Category: Web 2.0 & Democracy

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

IAB’s Lobbying Against Privacy Safeguards: Trade Group Will Add New Members to Help Fight Consumer Protection Legislation

The trade lobbying group Interactive Advertising Bureau (IAB) plans to add new members to help it generate “grassroots support against proposed legislation in New York and Connecticut that would ban the collection of data about online consumers without a person’s specific consent.” According to ClickZ, the IAB will create a new low-dues membership structure which will enable smaller online advertisers to swell its ranks. What is IAB’s pitch to its prospective members about privacy safeguards offered by state legislators in New York and Connecticut? ClickZ says that “[T]he IAB contends that the proposed measures would have a disproportionate negative impact on small publishers that rely on ad networks to manage advertising sales.”

The IAB’s leadership is off on a irresponsible mission to persuade online marketers and the public that privacy rules would “kill the web.” Such an self-serving view of why privacy rules are required in the age of online marketing will only further diminish the credibility of the IAB.

Opposition to Google/Yahoo! (or other mergers) Should be Based on Principle: Digital Pawns in Play?

Yesterday, we were contacted by a reporter asking our position on the possible Google/Yahoo! search advertising deal (we are opposed to such an arrangement, on both competition and privacy grounds). When we read the story online, we learned that one of the groups sending a letter to the DoJ was the Black Leadership Forum. That raised our concern, since we know that the Black Leadership Forum has had relationships with phone and cable companies. It has also, in the past at least, worked with Issue Dynamics (a company which helps phone, cable and other interests “organize” support from not-for-profit groups. I cite Issue Dynamic’s role with the Black Leadership Forum on page 75 of my book.).

We have not read the letter to the DoJ. Nor do we know of any financial or other relationship between the Forum and any of the many interests who are fighting Google (phone and cable companies, for example, are opposed to Google’s positions on network neutrality). But we believe that all financial relationships, even from the recent past, need to be identified. I know this is Washington, where too many people “lease out,” as we say around my office. But there are important issues at stake with the new media marketplace. Reporters will need to do more to identify whether there are financial and other relationships with groups from Google, Microsoft, phone and cable, etc. But the real focus should be to examine the state of competition in the online ad market–and what it means for the future of communications in the digital democratic era.

Services to protect advertisers online from appearing next to "inappropriate" broadband content emerge

TV networks and ad agencies have long had a system in place to make sure programming doesn’t conflict with the interests of its key audience: advertisers. Network standard and practices departments reviewed entertainment programming to make sure a marketer–or the network–wouldn’t be embarrassed by the theme or content. We are beginning to see such practices emerge for the online medium. For example, last year Feedburner [now owned by Google], the leading ad service company for blogs, began a service called “Adclimate” that “suppresses when an ad would be served in an RSS item or blog post containing keywords that an advertiser has pre-selected as inappropriate for their brand…FeedBurner’s AdClimate was developed to meet the needs of its advertisers in a rapidly developing market. This capability addresses advertisers’ apprehensions about their brands appearing within distributed media. Controlling ad targeting based on advertiser-selected keywords provides peace of mind and additional control.”

Now there are similar services for the burgeoning world of broadband video. ScanScout, for example, says it offers advertisers “brand protection.” The company asks: “How can advertisers be assured that their brand messages will only be seen adjacent to the most appropriate content?” That’s where “ScanScout’s Content Matching technology” comes in, because “[I]t ensures that the right ad is shown to the right user at the most opportune time.
Brand Protection: ScanScout technology is designed to ensure that advertisers’ brand messages will only be seen adjacent to the most appropriate content.”

ScanScout explains that (its emphasis) “rich content scanning is deeper and more precise than anything ever introduced, creating algorithmic intelligence about each video and each user’s behavior, enabling far better matching than ever imagined…”

Much is said about the important role of advertising supporting the diverse array of online content. And it’s true that we have tremendous content diversity and advertising plays a key role. But just as advertisers shaped radio, broadcast television and cable that helped undermine their public interest potential, we suggest that much more analysis and debate is needed to explore the ultimate impact of advertising on the future of the digital ecosystem.

