Category: Obama Administration

Protecting Children’s Privacy Online at the FTC: Statement of Kathryn Montgomery, PhD

CDD will soon file at the FTC on how to ensure the Children’s Online Privacy Protection Act [COPPA] can better protect the online privacy of children under 13.  It’s a 1998 law that we led the campaign to have enacted.  Here’s a brief excerpt from what our colleague Prof. Kathryn Montgomery told the FTC today:

Statement of Kathryn C. Montgomery, PhD

Professor, School of Communication

American University

Protecting Kids’ Privacy Online: Reviewing the COPPA Rule

Federal Trade Commission

June 2, 2010

For the past decade, the Children’s Online Privacy Protection Act (COPPA) has served as an effective safeguard for young consumers in the online marketing environment. Because the legislation was passed during the early stages of Internet e-commerce, COPPA established a clear set of “rules of the road” to help guide the development of the children’s digital marketplace. The law created a level playing field, ensuring that every commercial player—from the largest children’s media companies to the smallest start-ups – would treat young people fairly.

Congress intended COPPA’s basic framework to be flexible, anticipating changes in both technology and business practices, and requiring periodic reviews by the Federal Trade Commission to ensure its continued effectiveness. Today’s children are growing up in a ubiquitous digital media environment, where mobile devices, instant messaging, social networks, virtual reality, avatars, interactive games, and online video have become ingrained in their personal and social experiences. The online marketing practices of the 1990s have been eclipsed by a new generation of tracking and targeting techniques.

In its current review, the Federal Trade Commission must ensure that its COPPA rules include the full range of Internet-enabled or -connected services, including the increasingly ever-present cell phones children use, along with Web-connected gaming devices and online, interactive video.  Moreover, COPPA’s definition of personal information must be revised to include the latest methods of identifying and targeting online consumers, covering the so-called “cookies” that are used for interactive marketing data collection, as well as “mobile geo-location information.” With these and other necessary updates, the law will continue to ensure that children reap the benefits of the digital age without compromising their privacy, safety, and wellbeing.

Facebook: Ads, Data, and Dollars–its revenue comes from targeting “on users’ real life data”

Facebook execs frequently claim they don’t share their users personal information with advertisers.  They also always add that Facebook isn’t really that interested in advertising revenues.  But that’s not correct, as the Facebook Quarterly Business Review: Q1 2010 reflects.  Facebook, now cash positive, was said to earn somewhere between $600-700 million in revenues last year–up dramatically from the $150 million generated in 2007. The Quarterly estimates that Facebook should earn over $1 billion in 2010.  How?  “By growing multiple revenue sources, mostly around advertising,” it explains. Facebook is expected to earn some $350 million alone in 2010 from selling its ad services to big brands, with more growth expected.  In the last year, Facebook has “invested heavily in expanding its brand advertising efforts by opening up offices in Paris, Madrid, Milan, Hamburg, Sydney, Stockholm, Toronto and Los Angeles.”  The report says that Facebook will eventually earn some $20 billion a year, with a huge increase coming from big brand advertisers.

So-called performance advertising on Facebook [from social games, for example] is expected to bring in between $500-600 million this year.  There will also be additional revenues from Facebook’s virtual currency [and soon from mobile and location based marketing as well].

Facebook’s users aren’t informed about the datamining that occurs on what they post and communicate, including to their social networks.  We believe these systems require transparency and mechanisms of user control. And FTC and Congressional action.

Behavioral Targeting for fast food: Brought to you by Yahoo! and Dunkin Donuts

]How would customers–even for donuts– feel if they knew their information was collected so they could be profiled, tracked and targeted.  Read this excerpt from a new case study released by Yahoo!

Data becomes important in not only knowing what the customer wants, but also for getting them through the door. So Dunkin’ Donuts went online with a national Yahoo! campaign to gather data to drive in store sales; a strategy that franchisees can also use at the local level…The company primarily gathers its purchase behavior data through its Dunkin’ Donuts Perks Card (DD Perks), a rechargeable loyalty card that tracks data such as transaction amounts and time of day for purchases. Dunkin’ Donuts analyzes this data along with the information it gathers about its customers through website enrollments, gift card registrations, and point-of-purchase promotions to drive sales…Dunkin’ Donuts turned to Yahoo! because online marketing provided more accountability and engagement for the campaign…“You will know exactly how many people enrolled and how much you spent. You also know that it’s an efficient spend because you know those people are engaged, they opted in to get that communication, so they’re more likely to pay attention. Online is a persuasive tool, rather than a blunt instrument like broadcast,” says Tryder [David E. Tryder, Director of Interactive & Relationship Marketing at Dunkin’ Donuts].  Yahoo! helped Dunkin’ Donuts run a 41 day display campaign with promotions to encourage customers to enroll in its DD Perks program. Yahoo! Account Manager Steven Schmitt worked with Dunkin’ Donuts to implement behavioral targeting and to continually optimize the campaign to increase its performance.  The campaign garnered over 16,000 sign-ups and through continual optimization, enrollment increased 300% between the first 14 days and the last 14 days of the campaign…With demographic, geographic, and behavioral targeting, Yahoo! can help Field Marketing Managers and franchisees go online and provide that relevant and local messaging for consumers.

