Yesterday, the FTC sent out a release announcing its November town meeting on online advertising and privacy. The hearing is in response to the formal complaint my group Center for Digital Democracy and the USPIRG filed last November.

It’s clear that the FTC is fearful of really tackling the privacy and consumer-manipulation problems intrinsic to the online ad field. Behavioral targeting, which we also address in our complaint, is just the tip of the proverbial data collection and target marketing iceberg. Policymakers at the FTC, the Congress, and state A-G’s must do a better job in addressing this problem. Chapter seven of my book covers the topic, along with recommendations. As we noted in our statement yesterday, CDD has given the staff at the FTC a ton of material since November, further making the case for immediate federal safeguards. There is so much at stake regarding the future of our (global) democratic culture and its relationship to online marketing. We hope others will join with us and raise the larger societal issues, in addition to the specific online ad marketplace concerns.

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Google Expands its Behavioral Targeting for Interactive Advertising

excerpt via ClickZ, July 31, 2007:

“Many have expected the behavioral targeting shoe would eventually drop at Google, and now it has. Technically, anyway, though a new behavior-based ad system enhancement from the company’s ad quality group doesn’t resemble the segmentation-based approach to behavioral targeting most marketers are familiar with.

A few weeks ago, Google began delivering ads based not only on the current search, but also on the searches immediately preceding it, and sometimes a combination of more than one recent query, according to Nick Fox, Google’s group business product manager for ads quality. Fox told ClickZ this week that the feature, which has no official name, aims to capture a more robust understanding of user intent and thereby deliver a better ad.

“The current query the user is issuing is pretty useful, but in some cases it misses the context of what the user is doing,” said Fox. By studying the larger context of queries relating to a consumer’s “overall task,” he said, Google can boost relevance…

Fox doesn’t like the term “behavioral targeting,” partly because it’s a loaded phrase in marketing and privacy circles. Additionally, he said, Google’s intent-based approach doesn’t employ the audience segmentation favored by Tacoda, Revenue Science and other behavioral targeting tech firms, not to mention BT-friendly media sites like Yahoo, that serve ads based on recent Web pages seen…

Google introduced the feature without fanfare, and most if not all marketers whose ads are affected by it have no idea the targeting is taking place. That’s true to form for Google and potentially irritating to advertisers, according to Anna Papadopoulos, interactive media director for Euro RSCG 4D…

Papadopoulos also finds it remarkable that Google has changed its tune with regard to behavior-based ad serving.

“I think it’s a total turning point for them,” she said. “Now I’m curious how they’re going to handle this for AdSense. They were pretty steadfast about not wanting to play in the behavioral targeting space.”

Google didn’t immediately respond to questions about where else on the Google network the company might consider delivering ads based on consumers’ prior search or surfing behavior. But it’s something the company opened the door to some time ago, according to Dave Morgan, founder and chairman of Tacoda.

“As an observer in the market, certainly Google’s move into behavioral targeting appears to have been happening incrementally over the past couple years,” he said. “Certainly they’ve modified their privacy policy over time to permit it.”…

Google’s new ad quality feature uses referrer information rather than cookies to track user queries at this time, Google’s Fox said. In most cases the ads will only appear to users for searches performed back-to-back or “within seconds or minutes of each other.” He added the company is looking at other possible tracking and targeting methods to capture “full intent,” including, perhaps, cookies.”

source: “Google Targets Search Ads on Prior Queries, à la Behavioral.” Zachary Rogers. ClickkZ.

excerpt from a Q and A on online ad exchanges:

“8. How can advertisers target their ads?
The DoubleClick Advertising Exchange service has one of the most
sophisticated and broad set of targeting options available. The exchange
supports standard online targeting elements including time of day, day of
week, user location, et cetera. In addition, buyers can target using
DoubleClick’s proprietary solutions including a three-tier content
categorization, site genre and site maturity. Buyers can target
participating sites by name or, alternately by using IDs, target sites
that are participating anonymously. The exchange also allows buyers to
leverage their own data by targeting based on their own user information.

