released Web traffic stats from comScore, the most ominous stat is how ardently the next generation has taken to watching video on the Internet.

Online vid viewing is highest among 18- 34-year-olds, who averaged 287 minutes in April…And make no mistake, YouTube is CBS, NBC, ABC and Fox combined on the Internet.”
source: Net traffic signs suggest TV offramp: Web surfers ride YouTube, MySpace wave. Cynthia Littleton. Variety. June 23-29 2008 [print edition. sub required].

The IAB Can’t Say the Word “Privacy” Before the U.S. Congress

On Wednesday, IAB president Randall Rothenberg testified before a House Small Business subcommittee. Incredibly, the written testimony failed to mention privacy. Nor did the testimony really convey the nature of interactive advertising today. We will be contacting the subcommittee to set the record straight. And the IAB has to do some serious soul-searching. As more people become informed about the data collection and targeting practices underlying digital marketing, they will expect that companies doing business online are engaged in ethical data collection practices. This will be especially true when it comes to protecting the privacy and consumer welfare of children and teens.

PS: This excerpt from Mr. Rothenberg’s testimony is another illustration of how out of touch the IAB has become. They can’t acknowledge the industry’s problems and offer reasonable solutions. The IAB is also going to hurt small business, once customers learn how their privacy is threatened (and how online advertising raises medical and financial data issues, for example). Perhaps someone will come along offering responsible leadership on this issue for small business. They aren’t getting it from the IAB’s lobbying campaign. Once again, no one is saying there shouldn’t be online advertising. But we are saying that privacy has to be protected–where consumers are in charge of what is collected. And that some practices–including data collection and targeting of children and adolescents as well as sectors such as medical information–require safeguards. But the IAB’s leadership has decided to use the “Chicken Little, Our Data Won’t Be Falling” scare tactic.

“A small but vocal coterie of forces opposed generally to marketing, advertising, and open media markets is attempting to advocate to limit the technology responsible for this internet advertising revolution.

Although these advocacy groups have provided no evidence of public harm, their efforts have begun resulting in regulatory proposals which, if enacted, would severely hinder the ability of small publishers to support themselves with advertising sales, and impair the ability of small businesses to use interactive advertising to market themselves.”

Google expands data targeting and profiling to provide “more brand lift and brand awareness” for ads

Google’s new “Ad Planner” is just one of a series of tools now emerging which are designed to more precisely track and target consumers for advertising campaigns. Microsoft’s “Engagement” initiative has similar roots. “The focus [of Google Ad Planner] is primarily on creating more brand lift and brand awareness [for advertsiers],” [Wayne Lin, business product manager at Google] told DMNews.” Here’s an excerpt from the article:

The tool lets advertisers match demographics and related searches for a particular site, or aggregate statistics for sites in the advertisers’ buying plan.

“This will expose many more sites that are much deeper into the Web,” Lin said. “It opens up data that wasn’t necessary visible before.”

Lin would not elaborate on specifics of how the data is pulled, but said that Google’s wide reach and powerful analytics would provide information on the long tail of the Web.

NebuAd’s CEO Discusses Online Targeting

“The latest in behavioral and contextual advertising technology enable marketers to personalize their messages to consumers by serving hyper-targeted and varied ad formats at every stage of the purchase cycle — ensuring that the right offer is reaching the consumer at the right time. New tools that measure engagement by the degree to which the user is engaged throughout the conversion cycle lets advertisers know what messages work. Rating systems that assign value to each consumer action throughout the funnel give advertisers a more accurate measurement of real engagement.”

Bob Dykes. NebuAd CEO. Imediaconnection. May 28, 2008

Google/Yahoo! Combine also raises questions about Publicis and WPP deals

Officials need to examine the recent deals made both by Google and Yahoo! with advertising agency powerhouses, Publicis and WPP, respectfully. The Google/Yahoo! combine reduces competition in the online ad sector, and these agreements need to be part of the analysis. Google and Publicis completed their deal last January “based on a shared vision of how new technologies can be used to improve advertising.” Last month, Yahoo! and WPP formed a “multi-year strategic partnership” that is connected to the online ad trading Right Media Exchange.

