excerpt from a post by a BlueKai exec:  “The usage of data will penetrate the online ad ecosystem and the next few years should see data impacting the entire media buying process – end to end. Marketers already need to understand their audiences through customer interactions across multiple channels. The most progressive marketers are maximizing both audience and campaign performance data as a way to drive marketing spend…as more and more agencies adopt media strategies that deploy audience profiling and data analysis, there will be an increase in demand for the data scientist…Data driven audience targeting moves operation out of the back room black box systems and into the hands of marketers who are planning so they can really do a much better job of identifying your ideal customer, reach them by very specific targeting attributes and get a much better picture of what’s working and what’s not. It seems like a no-brainer, but much of the online media spend today is not driven by data. A data-centric approach to marketing is opening up a new world to online marketing which promises to be a world that provides transparency, target specificity, scale, accountability and results…The ability to combine audience and media performance data gives marketers a full picture of how they can get more of their marketing dollars. 2011 promises to be the year marketers take control of their data and look for solutions that can provide a full-service, full-loop solution will become vendors of choice.”
Category: Online advertising
Did the Commerce Dep’t Give a Special Deal to the Online Data Collection Lobby?
It sure sounds that way, given what the Interactive Ad Bureau wrote on the new privacy proposal (our emphasis):
“The green paper is another important step in what has been an inclusive, productive process to develop the Administration’s strategy for increasing consumer online privacy, while balancing the realities of our national economy. It provides vital support for industry self regulation. The Department of Commerce’s recognition that these efforts can be an effective means for increasing transparency around data practices and empowering consumers with a comprehensive, easy-to-use opt-out mechanism is key, given other recent reports. Increasing consumer confidence in the Internet is a common goal. We agree that supporting these industry codes in a timely fashion is critical, and our cross-industry coalition looks forward to working with the Administration to ensure our program is both robust and enforceable.”
The Commerce Department met with our coalition of consumer and privacy groups only once–after we had written to the White House asking for a meeting with officials there. There was no formal briefing for the country’s leading consumer and privacy groups prior to the report’s release. Yet we understand Commerce did one for industry. As the Obama White House proceeds with its plans for the forthcoming “multi-stakeholder” deliberations, they must be structured in a manner that ensures significant consumer and privacy participation (which means that groups funded by the online ad industry have to be dealt with in different fashion).
Statement of Jeff Chester on the Department of Commerce’s Internet Policy Task Force Privacy and E-Commerce: a Bill of Behavioral Targeting “Rights” for Online Marketers?
The Obama Administration asks some important questions about protecting the privacy of U.S. consumers. But given the growth of online data collection that threatens our privacy, including when consumers are engaged in financial, health, and other personal transactions (including involving their families), this new report offers us a digital déjà vu.  The time for questions has long passed.
Instead of real laws protecting consumers, we are offered a vague “multi-stakeholder†process to help develop “enforceable codes of conduct.â€Â If the Commerce Department really placed the interests of consumers first, it would have been able to better articulate in the report how the current system threatens privacy.   They should have been able to clearly say what practices are right and wrong—such as the extensive system of online behavioral tracking that stealthily shadows consumers—whether on their personal computer or a mobile phone.  The paper should have firmly articulated what the safeguards should be for financial, health and other sensitive data. The report should have rejected outright any role for self-regulation, given its failures in the online data collection marketplace. While the report supports a FIPPS framework, these principles can be written in a way that ultimately endorses existing business practices for online data collection and targeting.
This illustrates one of the basic problems with the Administration’s approach to protecting consumer privacy online. The Commerce Department is focused on promoting the interests of industry and business—not consumers. It cannot play the role of an independent, honest broker; consequently it should not be empowered to create a new Privacy Policy Office.  Having the Commerce Department play a role in protecting privacy will enable the data collection foxes to run the consumer privacy henhouse. We call on the Administration and Congress to address this issue. A new Privacy Policy Office should be independent and operate under the Administrative Procedures Act—ensuring there are safeguards for meaningful public participation and transparency.
The Commerce paper’s real goal is to help U.S. Internet data collection companies operate in the EU, Asia/Pacific and other markets as “privacy-free†zones. Under the cover of promoting “innovation†and trade, I fear the U.S. will craft a crazy-quilt code of conduct regimes that they will claim should pass muster in the EU (which has a more comprehensive framework to protect privacy). The Obama Administration appears to be promoting a kind of “separate, but equal†framework, where it will argue that no matter how weak U.S. privacy rules are, other countries should accept them as the equivalent of a stronger approach. The new paper should have acknowledged the U.S. has to play catch-up with the EU when it comes to protecting consumer privacy.