9. What differentiates your ad exchange from other ad exchanges?

* Seamless integration: DoubleClick Advertising Exchange is tightly
integrated with DoubleClick’s existing DART ad management platform,
enabling yield maximization across sales channels for sellers, as well
as shared creatives, advertisers, Spotlight Tags and audience
targeting for buyers…

12. Can your ad exchange service be integrated with other ad management
platforms?
DoubleClick Advertising Exchange is tightly integrated with DoubleClick’s
existing solutions. Integration with DoubleClick’s ad management platforms
— including DART® for Publishers and DART® Enterprise — enables it to
deliver unique benefits such as dynamic allocation, which helps publishers
automatically determine how to generate the highest return for every
impression. In addition, DoubleClick Advertising Exchange is integrated
with DART® for Advertisers, allowing for shared campaign management
elements including creative, advertisers, user-lists and spotlight
tracking tags.”

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What Google should have said about “Why we’re buying Doubleclick”

Why can’t Google admit to its real reasons for acquiring Doubleclick? It’s not truly candid recent post (by Group Product Manager Alex Kimmier) dodges the key issues. If Google can’t be more honest—and at least admit to real public policy concerns—it’s a strategic blunder (let alone an example of a corporate culture where candor isn’t truly valued). So first, this “official” Google blog should have admitted that there are real privacy concerns with the merger. When you merge the number one online ad search firm (Google) with a leading provider of cookies for display advertising (Doubleclick), in a medium where revenue generation is all based on the collection and targeted use of personal information, the deal rings five-alarm privacy alarm bells. It’s unbelievable—and frankly disquieting—that Google can’t admit this is an serious issue with its proposed $3.1 b takeover of Doubleclick.

Google is also being disingenuous when it discusses the online ad business. For example, in the post it lumps itself together with Yahoo! and MSN when discussing the 40% market share search ads have in the overall online ad market. But the official blog should admit that it’s far and above the dominant force in the search market, both in the U.S. and abroad (with a 64% market share in US search, leaving Yahoo and MSN trailing at 22% and 9% respectively.) It should acknowledge that the one part of the online ad market they don’t yet dominate is display advertising. Through it’s acquisition of Doubleclick, Google will be able to quickly expand its dominance to the rest of the market. It’s not about, as its blog suggests, creating a more “open” platform that can “improve online advertising for consumers, advertisers and publishers.” It’s about tapping into Doubleclick’s blue-blooded client list of Fortune-type companies so Google can better digest that vital part of the online ad market.

But beyond online ad consolidation, we wish to return to privacy and targeting. No matter how useful Google is helping to identify key sources of information, it’s not in the best interests of a democracy to permit a private gatekeeper of so much (continually updated) personal data. Google’s business is advertising: it will do what it must to collect information about each of us so it can personally target us wherever we are. Online advertising is a very powerful medium, utilizing technologies designed to affect our behaviors [pdf] in a variety of ways (including so-called immersive targeting). Google’s expansion—and its apparent inability to acknowledge key civil society concerns—should be part of the media reform debate.

FTC and Hill: Remember Doubleclick Acquiring Klipmart Last Year!

One of our messages to policymakers is that there has already been significant consolidation in the online targeted ad market. Once Google swallows Doubleclick, what little hope for any meaningful competition will disappear. So we think it’s useful to remind regulators about Doubleclick’s take-over—just last year–of online ad firm Klipmart. As clickz reported in June 2006:

DoubleClick has acquired video ad specialist Klipmart, and will combine the company’s technology and services with its own DART Motif rich media platform.

The deal, for which terms were not disclosed, brings DoubleClick a step closer to legitimacy as an end-to-end solution for rich media advertising, particularly since Klipmart ranks among the more sophisticated providers of video production services, an area where Motif is historically weak.

Meanwhile, Klipmart should benefit from DoubleClick’s democratic appeal to marketers, who for budgetary reasons may previously have shied away from the video vendor’s reputation for high-end deployments.

With the acquisition, DoubleClick now employs 100 in rich media. In its announcement, the company said it will soon launch an “Innovation Lab” focused on taking video to multiple digital platforms…

Klipmart is known for creating smooth user experiences for in-stream and in-page video ads, and for providing good customer service to agencies and advertisers. The company pioneered full-screen expansion of video ads, and publishes all video in multiple codecs to maximize the addressable audience.

