There’s a “Great Digital Game” going on, where companies such as Google, Facebook, Microsoft and leading ad agencies compete to expand the clout of online marketing around the globe.Â As I told EU and other privacy regulators last Friday, the Obama Administration is being pressed by US online marketers to forge trade deals that will allow the leading companies to conduct business in theÂ Asia-Pacific and EU region without worrying about serious privacy and consumer protection rules.Â I do think it’s ironic–and really misleading–to point to online marketing as a U.S. economic success story that requires special treatment.Â The revenues generated by Google, Facebook and the others are principally from advertising.Â Whether they are truly models of innovation that will bring the kind of sustainable long-term job and economic growth we need is questionable.
At the core of the “Great Digital Game”–where U.S. companies strive to dominate the global interactive ad marketplace–is data collection for user targeting.Â Microsoft, which has a principal online ad research facility in Beijing, was recently seeking a Senior Data Mining Analyst.Â Read this excerpt from the job description and think about privacy, civil liberties in China and other autocratic regimes, consumer protection and the ethical role of U.S. online ad companies:Â “Microsoft Ad Platform China is building world-class engineering teams in Beijing, focusing on online Ads related systems and services such as behavior targeting and advertiser analytics. The team partner closely with the Redmond Ad Platform team, enabling the discovery and inference of user profiles, intent and interaction while respecting privacy and trust, with the ultimate goal of maximizing benefits for users, advertisers and publishers…Core Job Responsibilities: Conduct and manage applied research and modeling work in the areas of user segmentation, profiling, and targeting. Research and experiment on data mining algorithms for user segmentation and dynamic segment expansion. Utilize data mining technologies and use various data sources, some of which may include MSN/Windows Live web usage, search query, demographic, subscription, and 3rd party data, to gain insight into Internet user behavior and intent that will set the foundation for Microsoft targeting offerings and data services. Provide complete solutions to business problems using data mining techniques, statistics and data analysis. Serve as subject matter expert and drive thought leadership in the areas of user profiling, ad targeting, and personalization for Microsoft online services.”
As USPIRG and CDD told the FTC last month, the growing integration of first and third party data for consumer targeting requires a uniform approach to protect privacy.Â Entangling a consumer via a host of outside third-party databases used for stealth profiling and targeting is unacceptable–especially when used for financial and health marketing, or targeting youth.Â Adobe, for example, just announced that it’s “Online Marketing Suite” now incorporates “a wide range of third-party data from providers such as Acxiom (demographics, segmentation and buying behavior), Bizo (business demographics), DataLogix (buying behavior and purchase intent), eXelate (demographics, buying behavior and purchase intent) and TARGUSinfoâ€™s AdAdvisor (demographics, brand preferences, product needs and CRM data).”Â Adobe also is “partnering with DataXu, InviteMedia, MediaMath and Turn to provide customers with the means to act on valuable audience data. Publishers can deliver larger audiences to advertisers by combining their own ad inventory with inventory acquired through the use of DSP partners.”
Both the Congress, the FTC and the European Commission have to address the growing merging of first and third party data that occurs without a users awareness or informed consent.Â Meanwhile, ad agencies such as Omnicom have created their own data tracking and targeting services.Â One executive recently noted that “Thereâ€™s been increasing momentum in the use of third-party data. It’s a critical element of our stack – to use the right third-party audience intelligence data both for targeting and sometimes more importantly for audience insights post impression delivery. I don’t know the exact percentage, but I would say there are a significant percentage of our impressions that are bought with some form of third party data.“
Google CEO Eric Schmidt gave the keynote address at the Interactive Advertising Bureau’s “Ecosystem 2.0” conference.Â As reported, he explained that [our emphasis]:
“The smartphone is the iconic device of our time,” Schmidt told the record IAB audience of 750 in Palm Springs, California. A year ago, he added, he predicted that mobile use would surpass PCs within two years. “It happened two weeks ago. And the PC is not going to catch up,” Schmidt said, as he labeled the new era, “Mobile First.”…The hyperlocal potential of mobile, Schmidt continued, means that smartphones and tablets bring a practical application to marketing that no other medium can match: A connection that will lead you to the store, open the door, and direct you to a product you need. “A RadioShack ad can tell you where you are and how to get to the nearest store.” And equipped with Near Field Communication chip (NFC), the newest generation of smartphones not only can tell you what to buy, it can enable a tap-and-pay transaction…Think of the offers mechanisms for advertisers,” Schmidt offered. “We’ve spent 20 years trying to get here. And now there’s an explosion in commerce. Particularly for the consumer who says, “I want to buy something and want to buy it right now,” he added, “We can do it.”