Perking up Dunkin’ Donuts Perks.   Yahoo Advertising.  May 18, 2010

Google to Host Online Ad Lobby as it Campaigns Against Privacy bill

Google is going to help the interactive ad lobby in its campaign to undermine privacy legislation.  The Interactive Advertising Bureau (IAB) plans a DC lobbying blitz on June 14-15, bringing in its cadre of small publishers.   As the IAB explains, “our day of advocacy gets underway as you divide up into teams for individual meetings with members of Congress and their staffs. Each team will be assigned a “chaperone” to help you make your way around the Hill, as well as answer any questions you might have.”

The message the IAB reps will make will undoubtedly be that the Internet way of life as we know it will end if Rep. Boucher’s proposal–or most any other bill protecting privacy–is enacted.  Sort of the Internet meets the film 2012:  all that will be left, if the data stops flowing for targeting, will be a handful of digital survivors.  Google, which serves on the executive committee of the IAB board [along with Microsoft, NBCU, Disney, CBS], plays a key role in the lobbying plans.  The small publisher/lobbyists are to be “guests of honor at a special networking reception and dinner at the Google offices in Washington, D.C.”  Presumably, at the “Cocktail Reception & Dinner – Courtesy of Google,” the troops will be rallied to the `defeat the privacy bill’ cause.  A guest speaker at Google HQ for the event is the IAB CEO Randall Rothenberg.

I know Google uses its facilities to host many meetings;  I have had lunch there and a dinner once at events where Google was discussing its data collection practices.  But Google claims to want to see meaningful national privacy legislation.  Yet they are aiding and abetting the anti-online privacy lobby (which is also leading the effort to undermine the FTC’s role in consumer protection).  The irony here is that Google appears to have successfully convinced Mr. Boucher that its ad preference manager system should be the basis for a safe harbor in the bill.  But Google likely wants to facilitate weakening even Mr. Boucher’s proposal–hence the dinner, drinks and cheer leading that will no doubt be heard across to Capital Hill next month.

Facebook teams with McDonald’s–location targeting for fast food giant part of a “bigger media buy”

Facebook is becoming a leading marketer for fast-food companies.  When one thinks about Facebook working to weaken privacy, keep in mind they want to better harvest user data to help sell ads and other marketing services to McDonald’s and others.  According to Ad Age [excerpt, sub. may be required]:

Facebook is preparing to launch location-based status updates for its users. But the social network is also planning to offer it to marketers, including McDonald’s. As early as this month, the social-networking site will give users the ability to post their location within a status update. McDonald’s, through digital agency Tribal DDB, Chicago, is building an app with Facebook would allow users to check in at one of its restaurants and have a featured product appear in the post, such as an Angus Quarter Pounder, say executives close to the deal.  Facebook is not directly charging McDonald’s to build the app; Facebook generally does not charge developers to build on its platform. But executives with knowledge say it was negotiated as part of a bigger media buy on Facebook, and McDonald’s will be the first marketer to take advantage of the service.

The fast feeder won’t be alone for long. While McDonald’s is expected to be involved in the rollout in the next few weeks, execs at other digital shops have begun to spec out location-based campaigns in anticipation of Facebook’s impending functionality, which will allow users to include their location in a status update.

…Kevin Colleran, director-national sales at Facebook…noted that Facebook has the world’s largest mobile application, with more than 100 million users each day.
source:  McDonald’s to Use Facebook’s Upcoming Location Feature:  Brands Eager to Build Apps Once Massive Social Network Launches Its Own Foursquare Competitor.  Emily Bryson York. Ad Age.  May 06, 2010

Online Advertisers Side with Kids Junk Food Marketers: Opposing Consumer Protection by FTC, Even to Address Childhood Obesity Epidemic