“Klipmart has a superb reputation of creative video innovation and service,” said David Rosenblatt, CEO of DoubleClick, in a statement. “Combining these strengths with DoubleClick’s industry leadership, insight and global ad management platform will truly accelerate industry innovation in digital video and emerging advertising formats.”

Google Buys More Lobbyists and Influence

excerpt from Washington Post: “…Google went on a hiring spree and now has 12 lobbyists and lobbying-related professionals on staff here — more than double the size of the standard corporate lobbying office — and is continuing to add people. Its in-house talent includes such veteran government insiders as communications director Robert Boorstin, a speechwriter and foreign policy adviser in the Clinton White House, and Jamie Brown, a White House lobbyist under President Bush.

Google has also hired some heavyweight outside help to lobby, including the Podesta Group, led by Democrat Anthony T. Podesta, and the law firm King & Spalding, led by former Republican senators Daniel R. Coats (Ind.) and Connie Mack (Fla.). To help steer through regulatory approvals in its proposed acquisition of DoubleClick, an online advertising company, Google recently retained the law firm Brownstein Hyatt Farber Schreck.”

from: “Learning from Microsoft’s Error, Microsoft Builds a Lobbying Engine. Jeffrey H. Birnbaum. June 20, 2007

PS: And that’s before Johanna Shelton, former aide to Rep. John Dingell and FCC Commissioner Adelstein, starts working for Google on Monday!

Google Loves Our Data! Let Us Count the Ways…

As admirers go, Google is definitely of the secret variety. From its highly guarded formula for generating search results, to the shroud of mystery that surrounds its plans “to organize the world’s information and make it universally accessible and useful,” to a complex privacy policy that is spread over 20 separate pages on the Web, the search giant invariably raises more questions than it answers. “Don’t be evil,” reads the company’s motto, but apparently it’s OK to be evasive. “It’s somewhat of a paradox,” financial analyst Jordan Rohan told the Los Angeles Times last year. “Google’s whole purpose is to make information easier to access—unless, of course, you want to know information about Google.” As the Times added, “Google’s unwillingness to disclose little more than the legally required basics of how it does what it does—and where it’s headed—has left advertisers puzzled, partners confused, competitors nervous and investors frustrated.”

Make no mistake, however, this secret admirer really does care about us. Why else would Google give us so much—lightning-fast search results, interactive maps, email service (with plenty of storage space to archive our communications), online calendars, word processing programs, spreadsheet applications, and more—all free of charge?

The answer, of course, is that Google actually gets plenty in return, in the form of massive amounts of data that it compiles on consumer interests, tastes, and behavior. For all of its variations on the search engine theme—from Google News to Google Video to Google Product Search—the company remains above all else an advertising engine, one whose $500 stock price and $700 billion revenues are testaments of its success.

So how does Google love us? Let us count the ways, with a sampling of the kinds of user data to which Google currently has access:
1. The keywords and phrases we use in the searches we perform.
2. The time and date of these searches.
3. Our Internet IP address and browser configuration.
4. The websites we visit as a result of these searches.
5. The amount of time we spend on those sites before returning to Google.
6. Our patterns of navigation as we travel away from and back to Google.
7. The addresses and directions we enter in Google Maps.
8. The messages we send and receive via Gmail or Google Talk.
9. The schedules we create on Google Calendar.
10. The documents we create and edit in Google Docs.
11. The figures we enter in Google Spreadsheets.
12. The sources we subscribe to in Google Reader.
13. The accounts we create and the information we post to Google’s far-flung Web properties, including Blogger, Orkut, and YouTube.
14. The activities we carry out using a variety of Google-branded “helper” applications, including Google Desktop, Google Toolbar, Google Checkout, Google Web History, and Picasa.

“Google has been aggressive about collecting information about its users’ activities online,” observed Adam Cohen in the New York Times. “It stores their search data, possibly forever…. Its e-mail system, Gmail, scans the content of e-mail messages so relevant ads can be posted. Google’s written privacy policy reserves the right to pool what it learns about users from their searches with what it learns from their e-mail messages, though Google says it won’t do so. It also warns that users’ personal information may be processed on computers located in other countries.”

