Category: FTC

Rules Required for Data-mining and Consumer Protection: A good offer for you– but not for your neighbor!


As Congress and the FTC focus on 21st Century consumer protection safeguards to address the digital marketplace, a guiding principle should be accountability and transparency.  Advanced computer systems for both business and government far out-strip the ability of a single consumer to understand–let alone control–how their information is collected and used.  We need to have fair marketing rules so some people–because of their income, where they live, what the spend and what on and especially–race/ethnicity–find themselves confronting the emerging discriminatory web.  Take what Stream Base Systems does for e-commerce–and ask yourself: wouldn’t you want to understand how such real time data tracking and mining is used to determine prices and offers made for you? [excerpt]:

As Internet transactions and data volumes continue to skyrocket, more and more traditional eCommerce and Web 2.0 businesses need to monitor and instantly react to all user activity in real-time in order to ensure a positive customer experience, high customer retention rates, and greater profit…

  • Website Monitoring: With clickstream and transaction rates soaring, a growing number of high-traffic e-businesses are seeking to monitor and react instantaneously to website-generated real-time events. StreamBase enables e-Businesses to analyze and react to clickstreams in real-time, which in turn enables the immediate delivery of personalized cross-sell or up-sell offers, or online product merchandising customized to the real-time activity of site visitors.  By analyzing current web activity data and correlating this with stored customer history data, personalized offers can be generated that match the Web customer’s current interests and activity.


Facebook Places & Data: “Every single action people take…becomes an object in Facebook’s database.” $1.7 billion in ad revenues in 2011

From eMarketer on The Advertising Opportunity in Facebook Places [excerpt]: Facebook’s value as a business comes from all the bits of information it gleans about its users from their daily activities. Every single action people take—whether it’s writing a status update, posting a photo, commenting on a friend’s post, liking a marketer’s message or playing a game—becomes an object in Facebook’s database. Location is a type of data that is very compelling because it provides additional context for the actions people take on Facebook…If ads can be pushed to people in the moment they are engaged with something, rather than waiting until they take action and start a search, the ads become very very powerful.  Location will give Facebook a new way to target and sell advertising… By offering ways for marketers to target Facebook users not only on the online service but also when they are on the go and using Facebook on their mobile phones, it opens up all-new avenues for interaction.

“Tipping Point for Geo-Marketing”—Facebook Places (and what the Like Button already tells marketers)

You have to follow your data [and your friends and networks]–that’s how the money is generated in online marketing.  This article via DM News explains that:“…Facebook continues to gather more information about what people do and where they are – critical data for marketers. “What I find interesting is where people check in says even more about what they like. Now we’re actually looking at their real-world behavior, instead of just a button they click on a website,” he said [Augie Ray, senior analyst at Forrester Research]. “I think this really will continue to help Facebook offer much better targeting and permit marketers to do a better job of understanding their consumers and targeting ads at those consumers.  The very scale that Facebook Places creates is a welcome event for marketers, said industry professionals.  “I would say this is a tipping point for geo-marketing,” said Lawrence Kimmel, CEO of the Direct Marketing Association…Maria Mandel, VP of marketing and media innovation at AT&T Advanced Ad Solutions, agreed that the service makes geo-marketing much more mainstream. “It certainly brings location-based social media to the mass market,” she said. “It validates the relevance of the location-based check-ins and may offer substantial new opportunities for advertisers.”  Leveraging location may prompt innovative promotional campaigns, such as scavenger hunt contests, Mandel noted. There is also the scope to build long-term loyalty programs by rewarding people for checking in at certain locations to build toward prizes, offers or discounts, she said.

source:  Marketers See Potential in Facebook Places.  Shahnaz Mahmud.  DMNews.  August 20, 2010.

PS:  One social media marketing company writes that:  “…Facebook already provides marketers with a comprehensive list of your interests and favorite things with the integration of the Like button. Retailers, like Amazon, have already begun to leverage this information to create purchase suggestions for you and your Facebook friends…Now, with Facebook Places…[M]arketers can (and should) use this invaluable information to direct promotions and advertisements to consumers…This information is highly valuable as social media once again allows businesses to gain access to the exact niche of consumers they are striving to reach.”