And, in large part, that capability means that mobile media consumption “is happening faster than all our internal predictions.”
Some 78% of smartphone internet users already use their smartphones as they shop. And, as consumer comfort with – and acceptance of – new mobile technology continues, Schmidt envisions “a world, in the very near future, where computers remember things and you never need to worry about forgetting anything. You want it to remember something and it will. And you’re never lost. No one is ever lost. You never turn off the [mobile device] and you’ll always know where you are. And where you want to goâ€¦.”
[First in a series based on our FTC filing from 18 Feb.Â Excerpt]:
Consumers should be accorded the same kind of user opt-in control on first-party and third-party sites alike. First-party sites, it is clear, engage in a wide range of data collection and targeting approaches unknown even to their regular visitors, and user consent for these practices should be required. In addition, as first-party publishers increasingly engage in forms of data sales and sharing for the purposes of consumer tracking and targeting, the distinctions between first and third parties are eroding. â€¦Turn, for example, operates a â€œdata-drivenâ€ ad-targeting platform that â€œcrunches 2000+ behavioral, contextual, inventory, and ad selection variables within 25 millisecondsâ€¦ all to determine the right ad, right time, right price, and right audience.â€Â â€œTurn operates one of the largest marketing platforms on the Internetâ€¦ ranked 6th in US audience reach, just behind companies like Googleâ€¦.â€ Â A recent research paper by TURN discusses how its â€œdata mining solution enables marketers to cost-effectively identify interactions and variables of thousands of data points. It also allows them to look at the entire user profile at the time of impression receipt and do a thorough analysis of the impact of all the variables on a campaign (including latent variables which go beyond the audience segmentation and are often times overlooked).â€ Â Turn explains that its â€œsecret sauceâ€ is a â€œscalable infrastructure [that] enables us to read an individual userâ€™s data profile from among hundreds of millions of profiles within a very small time frame, generally 2 or 3 milliseconds. And, we do this over 100,000 times a second (8+ billion times a day).â€ â€¦
Ball State University has developed a reputation for engaging in interactive media research, often working with marketing companies such as Nielsen.Â Its Center for Media Design just released research on privacy, suggesting in their comments that the debates on privacy have been over-simplied, including by advocates.Â Like many others, Ball State examines privacy and fails to fully explore how online data collection really works in the context of contemporary digital marketing.Â But given Ball State’s close ties with online marketers–including the staff of the Center for Media Design–perhaps it’s not surprising that its review didn’t place the issue under the appropriate critical lens.
For example, Sequent Partners, which works on online marketing and other related issues, is a partner of Ball State.Â Sequent explains that: Sequent Partners is the majority shareholder in Media Behavior Institute, a consumer-centric and media-neutral multimedia research company formed in 2008 and which enjoys a uniquely close relationship with Ball State University. Media Behavior Institute applied the Universityâ€™s observational research and conducted the Nielsen Council for Research Excellence Video Consumer Mapping study, the most ambitious multi-media measurement ever conducted.
Sequent Partners is also a shareholder and active member of the Media Trust LLC. This team was formed specifically to analyze in-market advertising and media response, and best-of-class sources of single-source data. Media Trust offers the most insightful set of evaluation tools for media and advertising.
Sequent Partners also has a long-term development and product management relationship with OTX Research (Ipsos ASI) in the area of multimedia advertising research.
Working at the Media Behavior Institute is Mike Bloxham, the long-time research director for the Center for Media Design, who just left the university to also work at a digital media start-up.