The lynchpin in Google’s vast data-dragnet is the small text file placed on the user’s hard drive, known as a “cookie,” stamped with a unique user ID and passing information back and forth between one’s PC and a particular website. “Google was the first search engine to use a cookie that expires in 2038,” explains Google-Watch.org. “…This cookie places a unique ID number on your hard disk. Anytime you land on a Google page, you get a Google cookie if you don’t already have one. If you have one, they read and record your unique ID number.”

As if Google (with its billions of searches and millions of users it serves every month) doesn’t already know enough about us, its proposed $3.1 billion acquisition of DoubleClick will bring online consumer surveillance to an entirely new level. DoubleClick might not be the household name that Google is, but in its field—online advertising—it is perhaps even more dominant, reaching an estimated 80 to 85 percent of all Web surfers with some 720 billion ads a year. Its consumer analysis, profiling, and behavioral targeting technologies, carried out on a vast network of affiliated websites, are extraordinarily thorough. “Without a doubt, DoubleClick’s historical data is very valuable,” says Jupiter Research analyst Emily Riley. “Every time you’re online, every page visit, and every ad you see comes with the possibility that a cookie is placed on your machine. DoubleClick has all the data.”

And soon Google will have access to all of that data as well. DoubleClick’s DART system, for example, will provide Google with a complete set of applications—and data access—to allow it to extend its more linear search advertising business into the third-party and rich-media advertising market. Another of DoubleClick’s key technologies, called Motif, is used to track user interaction with video content. As the search and online video markets converge, the ability to identify and assess user response to interactive media environments will be central to online advertising. Google’s interest in such technology was no doubt fueled by its $1.65 billion acquisition of YouTube in 2006. Google is now in the process of “data-tagging” all of the videos on YouTube in order to make the site a much more effective platform for advertisers.

A combined Google and DoubleClick, clearly, will be a potent force in the online universe. As the New York State Consumer Protection Board recently declared, the Google/DoubleClick “merger presents significant privacy implications. The combination of DoubleClick’s Internet surfing history generated through consumers’ pattern of clicking on specific advertisements, coupled with Google’s database of consumers’ past Internet searches, will result in the creation of ‘super-profiles,’ which will make up the world’s single largest electronic repository of personally and non-personally identifiable information.”

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Privacy Int’l: Google Rep May Have Engaged in “Smear” Campaign

Privacy International, the respected global NGO working on a broad range of privacy issues, sent a letter to Google CEO Eric Schmidt on June 10, 2007. A Google representative allegedly contacted at least two journalists suggesting that Privacy International had a conflict of interest in how it determined its new rankings on consumer privacy (Google came out at the bottom of the list). This incident, if true, underscores our assessment of Google at the moment. It’s zealous desire to dramatically expand its online advertising business (which generates all of its profits) is contributing to a corporate culture that is blind to issues related to privacy. There’s a balance here, I suggest, where individuals are guaranteed their rights and digital commerce can simultaneously grow. But Google must become a leader in this area. If it is dragged digitally kicking and screaming down the privacy path, it will lose support in the marketplace. The time for real corporate leadership is now. Egos and ambition are no excuse for not engaging in serious corporate and civic responsibility.

An Ad Industry Perspective on a Google “Monopoly”

via NMA [sub required]:

Letters: Google fails to answer monopoly concerns

“Google UK MD Dennis Woodside failed to address the concerns of Microsoft and much of the online industry that it’s creating a monopoly within the online ad industry (NMA 19.04.07).

First, it’s no use his referring to the fact that online has only 11% of the overall ad market. That’s irrelevant as we’re only concerned about a monopoly being created within the online ad market.

Second, he says advertisers can choose to place their campaigns elsewhere. But nearly all large newspaper and magazine publishers use DoubleClick ad serving products, so Google will have complete control, or at the very least will be able to see who’s spending what with who down to campaign level.

Also, DoubleClick has at least 50% of the agency third-party ad serving market. Now that Google has acquired this, it can dominate the online display market within the media agency area as well as search.

The key argument is that there aren’t “plenty of opportunities”, be it in online display media or technology, to avoid Google’s spreading tentacles.”

Phil Nott, sales director, Adrevenue
NMA magazine | Published: 07.06.07