Category: European Commission

Google and WPP Fund Neuromarketing Research for Digital Ads: Ethical Issues and the Need for Policymaker Scrutiny [with an update on the grants!]

The Wall Street Journal and other publications report that Google and ad giant WPP will announce today the $4.6 million grants it will award for academic research designed to “improve understanding and practices in online marketing, and to better understand the relationship between online and offline media.” Among the research efforts given funds are projects that will “analyze internet users’ surfing habits to determine their thinking styles, such as whether they are most influenced by verbal or visual messages or if they are more holistic or analytical, and how to tailor ads accordingly” and an “analysis into how online ads effect blood flow to different areas of the brain. This research would seek to show the role that emotions play in decision making.”   Academics from MIT, Stanford, and Harvard will receive funds, among others. (And for those of us concerned about the role online advertising and data collection is playing in China–and impacts human rights and environmental sustainability–one of the new grants will fund “how Chinese web users respond to different online-ad formats, such as display and search ads”).

As we will tell the European Commission at the end of the month, at a workshop they have organized to discuss interactive advertising and consumer protection, the evolving role of neuromarketing with online advertising raises a number of troubling concerns–and should trigger a serious policy review.   We have not yet seen a final list of the grantees.  But Google should be funding independent research that will honestly explore the impact and ethics of online marketing.  They should be ensuring that the ethical issues of online marketing–such as the concerns raised by their new behavioural profiling and targeting system–receive a honest scholarly review.

The growing controversy over the role pharmaceutical companies are playing with scholarly research on drugs, we think, has implications here.  We believe all the academic institutions receiving these grants must vet them to ensure they truly address the real impact online ad techniques have on individuals and society.

Update:  Google & WPP made the academic research announcement–eleven grants awarded.  Here are some to ponder–and raise questions:

*  “Targeting Ads to Match Individual Cognitive Styles: A Market Test”; Glen Urban, Professor, MIT Sloan School of Management;

*  “How do consumers determine what is relevant? A psychometric and neuroscientific study of online search and advertising effectiveness”; Antoine Bechara, Professor of Psychology and Neuroscience, Department of Psychology/Brain & Creativity Institute, University of Southern California and Martin Reimann, Fellow, Department of Psychology/Brain & Creativity, University of Southern California;

*“Unpuzzling the Synergy of Display and Search Advertising:Insights from Data Mining of Chinese Internet Users”; Hairong Li, Department of Advertising, Public Relations, and Retailing, Michigan State University and Shuguang Zhao, Media Survey Lab, Tsinghua University;

*”Are Brand Attitudes Contagious? Consumer Response to Organic Search Trends”; Donna L. Hoffman, Professor, A. Gary Anderson Graduate School of Management, University of California Riverside and Thomas P. Novak, A. Gary Anderson Graduate School of Management, University of California Riverside;

*“Marketing on the Map: Visual Search and Consumer Decision Making”; Nicolas Lurie, Assistant Professor of Marketing, College of Management, Georgia Institute of Technology, College of Management and Sam Ransbotham, Assistant Professor of Information Systems, Carroll School of Management, Boston College.

Google Expands User Tracking/Profiling via Behavioral Targeting [Annals of “Interested-Based” Micro Persuasion]

Here’s an excerpt from what Google is telling its AdSense clients:

Advertisers spend more money on campaigns that reach the right audience; helping them do that should drive more revenue to your websites. This week we’re announcing plans to provide interest-based advertising across AdSense publisher sites…With this enhancement they’ll also be able to reach users based on their previous interactions with them, such as visits to the advertiser website, as well as reach users on the basis of their interests (such as “sports enthusiasts” or “travel enthusiasts”)…To develop interest categories, we’ll recognize the types of webpages users visit across the AdSense network. As an example, if they visit a number of sports pages, we’ll add them to the “sports enthusiast” interest category.