Search should not be considered a “natural monopoly,” as some cynics suggest. Nor should search by viewed as separate from display; increasingly the two are intertwined. Marketers desire cross-platform strategies. Perhaps that’s one reason Google is hiring cross-platform ad specialists. To quote from a Google job posting: “The Cross Platform Solutions team forms partnerships with advertisers and agencies to build brands online. We strive to deliver the most efficient and effective digital platform upon which the world’s leading brands are built. We connect advertiser’s brand messages to their target audience through innovative, precise and accountable online marketing solutions whose reach can extend around the world.”

It’s hard to keep up with the online ad world, so it’s not surprising that regulators have been slow to address the critical consumer and competition issues. But much is at stake in how diverse and consumer-friendly the new media world will become. That’s why the DoJ and the Hill need to look at these ad agency deals, among other issues we will discuss soon.  Btw, privacy is a serious issue in the deal, no matter how Yahoo! may be spinning it.

Trade Analyst on Google/Yahoo!: Google becomes “monopolistic gatekeeper”

From Diane Mermigas June 18, 2008 column in Online Media Daily [excerpt]:

excerpt: The deal puts more than 90% of the search ad market in Google’s hands, and raises the likely prospect that Google and Yahoo will work together on display ads. Executives from both companies have suggested as much, calling the partnership “good for competition;” when they should have said that it is “good for the competition.” The deal is a Trojan horse that makes Google the monopolistic gatekeeper, sucking the democracy and free capitalistic process out of advertising and e-commerce. The nonexclusive clause in the deal seems meaningless…Deutsche Bank, CitiGroup and Merrill Lynch are among investment banks reducing their estimates on Yahoo in anticipation of its advertisers shifting their business to Google. “This effectively signals the end of Yahoo’s competitive entry in the paid search business and signals to advertisers /agency customers to simply work with Google to purchase ad impressions from Yahoo longer term,” said Deutsche Bank analyst Jeetil Patel.

Watch out for those data-collecting “brand builder” widgets!

excerpt from Technewsworld: “…pairing widgets with behavioral analytics creates a sea change in the iterative marketing process. Emerging sophisticated analytics tools for widgets and social applications now give marketers unprecedented capabilities to reach out and track engagement within the consumer social networking environment. As a result, widgets and social applications may well become the most powerful brand builder of all for online marketers.

While most widget platforms that target the professional market provide analytics, some go a step further by giving marketers access to detailed interaction metrics, including time spent with the widget, number of viewings at the component level, rollovers, clickthroughs, pass-alongs, postings, and mass distribution. Brand awareness and recall, difficult to measure in traditional advertising without focus groups and surveys, can be measured at a granular level by analyzing widget engagement levels…By tracking posting, sharing, and viral hotspots, widget analytics provide specific metrics regarding a consumer’s actual and potential influence and his value on the engagement ladder…

With advanced widget analytics, marketers can identify, profile and reach out to opinion leaders within social networking communities. These influencers might be missed when tracking purchase history or Web site page views, because they may not be frequent or large dollar value purchasers. Instead, these opinion leaders influence their network of family, friends and associates by passing along content, posting it to their blogs or profile pages, or reviewing and rating it.”

Ad Biz Looks Critically at Google/Yahoo! Pairing

Just some excerpts from today’s coverage, to give policymakers and the public a sense of how the 10 year pact is viewed from inside the ad industry.

First, from Ad Age: “Yahoo is outsourcing search monetization to Google in a 10-year deal, the companies officially announced tonight. But advertisers see less competition and higher prices…But the agreement… doesn’t necessarily protect Yahoo from the possibilities that the deal will erode its search business in the long run or make Google an even more dominant player. When Google search ads are mixed in with Yahoo search ads for a particular search query, Google will almost always win the better placement… And if Google consistently wins, marketers may be less inclined to bother using the Yahoo system, instead choosing to put their optimization efforts toward a single system.”