The Interactive Ad Bureau [whose board members include Google, Fox, NBC, Comcast] is working with the marketing and data collection lobby to oppose proposed Obama Administration legislation that would enable the FTC to protect consumers.  It’s clear from the comments below in Reuters, that the IAB is siding with those that don’t want to really address the youth obesity crisis.  If the FTC is allowed to conduct the same rulemaking procedures that the FCC and other agencies already do, it might actually be able to better protect consumers, including kids.  Shame on the IAB and its lobbyist colleagues for being on the side of those against the public health of our nation’s children.  By preventing the FTC to engage in consumer protection, the IAB, ANA and others are supporting the same deregulatory scheme which led to the current financial disaster for so many Americans and our economy.  Here’s the Reuters excerpt:

“A more powerful FTC could boost its oversight of advertising of sugary and salty snacks to children, the online collection of personal data by advertisers and green advertising, said Dan Jaffe of the Association of National Advertisers…This (financial reform/CFPA bill) is a fast moving train,” said Zaneis. “The FTC provisions that are likely to be added onto the CFPA bill really are industry’s no. 1 legislative priority.”

Ad Agencies Expand the role of Neuromarketing: Time for EU and US Regulation

The continued growth of neuromarketing to create advertising messages that are crafted to target a consumer (and citizen) subconscious mind should be a top policymaker concern–and we have raised this with both the FTC and EU.  Here’s an excerpt from a recent major marketing company’s plans to expand its neuroscience based efforts:


Millward Brown has tasked its head of innovations Graham Page with setting up a neuroscience division with the goal of supplementing its existing advertising research offer with techniques that aim to uncover the inner workings of the human mind.

Page, who takes the role of executive vice president of consumer neuroscience, said the agency was banking on the division as being one of its big growth areas this year.

Advertisers, he said, were becoming more receptive to approaches like electroencephalography (EEG) brainwave measurement, eye tracking and implicit association tests – all of which will be rolled out across Millward Brown globally in the coming weeks and months.

Page said the company had been experimenting with neuroscience techniques for six years, but the creation of a dedicated division marked “an important milestone”, while the research approaches themselves promised “a different perspective” on how consumers respond to advertising and brand communications… Page said some 60 projects had already been completed across the US, UK and Europe, with clients including Panasonic, Kraft and Royal Mail.Partner companies include EmSense, which supplies Millward Brown with the EEG equipment used to record consumer brain activity.

Ad Exchanges, Real-Time Auctioning of Users and Privacy: “our ability to target across many dimensions”

Last week, CDD, USPIRG and World Privacy Forum filed a complaint with the FTC asking it to protect the privacy of U.S. consumers.   Over the last two years, the growth of the data collection, tracking, analysis and targeting industry online–including the real-time auctioning off a consumer based on sets of their data–raises many concerns.  This blog will be covering the field, as CDD works to encourage the FTC and the EU to address the issue.  For now, it’s always useful to see what people from the online ad business say about these practices. In OMMA magazine, here are some excerpts from an article on the topic.

“We are definitely seeing the most exciting things for us in display in our ability to target across many dimensions,” says David Cohen, U.S. director of digital communications at Universal McCann. “Whether that is behavioral targeting or third-party data or our own platform – that is where we are seeing the most excitement – in targetability.” …“If you are an owner of display advertising, this is a great time to be in the marketplace,” says Dave Zinman, vice president and general manager of display advertising at Yahoo, which delivered 521 billion ad impressions in 2009… A new alphabet soup of suppliers and technologies emerged last year that promised at long last to apply better science to the art of display. Data providers like BlueKai or Media6Degrees helped marketers find the right audiences amidst the endless inventory of the Web. Much hope is circulating around real-time bidding (RTB) at ad-exchange engines like PubMatic, Yahoo’s RightMedia and The Rubicon Project. In these models, user data combines with real-time analysis of available inventory so an advertiser can buy individual impressions across a wide array of sites. Your ad appears only when just the right person hits a page… agencies have jumped on board with their own demand-side platforms (dsps) that buy inventory on the exchanges and networks along with third-party data in order to create their own audiences for clients…At the No. 2 seller of display, Fox, Mark Papia, senior vice president of the Fox Audience Network, is as enthused as anyone about the prospects for laser-targeting through the technologies and data layers that have been assembled over the last year. With 158 million uniques combined with data from Fox and 800 other publishing partners, he believes FAN has the scale and data to profit from next-gen display.

source:  Can Science Save the Banner?  Steve Smith.  OMMA.  April 2010.

The IAB’s Targeting/Data Collection Glossary: Oh, What a Tangled Privacy Threatened Web They Weave [Annals of Geo. Orwell meets Madison Ave.]