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Randall Rothenberg of the IAB cries digital wolf

Mr. Rothenberg, head of the trade group that represents interactive marketers, is in a tizzy because privacy, consumer advocates, and some lawmakers in the U.S. and EU advocate public policies that would empower citizens and consumers to have greater control over their data. Groups such as my CDD also want online marketers to inform users about the range and intent of data collection taking place. Anyone who has studied the online ad industry and is following it should be disturbed by many of its developments and directions.

There needs to be a serious and honest debate about all this–and rules enacted to protect the public. As more people realize the dimensions of the interactive marketing system and its implications, there will be a raising protest. We expect that when the EU’s Article 29 Working Party, made up of data privacy commissioners, issues its report on behavioral targeting, it will be an informed and thoughtful discussion of what must be done. Given the henny-penny approach Mr. Rothenberg has embraced to fight off consumer protection safeguards, we assume he will ask Congress to formally break diplomatic relations with `old’ Europe!

This is a serious issue, with ramifications affecting consumer welfare in a number of areas, including information they receive about pharmaceutical products, personal finances (such as mortgages) and with our children and adolescents. As I’ve said, we recognize the vital importance of advertising for the online medium. But it must be transparent, respect privacy, and operate fairly. The global digital ecosystem must evolve, as much as possible, in the most open and democratic manner.

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U Penn Prof. Joseph Turow responds to the

Randall Rothenberg of the Interactive Advertising Bureau lobbying group wrote a commentary where he made a number of misleading statements. He incorrectly characterized the work of Professor Joseph Turow. Prof. Turow, a leading academic expert of the online marketing industry, is on the faculty of the Annenberg School for Communication, University of Pennsylvania. Here is Professor Turow’s response:

“In one sentence, Mr Rothenberg manages to make two fundamental misrepresentations. What I really say on page 2 of my 2006 book Niche Envy (where the quote originates) explicitly relates to marketers use of surveillance technologies without consumers understanding: “Over the long haul, however, this intersection of large selling organizations and new surveillance technologies seems sure to encourage a particularly corrosive form of personal and social tension.” Nor do I anywhere lament the passage of the three network universe. For example, I explicitly state in Breaking Up (on page 199, for example) that three network era had its own forms of social exclusions and state that “that “the proper response to this hypersegmentation of America is not to urge a return to the mass-market world of the 1960s and 1970s.” My conclusion: when I see Mr Rothenberg quote someone I will be sure to check the source to make sure the passage has not been wrenched from its context. I should add, too, that I accept the need that digital interactive media have for target marketing and database marketing. But there are many creative ways to meld data analytics and their implementation with openness and public engagement. I fear that Mr Rothenberg”s policies and writings indicate he will lead this important organization in directions that are misguided for marketers and for society.

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Former journalist and now online ad industry lobbyist Randall Rothenberg, in a BusinessWeek commentary, suggests that the call for privacy rules ensuring individuals have control over their data will undermine the Internet. You would think a Madison Ave. trade group could craft more creative PR copy. But the online ad industry’s position is indefensible, since they built a system based on the harvesting of our information without believing they would need to get our permission first. The IAB board should realize it has embarked on a very dangerous campaign here that will undermine credibility for many marketers. Here’s my response submitted to BusinessWeek:
Mr. Rothenberg, as head of the interactive ad trade group lobbying against the call from consumer groups for the government to protect personal privacy online, fails to address the central question regarding online advertising. The call for regulation is designed to ensure individuals control their data while on the Internet or using their mobile phones—not companies such as Google, Microsoft, and AOL. Public interest groups are not opposed to interactive marketing: indeed, we recognize it as a key source of funds for online publishing. But Mr. Rothenberg’s members have created a commercial surveillance system that rivals the NSA—tracking and analyzing our every move while on the Internet, all so we can be encouraged to behave favorably to some marketing message. Responsible ad industry leaders will seriously address the privacy threats created by the interactive marketing apparatus—and not hide behind self-serving claims that unless our privacy is lost, we won’t have a robust digital medium.