The privacy debate is an important one, as are many of the issues at stake in the digital communications era.Â The public needs independent research to help address these serious and complex issues.Â Scholars and universities have an important role to play.Â Ball State is not the only school with its hand-out for grants and research contracts. Â But such relationships create conflicts that need to be addressed, including ensuring the research is designed to serve the broader public–not just the special interests supporting the school.
For Immediate Release:Â Feb. 18, 2011
Child, Health and Consumer Advocates Ask FTC for Teen Privacy Protections, including Do-Not-Track and No Behavioral Targeting
Today a Coalition of Child, Health and Consumer Advocates filed comments on the Federal Trade Commissionâ€™s proposed privacy framework asking for increased privacy protections for adolescents.Â Â The coalition includes leading advocates such as the Center for Digital Democracy, the American Academy of Child and Adolescent Psychiatry, American Academy of Pediatrics, Children Now, and the Consumer Federation of America.
Privacy protections are needed as teens are increasingly subjected to privacy invasions online. Teens are using new media technologies for key social interactions and to explore their identities. This increased use of digital media subjects them to wholesale data collection and profiling of even their most intimate interactions with friends, family, and schools. Meanwhile, recent research in psychology and neuroscience reveals that teens are more prone to risky behavior when their anxieties and peer relations are exploited. Privacy protections are needed to keep the online world social and safe.
Companies should not use data to behaviorally profile teens. The framework should also provide enhanced choice for adolescents, including a Do Not Track feature. In implementing â€œprivacy by design,â€ companies should consider the needs and vulnerabilities of teens.Â They should address those vulnerabilities by, for example, minimizing the amount of data collected from teens.Â Data that is collected should be retained for only short periods and should be afforded greater security.
â€œTeens live online today,â€ said Guilherme Roschke, attorney for CDD. â€œThis time of development and maturation requires privacy protections. Teens cannot go it alone against the vast data collection and profiling infrastructure of new media technologies that not even adults can understand.â€
â€œBecause of their avid use of new media, adolescents are primary targets for digital marketing,â€ explained co-signer Kathryn C. Montgomery, Ph.D. â€œThe unprecedented ability of digital technologies to track and profile individuals across the media landscape, and to engage in sophisticated forms of targeting, puts these young people at special risk of compromising their privacy.â€
The full coalition includes:
Center for Digital Democracy, American Academy of Child and Adolescent Psychiatry, American Academy of Pediatrics, Berkeley Media Studies Group, a project of the Public Health Institute, Children Now, Consumer Federation of America, Consumer Watchdog, David VB Britt, Retired CEO, Sesame Workshop, Ellen Wartella, Kathryn Montgomery, National Policy & Legal Analysis Network to Prevent Childhood Obesity, a project of Public Health Law & Policy, The Praxis Project, Privacy Rights Clearinghouse, Public Good, Public Health Institute, Tamara R. Piety, and World Privacy Forum
Staff Attorney / Fellow
Institute for Public Representation
First Amendment and Media Center
Georgetown University Law Center
Just as the FTC and (we assume) the Commerce Department’s Internet Policy Task Force are examining what the new safeguards should be for sensitive data involving online health marketing, there is an important new research study in the Journal of the American Medical Infomatics Association.Â As Information Weekreports, the study “examined 10 diabetes-focused social networking sites [and]Â found that the quality of clinical information, as well as privacy policies, significantly varied across these sites.Â The study, “Social but safe? Quality and safety of diabetes-related online social networks,” was conducted by researchers in the Children’s Hospital Boston informatics program…and found that only 50% presented content consistent with diabetes science and clinical practice.Â The research…also revealed that sites lacked scientific accuracy and other safeguards such as personal health information privacy protection, effective internal and external review processes, and appropriate advertising.”
The study underscores the issues raised by CDD and its colleague privacy and consumer protections groups last November in a complaint filed at the FTC.
NTIA is also getting into the privacy discussions.