Google Does Behavioral Targeting. Why Is It Trying to Fool Users & PolicyMakers By Claiming it’s “Interest-Based” Advertising? [Annals of Commercial Surveillance]

Google has finally fully entered the behavioral targeting business, although they are trying to disguise it through an Orwellian change of language by calling it “interest-based” advertising. The world’s largest and most dominant online ad system is expanding its data collection and targeting activities whenever we search, view videos or read blogs.  This isn’t really about, as Google’s blog suggests, “more interesting” ads for consumers. It’s about a further expansion of Google’s already considerable data-mining and interactive marketing and data-tracking/targeting arsenal, which now also includes using neuroscience for its YouTube ads.  Google is further endorsing a global culture with data collection, profiling and targeting at its core.  No matter how Google attempts to frame it as “better for you ads,” digital advertising is designed to influence our behaviors in non-transparent ways.

This announcement, which was done so Google can better incorporate all the behavioral targeting technologies it acquired when it bought online ad targeting giant DoubleClick, is also designed to help head-off the enactment of privacy laws in the US and EU (Google isn’t alone here.  Microsoft, Yahoo and others are in a global race in attempt to preserve the data collection status quo under the cover of industry self-regulation).  Giving consumers access to their (incomplete and likely to constantly be revised with even more targeting categories) profile has to be viewed with such a perspective–it serves as a smokescreen so Google can broaden its data collection and targeting (and become even more dominant in the global online ad business).  Instead of having the default be no data collection without prior expressed informed consent, Google has created the system as an flawed opt-out.  Missing from what users should know and control in their profile are the applications online marketers use to develop the ad so it can more effectively target (and collect data), including: neuromarketing, viral videos, rich immersive media, social networks, online product placement, etc.

Yesterday, Google should have called on Congress, the EU and other governments to enact meaningful consumer privacy safeguards.  While it is entirely to be expected that as the world’s largest online ad company Google would fully embrace behavioral targeting,  it’s also unfortunate.  Eventually–and we hope soon–responsible shareholders, such as socially conscious investment funds, and global regulators will hold Google–and other online marketers–more accountable to the public.

But stay tuned for the next entry, on what Google, Microsoft and Yahoo have done to evade privacy safeguards for behavioural targeting in the UK!

Google Lobbyist Attack on a Consumer Group and its Foundation Funding: A Chilling Effect. And a Public Apology is Required

Consumer Watchdog is a public interest group in the muckraking tradition of Ralph Nader and his Nader’s Raiders.  They work on a broad range of issues, including health care, clean energy, affordable insurance, etc.  Recently they launched a project focused on keeping Google more accountable, and have raised a number of concerns about the company’s privacy policy, lobbying efforts, etc.   The Watchdog had been working on the health privacy issues raised in what was called the Stimulus package; it made public claims that Google was lobbying the bill–suggesting they were trying to weaken privacy safeguards.  Google strongly denied it, responding that Consumer Watchdog’s accusation was “100 percent false and unfounded.”  This charge by Watchdog–and likely other Consumer Watchdog’s activities such as its focus on privacy risks raised by the Chrome browser– obviously triggered some kind of reflexive anger from Google executives.

According to Watchdog and press reports, Bob Boorstin, Google’s Director of Corporate and Policy Communications, wrote to one of Consumer Watchdog’s foundation funders that: “I am hoping that as you consider the activities of your grantees and whether to renew your commitments, you will take these kinds of activities into account and consider whether there might be better groups in which to place your trust and resources. I would like permission from you to address a letter to your Board of Trustees or Board of Directors in which we can highlight the activities of this grantee.”

Mr. Boorstin’s use of the phrase “better groups” sent a signal to the foundation world:  don’t fund public interest organizations that work aggressively to make one the world’s most powerful companies accountable.  Google’s work to pressure a foundation to cut off support for a privacy group creates a chilling effect.  At a time when Google is increasingly the focus of concern from privacy and consumer groups, and many policymakers around the world, Mr. Boorstin’s letter can be viewed as a self-serving attempt by the company to stifle debate.  If a group such as Consumer Watchdog intentionally libeled the company, than Google can pursue legal action.

But Boorstin’s letter to a funder appears designed to send a strong signal to the foundation world that they shouldn’t financially support groups that critically question the company.  With Congress taking up privacy legislation this year, Google has a great deal at stake.  This is precisely the time when consumers require as many watchdogs as possible, to ensure that Google and other online marketers protect their privacy.