The Interactive Advertising Bureau has released for public comment a telling document that illustrates why Congress and the FTC need to develop some rules to protect consumers.  Take a look at the definitions the IAB has embraced on targeting and data collection–and ask yourself.  Based on what they say, can this really be–as the IAB claims–non personal information? Here are some of the definitions from the Networks & Exchanges Quality Assurance Guidelines [Feb. 2010]:

*Audience Targeting:A method that enables advertisers to show an ad specifically to visitors based on their shared behavioral, demographic, geographic and/or technographic attributes.  Audience targeting uses anonymous, non-PII data.

*Behavioral Targeting:  Using previous online user activity (e.g., pages visited, content viewed, searches, clicks and purchases) to generate a segment which is used to match advertising creative to users (sometimes also called Behavioral Profiling, Interest-based Advertising, or online behavioral advertising).  Behavioral targeting uses anonymous, non-PII data.

*Attribute – A single piece of information known about a user and stored in a behavioral profile which may be used to match ad content to users.  Attributes consist of demographic information (e.g., age, gender, geographical location), segment or cluster information (e.g., auto enthusiast), and retargeting information (e.g., visited Site X two days ago).  Segment or cluster information is derived from the user’s prior online activities (e.g., pages visited, content viewed, searches made and clicking and purchasing behaviors).  Generally, this is anonymous data (non-PII).

*Behavioral Event – A user-initiated action which may include, but not limited to: searches, content views, clicks, purchases, form-based information and other interactions.  Behavioral events are anonymous and do not include personally identifiable information (PII).

*Clickstream Data – A Clickstream is the recording of what a computer user clicks on while web browsing.  As the user clicks anywhere in the webpage or application, the action is logged on a client or inside the web server, as well as possibly the web browser and ad servers.  Clickstream data analysis can be used to create a user
profile that aids in understanding the types of people that visit a company’s website, or predict whether a customer is likely to purchase from an e-commerce website.

*Cookie – A small text file sent by a website’s server to be stored on the user’s web- enabled device that is returned unchanged by the user’s device to the server on subsequent interactions.  The cookie enables the website domain to associate data with that device and distinguish requests from different devices.  Cookies often store behavioral information.

*Cross-site Advertiser Analytics – Software or services that allow an advertiser to optimize and audit the delivery of creative content on pre-bought publisher inventory.  Data can range from numbers of pages visited, to content visited, to purchases made by a particular user.  Such data is used to surmise future habits of user or best placement for a particular advertiser based on success.


*Deep Packet Inspection – A form of computer network packet filtering that examines the data and/or header part of a packet as it passes an inspection point. In the context of online advertising, it is used to collect data, typically through an Internet Service Provider, which can be used to display targeted advertising to users based on previous web activity.

* Retargeting (or re-targeting) – The use of a pixel tag or other code to enable a third-party to recognize particular users outside of the domain from which the activity
was collected. See Creative Retargeting, Site Retargeting.

*Creative Retargeting:  A method that enables advertisers to show an ad specifically to visitors that previously were exposed to or interacted with the advertisers’ creative.

*Unique User – An individual user that has interacted with online content, which is smaller than or equal to the number of cookies observed.  The number of unique users to a website is usually an estimate.  

Yahoo to Pharma Marketers: Come `Engage’ & Target Health Consumers Online


As my CDD has explained to both the FDA and FTC, the digital marketing of drugs and health information require serious privacy and consumer protection safeguards.  What may be acceptable when selling cars & travel online using the online ad tool-set is not appropriate when transferred wholesale to such sensitive categories as drugs.  Here’s an excerpt [pdf] from Yahoo!s promotional piece entitled “Social Media:  Pharmaceutical Marketing in the Age of Engagement.”

Social media marketing is a compelling opportunity for pharmaceutical companies to reach their most influential audience. Recent research conducted by Manhattan-based Hall and Partners Healthcare found that online health consumers are hyper-engaged and leverage almost twice as many information sources

to learn about disease states and prescriptions than the average consumer… For every creator of content – a physician writing a blog, for example – there are

roughly 10 synthesizers actively commenting, sharing, rating and reacting. For each group of synthesizers, roughly 100 consumers read, watch, listen and enjoy

while participating only occasionally. All three of these groups have a valid place within the community. event forms. Just as we have built communities of physicians who speak openly with each other about our products, we have an opportunity to nurture and learn from consumer communities as well. First, we must listen with intent…Analyzing what you hear can reveal a gap in consumer awareness. What’s more, a number of tools have emerged to help consolidate the vast array of social media input, from free online evaluators like Intelliseek, to sophisticated and customized tracking services like Cymfony. Once marketers have a firm grasp on the language, attitudes, brand perceptions and key COLs in their consumer community, pharmaceutical company participation can range from targeted media placement to integration and empowerment. All approaches are open to branded or unbranded programs…