The Brandwashing of America: Micropersuasion in the Digital Era. Adapted from my new book, Digital Destiny

(The following commentary was published by Advertising Age online, Jan. 9, 2007)

‘Digital Destiny’ Author Jeff Chester on How New Media Is Causing the Brandwashing of America

Published: January 09, 2007

We are witnessing the creation of the most powerful media and communications system ever developed. A flood of compelling video images propelled by the interactivity of the internet will be delivered though digital TVs, PCs, cellphones, digital video recorders, iPods, and countless mobile devices. These technologies will surround us, immerse us, always be on, wherever we are — at home, work or play.

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Jeff Chester is the executive director of the Center for Digital Democracy, Washington a nonprofit policy group focusing on digital communications. | ALSO: Comment on this issue in the ‘Your Opinion’ box below.

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Following our travels
Much of the programming will be personalized, selected by us with the help of increasingly sophisticated, but largely invisible, technologies that will “sense” or “know” our interests, dislikes, and habits. Information about our travels — in cyber and real space — will be collected and stored, most often without our awareness. Our personal data will be the basis of computerized profiles that quickly generate commercial pitches honed to precisely fit our psychology and behavior.

A ubiquitous system of micropersusaion is emerging, where the potent forces of new media are being unleashed to influence our individual behavior. From the ad industry’s initiatives to better perfect measures such as “engagement,” to the MI4 research effort (Measurement Initiative for Advertising, Agencies, Media and Researchers) to harness the power of the unconscious mind, to the rapid evolution of “rich media” virtual applications, a marketing technological “arms race” is underway that will further permeate advertising and marketing in our daily lives.

Wherever we are — online or in the street connected by mobile devices — Americans (and much of the world) will be increasingly influenced by the technologies of digital marketing. Such a system will be greatly aided by the scores of supplemental “real world” marketing efforts, including teams of viral street marketers and brand evangelists (many of whom are not yet old enough to vote!).

Increasing power
The ad industry likes to claim that the public has more control over what advertising they see or whether they like it at all. Many Ad Age readers point to the increasing expansion of the media and argue that advertising is now less powerful. But such assertions are disingenuous. Fueled by global media consolidation, advertisers are now working even more closely with content companies. Product placement has morphed into “program” placement and beyond. Like radio and the early days of broadcast TV, marketing, distribution and content are increasingly seamless. The broadband internet, digital TV and new forms of mobile communications are all being shaped by the forces of marketing. As I argue in my new book, “Digital Destiny: New Media and the Future of Democracy,” advertising is becoming more powerful, not less.

In the book, I chronicle the ad industry’s role in helping shape the early development of the internet, including how groups and companies such as the Advertising Research Foundation (ARF), Procter & Gamble Co., and The New York Times promoted what was once called the “Internet Advertising Ecosystem.” It covers the evolution of the “one-to-one,” “new media” marketing paradigm that still serves as the industry’s basic digital blueprint (further fueled today by sophisticated off- and online data collection, web analytics, interactivity and the branding power of video). The ad industry’s substantial research and political infrastructure — including ARF, Association of National Advertisers, American Association of Advertising Agencies, Interactive Advertising Bureau, its many councils and committees and global groups such as Esomar — are also explained.

From online “behavioral targeting” to interactive ad networks to “virtual hosts” and other “socially intelligent interfaces,” the book attempts to lay bare what marketers plan for the country’s “digital destiny.” Although readers of Ad Age know well what is now underway and its likely impact, the public is largely uninformed. One of my goals is to encourage a meaningful national debate about the current direction of the ad and marketing industry and its impact on society.

Let consumers decide
One of the most serious concerns is about privacy. Most marketers and advertisers are opposed to permitting consumers/users to have real control over their data. They want the default to be the collection of information so we can be precisely targeted. That’s why privacy groups, including my own Center for Digital Democracy (CDD), want Congress to pass legislation requiring a full disclosure of what information is being collected, via what method, and how it is to be used. After examining such details, each consumer would decide on a periodic basis whether to agree to permit the collection of their data (known as “opt-in”).

The current “opt-out” system, where consumers have to proactively seek to place their personal information off-limits, is designed to ensure that most consumers consent by default to data collection. New threats to our privacy from marketers and advertisers have emerged, including behavioral targeting, online retargeting (where consumers are digitally shadowed over ad networks), and the emergence of “intelligent ad engines” placed in cellphones and other mobile devices.

Recently, CDD and the U.S. Public Interest Research Group jointly filed a petition with the Federal Trade Commission asking the agency to declare many of today’s interactive advertising industry practices, including behavioral targeting and virtual advertising, unfair and deceptive. It appears that the FTC is now slowly lifting its head out of the digital sand to seriously investigate the industry based on our complaint. But it will take prodding from the new Congress to get the FTC to act.

Safeguards for new technology
Beyond privacy, interactive-marketing technologies also raise unique concerns about “vulnerable” populations. Unleashing personalized and cyber-virtual marketing to children, teens, prescription-drug users, and the elderly raise important questions related to public health. These groups will need to be protected with new safeguards. But even more is at stake. The entire system of interactive advertising must become more transparent and requires intense public scrutiny, debate, and — where needed — effective public policies.

For example, advertisers are now working to harness the power of our emotions through research on “neuroscience” and “psychophysiology.” As the ARF and AAAA explained in 2005 during Advertising Week, the industry wants to “capture unconscious thought, recognition of symbols and metaphors.”