We read in press reports that Mr. Boortsin has since issued an apology, saying that “…I made a mistake in sending information about the group’s activities to the Rose Foundation for which I apologize.  Google supports the right of anyone or any institution to fund whatever group or project they choose.”  But we don’t see any apology on its official policy blog, where it should be.

Yesterday, the National Journal, which covers Washington DC politics and lobbying, reported that “Google is launching a new effort to counter its critics with stepped-up outreach to analysts, journalists, policymakers and think tanks.” [sub required].

Google has an opportunity here to make a break with how things are done in Washington, politics, with privacy policies, and the online ad business.  Groups such as mine and Consumer Watchdog, in essence, are asking Google to be the prototypical ethical corporation.  Become transparent, disclose, embrace openness, develop policies that inform and empower citizens and consumers.  I firmly believe it can do all that and still make a great deal of money.

My group is also funded by the Rose Foundation, as are many other privacy groups. That’s the foundation Mr. Boorstin pressured (they resisted, of course–but the message was sent to the funder world as intended).  Google knows well that philanthropic sources of funding to support privacy work are slim.  Google gives money to certain privacy groups–which in our mind raise conflicts of interests for them.  What’s needed are a growing global array of independent consumer organizations focused on the nature of the emerging digital economy–and which means Google will likely be the subject of serious scrutiny and debate.  Google should be welcoming such civil society activity–instead of trying to smother it.

This incident suggests that Google leaders need to seriously examine how best to address their critics–and also work harder to resolve conflicts within its corporate culture about its long-term ethical goals.

PS:  On the specific issues of digital health marketing and privacy, there’s more work to be done here.  Google, Microsoft and many others see a gold mine in online health marketing.  Google is interested in the health market.  Here’s an excerpt for a job they had open last year to be based in New York:

Senior Account Executive, Healthcare Vertical

As a Google Healthcare Account Executive, you’ll work with those who provide advertising solutions for companies that produce and sell consumables and health care products/services. The primary responsibility of the GMS Account Executive is to drive and grow new business revenue with Fortune 1000 advertisers in the healthcare Account Executive industry. You’ll manage business relationships to ensure that your clients’ needs and requirements are met. This will require you to serve as their advocate within Google while collaborating with other Google teams to provide them with a comprehensive portfolio of solutions and options. This is a high-adrenaline, client-facing sales role requiring deep industry expertise, proven sales ability with a particular penchant for closing deals, and a broad base of industry contacts. You understand and anticipate how decisions are made, and you’ll persistently explore and uncover the business needs of your key clients.

Responsibilities:

* Work collaboratively with the GMS team to drive revenue growth with new and existing customers in the Pharmaceutical Account Executive industry.

* Develop high-level relationships to serve as a trusted consultant with major customers to optimize their advertising expenditures.

* Generate business plans to define your selling strategies and tactics.

* Understand and adapt to Google’s ongoing product and technology developments.

* Manage multiple cross-product opportunities and projects.

Microsoft to Advertisers: We can “track visitors throughout the course of their online journey”

So-called behavioral re-targeting is one of the most troubling online ad techniques.  No one knows they are being digitally shadowed in cyberspace.  But many companies provide such a profiling/tracking/targeting service.  Here’s what Microsoft tells advertisers in the UK/EU it can do [our emphasis]:

“With Re-messaging we can narrow our audience by finding the people who have already visited you. It means we can ensure they always stay in touch and help create continual engagement with your brand.

Re-messaging is effective on its own, but works at its best when combined with other forms of targeting and campaign performance. By placing action tags on your website, we can track visitors throughout the course of their online journey and re-message them on our network. For example the consumer may have previously searched for a hotel but not booked, compared credit cards but not applied, or visited a promotional website. Whatever it may be, if they’ve gone part way to making a purchase or performing an action, we can help you continue the conversation and ensure that the relevant message is seen by the people it matters most to.”