Itâ€™s part of the larger Internet Policy Task Force thatâ€™s underway here at Commerce where our agency — along with other agencies — is looking at a number of Internet policy issues. Privacy is first and foremost on the list, but weâ€™re also looking at the protection of intellectual property, cybersecurity, and weâ€™ll be looking at the free flow of information. For Commerce, our theme links all these topics around the notion of innovation, preserving the job creation and business expansion aspects of the Internet and trying to protect that going forward. So in the area of privacy, the task force did issue the green paper late last year. Comments just came in on that, so people are starting to work their way through them, with the goal that weâ€™ll take the green paper and turn it into a more final pronouncement of the Department of Commerce or perhaps even the administrationâ€™s policy on privacy later this spring.
Do you think there should be a government office specifically dedicated to privacy?
We certainly believe that if weâ€™re going to move forward with these voluntary enforceable codes of conduct with the industry that the function of convening and organizing that process should sit [in the government]. Our believe is that the Department of Commerce, and in particular NTIA, is the appropriate place for that function to reside. When we start talking about offices that sounds more bureaucratic and maybe requires departmental administrative orders. But on the issue of making sure that function is done, yes, based on what we see in the comments, we think thatâ€™s an appropriate idea. We think itâ€™s a necessary idea in terms of working with industry and weâ€™ll see how this all plays out over the course of the spring.
What is NTIA doing internationally on the privacy front?
Privacy has big international implications because the Council of Europe is looking at redoing what theyâ€™ve done in privacy. The European Union is looking at this issue. OECD is looking at the issue. So weâ€™re very cognizant of the need to make sure our policy, whatever it is, is designed in a way to best harmonize with whatâ€™s happening in the rest of the world, and in particularly Europe.
The U.S.’s larger marketing, advertising and media lobbying organizations want the Obama Administration to help them continue to engage in behavioral data profiling and other digital marketing techniques without meaningful safeguards.Â Trade groups–including the Direct Marketing Association, Interactive Ad Bureau, and the 4A’s–Â told the Obama Commerce Department it wants it to negotiate a trade deal with the EU and elsewhere that would give U.S. online ad companies, in essence, a free pass on data collection and tracking.Â Can you believe they want U.S. self-regulation (ineffective and a cover to permit the expansion of consumer data collection) to be the global standard.Â File this under digital Chutzpah!Â They wrote in a [my emphasis]Â filing:
Here’s who signed the filing.Â Attention EU–watch out.Â And a question for the Obama Administration.Â Which side of the keeping the online medium a real reflection of democratic potential will you be on?
American Advertising Federation
American Association of Advertising Agencies
Association of National Advertisers
Coalition for Healthcare Communications
Direct Marketing Association
Electronic Retailing Association
Interactive Advertising Bureau
MPA — The Association of Magazine Media
National Business Coalition on E-Commerce and Privacy
Newspaper Association of America
Performance Marketing Association
From Pandora’s recent S-1 IPO filing at the SEC [our bold]:
excerpt:Â Existing privacy-related laws and regulations are evolving and subject to potentially differing interpretations, and various federal and state legislative and regulatory bodies may expand current or enact new laws regarding privacy and data security-related matters. We may find it necessary or desirable to join self-regulatory bodies or other privacy-related organizations that require compliance with their rules pertaining to privacy and data security. We also may be bound by contractual obligations that limit our ability to collect, use, disclose, and leverage listener data and to derive economic value from it. New laws, amendments to or re-interpretations of existing laws, rules of self-regulatory bodies, industry standards and contractual obligations, as well as changes in our listenersâ€™ expectations and demands regarding privacy and data security, may limit our ability to collect, use, and disclose, and to leverage and derive economic value from listener data. We may also be required to expend significant resources to adapt to these changes and to develop new ways to deliver relevant advertising or otherwise provide value to our advertisers. In particular, government regulators have proposed â€œdo not trackâ€ mechanisms, and requirements that users affirmatively â€œopt-inâ€ to certain types of data collection that, if enacted into law or adopted by self-regulatory bodies or as part of industry standards, could significantly hinder our ability to collect and use data relating to listeners. Restrictions on our ability to collect, access and harness listener data, or to use or disclose listener data or any profiles that we develop using such data, would in turn limit our ability to stream personalized music content to our listeners and offer targeted advertising opportunities to our advertising customers, each of which are critical to the success of our business...
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