Facebook Places, Brands, Ads & Data

We have been raising concerns about privacy and location data collection and targeting–including with our colleagues at USPIRG.  Facebook’s new location feature is designed to generate more user data that can be used by Facebook and its affiliates to bolster ad and brand targeting.  I want to excerpt this post from one of Facebook’s developers–Vitrue–which illustrates how soon companies like McDonald’s will work with Facebook to harvest local data and our behaviors:

“…A user will open up their mobile Facebook app and be able to see shops, restaurants, parks, areas, etc. that they are near.  They can then check-in to that location.  If a location doesn’t exist, the user can simply create it.  A story about where that person checked-in will be published to their profile and subsequently their friends’ news feeds…Facebook’s massive user-base is a distinct advantage and is likely to generate location-based activity orders of magnitude greater than other companies already in the space. As the leading social network, Facebook is able to capitalize upon the users existing friends, and use their collected demographic and preference data to show users places that it thinks is relevant to them, instead of just places nearby.

How Will Brands Take Advantage of Facebook Places?

With all of these users checking in to locations, what does that mean for brands?  Well if your brand has brick-and-mortar locations, your brand can claim these digital “Places”, turning the locations into Facebook Place Pages.

Brands can choose to merge a Facebook Place Page with an existing Facebook Page, if one exists, and if prompted– the option may not be widely available yet as Facebook is rolling it out over a period of days…

At this time Facebook does not recommend merging your Places with your Page if you are a national or global marketer with more than one location, like a McDonald’s or GAP.  They recommend managing the Places separately and have stated that a solution that will help these types of brands is planned for the future…Currently, Facebook CEO Mark Zuckerberg says they aren’t looking to monetize Facebook Places right now, but that doesn’t mean that they can’t in the future.   With Facebook collecting all of this location-based data, it seems like Facebook could allow brands to place highly targeted Facebook ads on the Places Facebook pages.  For example, if your brand’s products are sold in grocery stores, you could potentially place your ads on certain grocery stores’ pages to be viewed by people who’ve checked in.”

In another words, in the world of mobile and location ad targeting, our data will provide marketers with real-time sophisticated insights giving them a rich history of where we spend time and what we do [go to the bank, buy at the pharmacy, eat fast food, etc].  Such “360 degree” targeting, as the online marketers call it, require the appropriate privacy safeguards.

Google: Creating a “dynasty” in online data ad targeting

From the Connected Marketing Week in SF, via ClickZ:  Google is simultaneously attempting to fill the role of ad exchange, ad network, DSP (through its Invite Media acquisition), and media agency…Michael Rubenstein, president of AppNexus and the former head of Google’s ad exchange efforts, said Google has been admirably fair and transparent. But he said that could change.”Google is putting together the pieces to form a dynasty,” he said. “So far they’re behaving pretty well as far as keeping the ecosystem open to everybody, probably because they need to. But we’ll see what happens over time as they accumulate more market power.”

Leaving Your Data in Las Vegas: Facebook, Online Gambling & Privacy [Annals of behavioral tracking and targeting in online casino gaming and the need for safeguards]

The Las Vegas Casino the Golden Nugget has created a social game [take a look] on Facebook where, says DM News, users can “build their own Vegas casinos, including table games such as Blackjack, Video Poker and Roulette. As they earn virtual money, consumers can create their own customized furniture layouts and decorations by purchasing store items, as well as slots, tables and clothing for a consumer’s avatar. Players can also visit their Facebook friends’ casinos and build their avatar.”

It’s also about data collection:  “That is about data collection, as well as rewarding people who are playing the game,” [said a Nugget representative].  The game’s developer explained that it “will examine targeted behavioral gameplay data to help advertisers and to provide consumers with more compelling experiences.”

As Congress debates legislation that would okay online gambling, one of the key issues should be privacy.  What happens when a consumer is identified by a online casino or a Facebook that they gamble?  How does that get used in their online behavioral targeting profile, along with health and financial information?  Should we even permit the behavioral tracking of any user who engages with online casinos?  There are a host of privacy and consumer protection issues about leaving your data in Las Vegas–or with online marketers such as Facebook.