Yahoo, Google Strike a Deal on Paid Search. Abbey Klaassen. Ad Age. June 12, 2008 [sub required]

Online Media Daily: “…some in the industry have questioned whether Yahoo brass thought about the repercussions of the deal in terms of competition and advertiser perception in the mid- to long-term.

“I think the financial rationale is pretty clear,” said Bryan Wiener, CEO of 360i. “But $450 million is a lot of money, so it can’t just be all tail terms that Google will be serving. I can’t imagine that there won’t be some very valuable commercial terms in that mix.” Wiener said that if advertisers no longer saw the value in buying keywords directly through Yahoo, then fewer companies would end up using (Yahoo’s Search Advertiser Platform) Panama in the long run.

According to Neeraj Kochhar, vice president/director of SMG Search, there are definite concerns among advertisers. “I don’t see this as a positive move in terms of competitive activity,” Kochhar said.”

Final Microsoft Rebuff Sends Yahoo into Google’s Arms. Tameka Kee. Online Media Daily. June 13, 2008 [reg. required]

Stephanie Clifford of the New York Times has a good blog post on advertising industry concerns about the deal.

From the Los Angeles Times, 6/14/08:  “The consolidation of everything under Google is not good,” said Aimee Reker, global director of search at digital agency MRM Worldwide. “It will aggregate so much power and control in one place that it no longer is an open marketplace.”

Congress and Anti-trust Officials Must Take Action on Google-Yahoo! Deal: Competition and Privacy Issues at Stake

The government must take swift action to prevent the creation of a digital combine that merges assets and services of the first and second leading online search advertising companies—Google and Yahoo!
Google is the country’s (and world’s) leading search firm. Yahoo is ranked number two and says it is the foremost online display advertising company. This combination potentially threatens user privacy, as more data (including behavioral and mobile) about consumers are shared or pooled by the two leading online giants. Competition in the online ad sector—already weakened by a series of takeovers and acquisitions—is seriously threatened. This deal will have a significant impact on the advertising industry, including agencies. Both Google and Yahoo also provide critical search advertising services for many of the nation’s leading newspapers. Congress will need to explore how this deal impacts journalism, especially at a crucial marketplace juncture for the traditional media industries. Yahoo is permitting Google to extend its reach into one its significant assets–paid search. Shareholders will also suffer, as Yahoo! will be viewed by advertisers as a less effective means to target consumers.

Statement on behalf of the Center for Digital Democracy

Hasn’t Google Heard of Separating Content from Advertising? YouTube Fostering Stealth Infomercials

Google is now permitting creators of YouTube content to sell their own ads (with a split going to Google). But what’s alarming is that some of the videos on YouTube are being produced in cooperation with advertisers, including featuring its products in the program. For example, Advertising Age reports that “Revision3, the online-video-production company…is selling advertising on YouTube, starting with GoDaddy, a sponsor that’s regularly integrated into the content of its shows.” Revision3’s website explains that “it has attracted a wide-range of top advertisers including Sony, Netflix, Dolby, Microsoft, IBM, HP… Verizon and FX Networks. Advertisers enjoy a unique bond with the audience via customized message integration and host mentions that deliver phenomenal results.” Revision3 lists among its “success stories” the following:

“Verizon VCast: As part of its launch of a mobile phone-based streaming video service, Verizon sponsored Diggnation. As part of the sponsorship, the hosts interacted with the VCast service during an episode, and discussed how the service worked and what it did. Awareness skyrocketed. According to Amanda Donelly, the Media Supervisor at Verizon’s agency Moxie Media, the results were “seriously way better than we had ever anticipated”.

Congress, the FCC, FTC, and media reform advocates will need to address the purposeful blurring of content and advertising in online video (broadband and mobile). But industry also must enact meaningful rules regulating such practices. That’s where Google comes in. As the global online advertising market leader, Google needs to set the highest standard for ethical business behavior. Enabling stealth informercials guised as entertainment tarnishes the reputation of YouTube.

source: “YouTube: You Created the Content, Now Sell the Ads.” Abbey Klaassen. Advertising Age. June 9, 2008 [sub required]