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Google as “media company” & favoring its own sites–a report from a search engine trade show

John Battelle was on a panel at the recent Search Engine Strategies (SES) conference in New York. Here’s an excerpt from his blog post–which I hope you will read in full [our emphasis]: Google’s brand promise – to be neutral, to be above monetary interest – is in conflict with, well, the rest of Google’s brand promise, to be a superstar stock, to grow faster than any company in the history of the world. And all of that is in conflict with …. Google’s brand promise, to get consumers to the best answer, fastest, regardless of who owns the content. Because…sometimes, that content is now owned by Google…Why when you search for stocks does Google Finance come first? Let’s be honest here. It’s not because some neutral algorithm chose Google Finance. It’s because Google owns that data. Google’s representative admitted as much on our panel today. And, given that, can one reasonably ask why, according to Comscore’s data, the preponderance of results that come up in Google’s universal search are YouTube? Might it be because they are they best results? Sure. Might it also be because Google owns YouTube, which is madly trying to monetize the second, third, and fourth click with new models that it hopes to heck are going to pay off?

AOL’s Privacy “Penguins”–Time Warner Skating on [Very] Thin Consumer Protection Ice

The senior management over at Time Warner must be `in treatment’ with some of their Looney Toon characters. How else to explain the ludicrous use of cartoon penguins that will soon be deployed to really misinform consumers about how and why their data and personal information are being collected and harvested for microtargeting purposes. It’s really shameful that the Time Warner, its Platform A targeting service, and the AOL division are hiding behind these well-liked creatures. But they are doing so because the company doesn’t want to be honest with its users. What Time Warner should be telling consumers are some of the things it pitches to perspective and current advertisers. For example, it should tell consumers that they are being tracked and followed online so advertisers will know they are “demonstrating a specific behavior.” Or that it’s “an advertisers dream–the ability to target consumers…across thousands of websites…[while they] research their options…Through behavioral targeting–and retargeting–we keep your brand top of mind during this crucial consideration phase.” Or that when we are watching online video, Time Warner informs advertisers that it can tell them “[H]ow long did consumers view your ad? Did they visit your website as a result? Better yet, did they visit your store? Online video takes the best of TV and the best of online to create the ultimate solution–high-impact advertising with measurable results.”

Or that it can help them get “leads” for future pitches (think mortgage loans, etc). Will AOL’s Penguin say that it will give marketers “a high-volume” of leads that will “convert into an actual customer…that perform best for your goals.” Or that it can identify our behaviors and then place us for sale as part of consumers profiles to be targeted (such as whether they consider us to be a “Traveler, Health Seeker, Entertainment Buff, Auto Intender or Trendy Homemaker”), which include information about whether we have children at home, how much money we make, or our gender? I hope our Penguin will be telling consumers (and the FTC and the EU’s Article 29 Working Group) that its “insight Reports” provide marketers with “deep knowledge” [our emphasis] “[B]y combining TACODA behavioral segments with comScore’s MediaMetrix® database of online consumer demographics, Web site visitation patterns, and eCommerce buying power index, TACDOA is able to discover previously unknown key behavioral traits that may be non-intuitive and even counterintuitive behaviors. Our pre and post campaign analyses will help you identify your strategically important audiences in a snap.”

When asked to testify before Congress, as it debates privacy safeguards, we hope Time Warner’s Penguin will be able to explain its “Audience Point” service, which promises advertisers that they will be able to “[R]each the right audience….without waste…the first precision targeting solution giving audiences direct interaction with their likely customers.” Or that Time Warner, via Leadback.com, promises to “helps you reach your site visitors after they exit your site – reinforcing your brand positioning and driving users back to your site to complete a desired action. LeadBack.com – converting browsers into buyers, and buyers into repeat buyers.”

Time Warner and the online ad industry have to be honest with consumers and citizens. They shouldn’t engage in playing games when it comes to protecting privacy. Here’s the real penguin Time Warner and AOL should be using:


The Penguin, as seen in Detective Comics