Google’s Mobile Ad Plans–A Key Reason Why No Net Neutrality for Wireless [Follow the Mobile Ad $$$]

Just a quick reminder to network neutrality supporters that Google has made a multi-billion dollar investment in its ability to deliver mobile ads.  That’s a key reason for its “let’s make a digital deal” with Verizon.  For example, in 2007 Google acquired  Doubleclick:“DoubleClick Mobile is an ad delivery system for mobile websites that delivers dynamic, interactive ads to mobile web pages based on specific criteria as determined by you. It supports a wide range of devices and boasts a full management and reporting suite. Now publishers can deploy mobile advertising with the same confidence and control as online display ads…DoubleClick Mobile enables you to manage and report on your mobile advertising campaign through every click. We’ve made it easy to set campaign dates, define mobile specific targeting criteria and get full reports on all mobile campaigns…records information on third-party destination sites…DoubleClick Mobile features support for a variety of ad networks to enable you to sell more of your inventory and maximize possible yield…”

This year Google acquired Admob:  “AdMob offers brand advertisers the ability to reach the addressable mobile audiences. Our innovative ad units will carry your brand messaging onto the top mobile sites. As one of the leading brand mobile advertising marketplaces, we have the products and the people to help you meet your campaign needs…Mobile advertising provides you with targeted access to mobile users, and is easy to buy and measure…AdMob stores and analyzes data from each ad request to serve the most relevant ad possible. AdMob Mobile Metrics offers a snapshot of this data to provide insight into trends in the mobile ecosystem.”

And don’t forget Google Adsense for mobile:  “AdSense for Mobile helps you earn money by displaying relevant Google ads alongside your mobile web pages or within your mobile applications.”  Or YouTube Mobile.

PS:  eMarketer got it right.  The Google/Verizon deal is about preserving mobile as a controlled digital territory: “By 2014, eMarketer expects the number of mobile internet users in the US to reach 142 million, a near tripling of 2008 levels. The total pool of internet users, which includes mobile and wired access, will increase over the same time period from 203 million to 250 million. By 2013, more than half of all US internet users will be accessing the web through a mobile network, either alone or in addition to wired usage.”

Online Ad Lobby Raising $1 Million to Help Fight Against Privacy Safeguards

The Interactive Ad Bureau [Google, CBS, Comcast, NBC, Facebook, Fox, Microsoft, BlogHer and many others] is fundraising to “undertake additional coordinated advocacy at the Federal and state level. IAB is nearly half-way to our goal of raising $1 million in cash…”  Funds will be used to support a campaign that includes “our ongoing advocacy efforts to combat legislation and regulation that could damage the interactive advertising industry.”  IAB calls this its “Consumer Protection and Education Campaign,” because it also includes a goal of a billion online ads (to be donated by marketers) used to “support consumer and business understanding and appreciation of the interactive advertising industry.”

We are sure that there will be many–such as the growing interest of the news media in the issue—that will follow this special interest money–especially as the Congress and FTC focus on protecting consumers online.

U.S. Consumers Targeted with 1 Trillion Display Ads in 2010, First Quarter

That’s right–a Trillion.  Think about all the data collected.  Facebook itself delivered 176 billion display ad “impressions,” explains comScore.  Yahoo and Microsoft sent 132 billion and 60 billion ads, respectively.  Leading online advertisers that quarter were AT&T, Verizon, Scottrade, Experian and others–so think about privacy, network neutrality, online financial marketing and consumer protection all together.  These issues are all connected.

Online Ad Industry Exec Warns of Dangers from “Targetocracy”/Urges IAB to Take Privacy Issue Seriously

We’re glad other online industry leaders see that addressing consumer privacy issues is required–instead of the denials coming from the IAB online ad lobbying group.  Doug Weaver, CEO for the UpStream Group writes in response to the IAB’s op-ed in USA Today, for example that:

“I think a sustainable privacy strategy begins with acknowledgment of the problem that exists.   Facts is facts: the “Targetocracy” in our business is big, wildly overcapitalized and a little bit out of control.  What I think consumers want to hear from Randy and the IAB is “we take the issues raised by the Journal very seriously.  The issues and the technology are quite complicated, but we remain committed to rooting out the bad guys and maintaining an environment that’s rich, free and privacy focused.”

As one of the IAB’s earliest board members and one who’s contributed a great deal of time and effort toward its mission over the years, I believe it’s time for the group to act less like the Chamber of Commerce and more like the Internal Affairs Department.  There are both rogues and careless polluters in our industry and their actions poison the environment for everyone.   Not everyone wants regulation, but the consumer wants to know someone’s in charge.  Who’s that going to be?