We have been promised meetings with the new White House subcommittee on privacy, where consumer and privacy groups will raise these and other concerns.
IAB Gets a new Chance to Play Constructive Role as Randall Rothenberg Goes to Time Inc.
The departure of Randall Rothenberg, the head of the Interactive Advertising Bureau, provides a critical opportunity for the IAB to revisit its position on protecting consumer online privacy (including Do Not Track). Under Mr. Rothenberg, the IAB lobbied Congress to restrict the FTC’s ability to protect consumers, including on privacy. With new leadership, the IAB could begin playing a more constructive role by working with consumer groups to build a consensus on federal privacy rules. Instead of confrontation and denial, we hope the online ad lobby pursues serious engagement with privacy advocates.  The IAB has become just another inside the Beltway lobbying group–and has lost credibility among many policymakers. A new IAB leader should be someone who can really help the mission of the industry by engaging in the kind of diplomacy and debate that supports the higher purposes of online advertising, digital publishing, and the public interest.
At Time, Mr. Rothenberg will now be in charge of its online ad network, which uses behavioral targeting and other interactive data techniques. How Time responds to the growing call for better consumer privacy will be one of Mr. Rothenberg’s new challenges.
Online Pharma Watch: BeWell.com/More disclosure required from Dr. Nancy Synderman
BeWell.com is a “new social network founded by America’s top doctors,” including NBC News Chief Medical Editor Dr. Nancy Synderman and others. The site is organized around “communities” that address issues involving important health concerns, including breast cancer, reproductive health, aging, etc. BeWell is owned by “by LLuminari, Inc, an innovative health media company…” LLuminari says on its website that “Our programs are made possible by leading companies who support providing consumers and employees access to the knowledge of the best and brightest experts. Our sponsors have included:
Johnson & Johnson GlaxoSmithKline General Mills PepsiCo Stonyfield Farm Newman’s Own Smith Barney Eileen Fisher PacifiCare Health System United Healthcare Genomic Health PriceWaterhouseCoopers
BeWell’s privacy policy doesn’t really explain how the data it collects might be used for its advertising. The site provides important information for its users. But we need to see more disclosure on the site about exactly the role its “sponsors” play, such as with its “Pfizer Support Center,” “Health Tools” featuring “Oncotype Dx” (Genomic Health) and the “Healthy Sight Resource Center” sponsored by Transitions. As an NBC journalist, Dr. Synderman should also disclose when doing her reporting the connections with the advertisers and sponsors of BeWell and LLuminari. Online health sites, especially given their public interest purpose, should be transparent about their relationships with drug companies and other health marketing sponsors.
Neuromarketing & Privacy: German Data Protection Authority Enacts Safeguards
We have long been sounding the alarm over the role of neuromarketing in advertising, especially for online marketing. We are gratified that the Data Protection Authority in Hamburg Germany, according to this law firm post, just imposed safeguards on the role of neuromarketing. It explains that [excerpt]: “[O]n November 23, the data protection authority (DPA) of the German Federal State of Hamburg imposed a €200,000 fine [link in German] against the Hamburg-based savings & loan Hamburger Sparkasse due to violations of the German Federal Data Protection Act (the BDSG) for, among other reasons, using neuromarketing techniques without customer consent…Indeed, according to the head of the Hamburg DPA, Prof. Johannes Caspar, the intent was to send a clear signal to the market against the use of modern neuromarketing and comparable methods in violation of data protection law. The case also clearly illustrates that German regulators are willing to enforce the new data protection regime and are well prepared to impose significant fines upon companies rather than giving them merely a warning notice…The decision of the Hamburg DPA may also attract attention beyond Germany and influence the interpretation of data protection laws in other countries, in particular with respect to the compliance of neuromarketing and brain sciences techniques with data protection laws. Due to the sensitivity of such activities, it is likely that regulators in the EU will follow the approach taken by the Hamburg DPA.”
Five Ways to Protect Privacy
[a version we wrote of this ran in Multichannel News]
Five Ways for Digital Marketers to Protect Consumer Privacy
If George Orwell were writing today, 1984’s Winston Smith would be working as a “Doublespeak†specialist crafting privacy policies and creating self-regulatory regimes. That’s not what consumers and citizens need in the interactive marketing era.  All Americans should have their privacy respected and protected when they go online—including when they use mobile phones.