UK Ad Leader: “Future of Advertising” will be the “Mapping” of our Brains

excerpt from The Guardian:  “Robin Wight…is president of the Engine Group, which encompasses 13 media businesses…the future for advertising isn’t just about building organisations; for Wight it is also about brain science. He is zealous, fanatical even, about the potential of mapping brains in greater detail and discovering what makes us tick. It is the “future of advertising – of everything”, he says…The theory of memes, Wight believes, is the most interesting idea of the past 50 years; and it helps to explain how ads that make an impact …

“It’s still controversial but in the future we’ll find little synaptic connections that represent the Guardian, BMW, all these brands. You put an electrode on someone’s head and say Jennifer Aniston, for example, and one neuron fires,” Wight says. “It took 50 years after genes were conceived of to find them in the body and it may take another 50 before we find memes – but we will find little clusters, bundles of connections that represent brands.”
…
If we could scientifically measure which adverts worked, he says, then there wouldn’t be any need for an “avalanche of annoying ads”… Scanning brains is no different from focus grouping, he believes – just more effective. “…

“Just imagine if you could pre-test an ad and you knew it would make people happy and it would be effective…You’d only be exposed to ads that engage with you – the products that fail won’t be offered. You’re not manipulating people, you’re just measuring which particular thing has an impact.”

‘It’s the future of advertising, of everything’.  Jo Adetunji.  Guardian.  February 23, 2009

MySpace Exec on its ad hypertargeting system: We have “massive amounts of data” on our users (and an example using Pepsi)

Excerpt.  on MySpace CEO Chris DeWolfe presentation.  via paidcontent.org:  “MySpace has 76 million unique online users in the US, and 139 million users worldwide; 40 percent of all Americans based in the US are on mySpace…MySpace has been working on its monetization technology currently used online called Hypertarget, which is five algorithms that basically segments the “massive amounts of data” on mySpace users into “enthusiast buckets.” Currently, they have their audience divided into over 1,000 of these segments, and for example, if Pepsi wants to target alternative music users they can serve them up an ad. Said DeWolfe, “It’s incredibly effective, and increases our yields.” This will be moving onto mobile.”

Facebook, Advertising, Third-Party $Apps, Terms of Service, Data Collection & Privacy

The role that third party developers play accessing user data on social networks such as Facebook has long been a privacy concern for us.  The business practices, including data collection, profiling and targeting that form the basis of social networking “monetization” strategies are hidden from public view.  My CDD and USPIRG, in our various privacy complaints to the FTC, asked the agency to examine this area.  Maybe the new Obama FTC will do so.  But for now, here’s some excerpts from Facebook’s advice “on common business models” to application developers, as well as from its list of “third party developers” involved in social media marketing:

“As you think about building your app on Facebook, we want to help by highlighting some keys ways of thinking about your app as a business… Apps that are meaningful, trustworthy and well designed have real staying – and monetizing – power… we host a Platform with instant access to more than 175 million active users… Once you’ve created a sustainable, engaging social application, there are many different ways to help monetize it… Advertising: We at Facebook have had success serving targeted advertisements to our users based on information we know about them. By leveraging the data we give you access to (as detailed in our Developer Terms of Service) and data users share with you directly as a part of your application experience, you can serve highly relevant ads… Virtual Credits / Virtual Goods:… instead of accepting payments directly from users for subscriptions or virtual goods, some applications instead allow users to complete affiliate offers by filling out surveys or agreeing to try new products. There are a number of providers who consolidate these types of offers…
Third Party Providers to Help You Monetize:
Advertising:
AdParlor:  “Over 500 Million users worldwide are on a social networking site. These users are comfortable sharing their age, gender, and location, and can be reached through targeted advertising.”…
Shopitmedia: “you can target based on:
1. Location
2. Gender
3. Age
4. Application Category”…
Affiliate marketing…
Analytics…

Payments

Online Ad Privacy Watch: Those “Pixels” Are Tracking You [Annals of Behavioral Targeting]

In bringing the issue of what is considered personally-identifiable information more up-to-date, the FTC has finally begun to acknowledge the ever-expanding techniques used to collect information about our online experiences.   Case in point, the modest “pixel,” an invisible piece of data placed on your browser–in the words of one online ad marketer, a digital “mole.”  It’s worth reading the entire article “What a Pixel and Cookie Can Reveal,” by Brian Massey (ClickZ.  Feb. 4, 2009).  Here’s an excerpt:

The pixel delivers a list of basic attributes… These basic attributes include:

  • IP address, character set, and encoding
  • Language, connection, and host
  • Referrer, browser, and portal

The pixel can also pass along just about any information that the browser knows:

  • URL, server name, and posting method
  • Search keyword, keyword phrase, or search engine term
  • Time and date, time of day, day of the week, and week of the year

The URL provides the entire content of the page visited by the surfer:

  • Text, images, headings, and navigation
  • Parameters and values
  • Were they home or just landing?