1.    Tell your users what you actually say to your advertisers—about how the profiling and targeting process really works. There is a disconnect that is unfair and deceptive between what companies say in their privacy policies and pitch to their clients and potential partners.  Be honest about the “360 degree†ways you engage in online marketing.
2.    Don’t collect information and target consumers based on their interests in finance and health. These two most “sensitive†categories should be opt-in only.  When consumers go online for loans, credit, mortgages, and health concerns they require the upmost privacy. Although online financial, health and so-called lead-generation advertising is big business, consumers should not be forced to have their online financial and health behavior stealthfully-tracked and compiled. The risks to consumers are great if we don’t develop special rules for this data.
3.    Racial and ethnic profiling data should also be opt-in. Hispanics, African-Americas, Asian-Americans and other minorities are increasingly the focus of a growing behavioral targeting and online marketing apparatus. In the “offline†world, we have witnessed a disturbing use of racial profiling practices to discriminate against individuals. In today’s online environment, users are being identified as being a member of a racial or ethnic group without either their awareness or consent. While we all want to see the growth of diversely owned online publishing, it should not be done at the expense of civil liberties in the digital era. We must prevent the growth of online racial profiling, that when tied to income, geography and other data can be used to create 21st Century forms of discrimination.
4.    Don’t use neuromarketing and other subliminal and subconscious-based advertising.  Fortune 1000 advertisers and online marketers such as Microsoft, Yahoo and Google are using new forms of ad testing and development involving the latest tools of neuroscience, such as fMRI’s and EEGs. Neuromarketing’s goal is to directly influence a consumer’s subconscious, and when combined with the power of online data targeting, offers powerful—and frightening—new forms of manipulation.
5.    Users need to consent to having their profiles be bought and sold on so-called online ad exchanges. Selling off the right to target a consumer online, via real-time auctions that happen in milliseconds, is dehumanizing. Nor should we permit the growing combination of offline and online databases to be used for targeting, including via these new digital auction houses.
Interactive marketing is now a fundamental operating principle for the cross-platform media economy throughout the world.  But right now, it’s a digital “wild west” that doesn’t serve the interests of consumers, citizens and most marketers.
Time Warner Cable Funds Scholars to Boost Big Cable Goals on Data Collection and Consumer Targeting [Annals of Buying Access to Scholars]
Lobbyists like to hire academics in order to give their agenda the patina of scholarly respectability. Many academics are ideologically aligned with the interests of major media and telecom companies–supporting an unregulated environment (and like to reap the bucks as well). Some academics want to schmooze with deep-pocketed special interests. So it’s not a surprise to learn that Time Warner Cable has a “Research Program on Digital Communications.” They have already released a volume of papers on the “Future of Digital Communications: Policy Perspectives.” Time Warner’s so-called research agenda is so self-serving that it would be laughable if the goal wasn’t ultimately to undermine the public interest and consumer protection. Luckily, there are scholars and other policy experts who care more about their integrity and the academic issues and wouldn’t consider taking such funding. Here’s what the first “research question” is for those seeking funding to ultimately help undermine consumer privacy by enabling Time Warner and other digital marketers to expand their behavioral targeting approaches:
Topic One: Advertising, Two-Sided Markets, and the Role of Network Operators (ISPs, MSOs)
The emergence of more precisely targeted (interest-based or so-called “behavioralâ€) advertising offers potential benefits to consumers while at the same time raising possible concerns about privacy. Application providers, network owners, advertisers, content providers, and other interested parties may play a role in allowing these potential benefits to be realized. By facilitating two-sided markets, or platforms that enable two distinct but related groups of customers (such as advertisers and consumers) to obtain value, service providers can expand the scale and scope of their offerings to consumers. Industry groups and the Federal Trade Commission have developed principles for self-regulation online, while some advocacy organizations and members of Congress have pointed to potential harm from more targeted advertising and are calling for new government mandates.
Key questions concern the types of disclosures and the level of consumer consent that should be required.
Questions
• What are the benefits of more precisely targeted advertising, and how prevalent is the practice?
• What technological innovations support the development of more targeted advertising over digital media?
• How are consumers affected by increasingly prevalent forms of targeted advertising, and what is the appro-
priate public policy response?
• What is the role for self-regulation, government intervention, and industry standard-setting?
• What role should network operators play in regulation (voluntary or prescriptive)?
• Describe the future of the advertising marketplace and the role of new and potential entrants, such as
Internet service providers (ISPs), cable operators, and other multichannel video programming distributors
(MVPDs) offering interactive television services.
• How can two-sided markets help encourage the development of new broadband and video services?
• How can regulation of advertising or privacy affect, promote, or retard the development of these new
services?
What AOL Should Have Told Reps. Barton & Markey
AOL also describes to Reps. Barton and Markey the way they use cookies that doesn’t reflect what they say to clients--such as “Target users based on attributes from user registration or third-party data (e.g. age, gender, income, kids)… Retarget users who visit your website… Target users within households using Experian’s statistical modeling based on hundreds of offline data elements that are most predictive for defining the specific audience of consumers.†For question 1, they refer to their privacy policy—something few consumers would read or understand. Nor does the privacy policy spell out how AOL collects and targets users, as they do for potential clients. See and compare to privacy policy. See how they offer targeting based on political information.
Question 2: They didn’t answer completely. They should have included information from here. And what their partners collect.
Question 3. They should have said they urge advertisers to use pixels, beacons and other tracking tools:   “Place pixels on all high-traffic pages… Target broadly… Most networks, including Advertising.com, look at IP or cookie data to determine if a user is part of a specific demographic or has demonstrated a particular online behavior, such as shopping for a car, browsing cooking sites, and so on. With user targeting, you reach those consumers directly, regardless of the sites they happen to be visiting.â€
And they say that the third party cookies don’t identify the “specific user.â€Â But that’s what AOL says it can target: “Target users within households… Retarget users who visit your website… Target users within households that demonstrate the highest propensity to buy certain products…â€
Question 7. They don’t say what they do. It’s monetizing all the data: “We monetize nearly 1.5 billion impressions per day on average.â€
10. They should have said how they target based on financial and health info. They didn’t. See its targeting for health, finance, teens, Hispanics, African-Americans.
14.  Users don’t have enough information on the process to really determine whether they should opt-out. Nor is AOL’s opt-out really visible.
The new Self-Reg Online Ad Plan–Digital “Deja-vu” All Over Again! See What they Say about the NAI Now!
In 1999, online marketers promised consumers they would protect their privacy. Leading interactive ad companies created the Network Advertising Initiative (NAI) as a scheme to head-off proposals by the FTC that would help regulate online profiling. Now it turns out, says the online ad industry, the NAI really couldn’t work. So they have developed yet another self-regulatory effort. Here’s what online marketers told Ad Week today: “The move marks the most significant regulation the industry has imposed on companies and goes significantly farther than the Network Advertising Initiative, which held third-party advertisers needed to allow consumers to opt out. Doing so, however, was a cumbersome process.“  So the industry didn’t tell the FTC or consumers that the NAI wasn’t consumer friendly and “cumbersome.” Yet they have used the NAI as a political bulwark to head-off consumer protection rules. Shame on them. Meanwhile, in the same story, it’s revealed that only now–as pressure mounts to protect online consumers—does the industry recognize protecting privacy is important: “The guys that drive the industry have figured out this privacy stuff does matter,” said Scott Meyer, CEO of Better Advertising Project, which will help companies comply with the requirements.
The new “aboutads.info” website established by the industry fails to provide consumers serious information about cookies and behavioral targeting and profiling. It reveals how little the industry is committed to protecting privacy and informing U.S. consumers about the process. To see how this new plan is really designed to protect the data collection business, examine the rules for sensitive information. Beyond the children’s privacy law (COPPA) we got enacted in 1998, this scheme permits full-scale collection and use of financial and health information.  Under the “new” self-reg policies, the narrowest of definitions for respecting your financial and health information has been created: “Entities should not collect and use financial account numbers, Social Security numbers, pharmaceutical prescriptions or medical records about a specific individual for OBA without Consent.”
Shame on them. Online marketers spent some $3 billion last year on online financial marketing and will spend $1 billion for pharma and health related targeting in 2010. Consumer data collected by online financial and health marketers, much of which is sensitive and personal, is ok under the industry’s “new” plan.
PS: The folks at Better Advertising need to take a course in online marketing–and change its new website so it really informs consumers about the process. What it has now would get a C-minus in any class on online marketing. They can start with 360 degree targeting, online and offline profiling, rich media, a serious description of online auctions, the tracking process, work on “engagement” and neuromarketing,” social media marketing, etc. Consumers deserve better.