The IP address can be used to look up more information:

  • Country, state, and city
  • ISP, cable, DSL, or dial-up
  • Bot, crawler, or spider

By adding a cookie, surfer data can be aggregated over time, and more can be inferred about visitor behaviors…

Once we get ZAG [Zip code, age, gender], we can start to segment visitors more accurately:

  • Where do they live?
  • What do they make?…
  • What is their profession, race, marital status; do they have kids; and other census data           And when we integrate this information with other non-PII databases, we can learn even more: What they buy, how often, how recently…

Baby Steps for Online Privacy: Why the FTC Self-Regulatory Principles For Online Behavioral Advertising Fails to Protect the Public

Statement of Jeff Chester, Exec. Director, Center for Digital Democracy:

The Federal Trade Commission is supposed to serve as the nation’s leading consumer protection agency.  But for too long it has buried its mandate in the `digital’ sand, as far as ensuring U.S. consumer privacy is protected online.    The commission embraced a narrow intellectual framework as it examined online marketing and data collection for this proceeding.  Since 2001, the Bush FTC has made industry self-regulation for privacy and online marketing the only acceptable approach when considering any policy safeguards (although the Clinton FTC was also inadequate in this regard as well).  Consequently, FTC staff—placed in a sort of intellectual straitjacket—was hampered in their efforts to propose meaningful safeguards.

Advertisers and marketers have developed an array of sophisticated and ever-evolving data collection and profiling applications, honed from the latest developments in such fields as semantics, artificial intelligence, auction theory, social network analysis, data-mining, and statistical modeling.  Unknown to many members of the public, a vast commercial surveillance system is at the core of most search engines, online video channels, videogames, mobile services and social networks.  We are being digitally shadowed across the online medium, our actions monitored and analyzed.

Behavioral targeting (BT), the online marketing technique that analyzes how an individual user acts online so they can be sent more precise marketing messages, is just one tool in the interactive advertisers’ arsenal.  Today, we are witnessing a dramatic growth in the capabilities of marketers to track and assess our activities and communication habits on the Internet.  Social media monitoring, so-called “rich-media” immersive marketing, new forms of viral and virtual advertising and product placement, and a renewed interest (and growing investment in) neuromarketing, all contribute to the panoply of approaches that also includes BT.  Behavioral targeting itself has also grown more complex.  That modest little “cookie” data file on our browsers, which created the potential for behavioral ads, now permits a more diverse set of approaches for delivering targeted advertising.

We don’t believe that the FTC has sufficiently analyzed the current state of interactive marketing and data collection.  Otherwise, it would have been able to articulate a better definition of behavioral targeting that would illustrate why legislative safeguards are now required.  It should have not exempted “First Party” sites from the Principles; users need to know and approve what kinds of data collection for targeting are being done at that specific online location.

The commission should have created specific policies for so-called sensitive data, especially in the financial, health, and children/adolescent area.  By urging a conversation between industry and consumer groups to “develop more specific standards,” the commission has effectively and needlessly delayed the enactment of meaningful safeguards.

On the positive side, the FTC has finally recognized that given today’s contemporary marketing practices, the distinction between so-called personally identifiable information (PII) and non-PII is no longer relevant.  The commission is finally catching up with the work of the Article 29 Working Party in the EU (the organization of privacy commissioners from member states), which has made significant advances in this area.

We acknowledge that many on the FTC staff worked diligently to develop these principles.  We personally thank them for their commitment to the public interest.  Both Commissioners Leibowitz and Harbour played especially critical roles by supporting a serious examination of these issues.  We urge everyone to review their separate statements issued today.  Today’s release of the privacy principles continues the conversation.  But meaningful action is required.  We cannot leave the American public—now pressed by all manner of financial and other pressures—to remain vulnerable to the data collection and targeting lures of interactive marketing.