“Emotional responses can be created even if we have no awareness of the stimuli that caused them,” the ARF and AAAA noted. Such potential manipulation of a consumer’s unconscious will be even more powerful when delivered by virtual agents (such as avatars) that have been fashioned (via data profiling) to dovetail with our desires and interests.

What’s the long-term impact?
I fear that such a powerful psychosocial stealth-marketing machine, backed by the yearly expenditure of many billions of marketing dollars, will drive personal consumption to greater excess. What will be the impact on our environment, such as global warming, as a steady stream of interactive marketing messages are planted deep into our brains wherever we go? Will the digital push to buy and positively associate with brands promote an even more narcissistic human culture? What will be the impact of our personalized communications marketing system on the healthy development of children, families and communities?

The ad and marketing industries have an important role to play in our society, especially helping financially support news, information, and entertainment services. I recognize that advertising will continue to be a very powerful force in our lives. But marketers need to demonstrate greater social responsibility. They must ensure that consumers fully understand and consent to digital techniques; make certain that approaches to target our emotions and other brain behaviors are truly safe (including the impact of virtual reality); and, most importantly, help our media system evolve in a way that strengthens civil society.

Such a goal is not for the U.S. alone, but also involves how the marketing industry serves the public in the developing world. For example, what will be the impact on the world environment as China’s emerging digital infrastructure is bombarded with one-to-one commercial messages promoting automobiles?

The creation of a broadband media system will be viewed by future generations as one of our society’s most significant accomplishments. Will it be seen as one of the highest achievements for a democracy, a place in cyberspace that helped enrich the lives of many and offered new opportunities for an outpouring of cultural and civic expression? Or will it been seen years hence as a new version of what the late scholar Neil Postman aptly described as a medium even more capable of “amusing ourselves to death”? The readers of Ad Age will help determine that answer.

~ ~ ~
This column was adapted from Mr. Chester’s new book “Digital Destiny” (The New Press, 2007).

Time Magazine: You’ve Got Hypocrisy

Time’s person of the year issue named You– and everyone else—as its annual award recipient. Hailing what it called “Citizens of the New Digital Democracy,” the Time Warner flagship publication breathlessly published a series of exuberant articles about how the new media is dramatically changing our country and the world. “You control the Information age” claimed the magazine headline, complete with a mirror-like cover device so you could admire yourself. But the failure of Time to seriously address the key issues raised by Web 2.0 and broadband illustrates the many hurdles to overcome if we are to have any semblance of a digital democracy.

Perhaps the best example of Time’s failure to truly be honest with readers/users was its failure to address the elimination of network neutrality. Time magazine’s parent company is one of the corporate leaders opposed to an open and non-discriminatory Internet. Time Warner is part of the cable industry lobbying apparatus that has eliminated broadband non-discrimination in the U.S. If Time Warner–and its allies Comcast, Verizon and AT&T–have their way, a handful of cable and phone conglomerates will actually determine much of our digital destiny. These old media giants want to extend their monopolies into the digital era, ensuring that their content receives preferential treatment; that broadband becomes a pay as your surf and post toll-road; and that they become powerful barons of the digital domain.

Time magazine should have acknowledged that its parent company is opposed to limits on media consolidation. It wishes to own as much of cable as it can (so it could continue to swallow up cable systems, such as what it and Comcast recently did when they carved up giant Adelphia cable). The magazine should have acknowledged that its parent once before had predicted great things for the U.S. public with new media—when AOL and Time Warner merged in what was then the largest media merger in U.S. history. It should have acknowledged the numerous lies given by Time Warner executives to shareholders, consumers, and policymakers when it claimed to be a sound and public-minded deal.

The cover story should have acknowledged how the new media poses great threats to our privacy, as data is collected about our every move by AOL and many others. It should have discussed how Time Warner’s AOL made public our personal search data, and also turned over records about our searches to the Bush Administration. Instead of mindlessly claiming that to see the future of our media we should look at raw videos on YouTube, it should have said that the public should learn about how Time Warner’s interactive ad subsidiary—Advertising.com—targets us with personalized digital marketing.

As we discuss in our new book—out tomorrow—much of today’s new media “vision” is driven by a desire to create a stronger mechanism for personalized and targeted interactive marketing. Companies such as Time Warner, Google, and Yahoo want to combine the branding power of video with the data collecting and interactive capabilities of the Internet. It will be a digital democracy shaped by Madison Avenue. That was the vision originally developed for our new media future by AOL and Time Warner’s leaders Steve Case and Richard Parsons. Much of Web 2.0 is based on that vision: a system designed to promote the “brandwashing” of America.

Yes, we have endless possibilities with new media, including the Web 2.0 paradigm. But powerful political and economic forces will shape what ultimately develops. If Time Warner has its way, they will hold a key copyright over our digital democracy.

New York Times and Network Neutrality: Great position. But the paper needs to disclose its own conflicts on the issue

This week the New York Times editorial page weighed-in to support national legislation requiring network neutrality (“Protecting Internet Democracy,” January 3, 2007. Reg. may be required). We share those sentiments, of course. It’s time for a law that restores and extends Internet non-discrimination in the U.S. But we also believe that news organizations need to inform readers/viewers/users about how their own corporate relationships are affected by communications policy issues. The New York Times Co. is staking much of its future on digital media, including interactive advertising. For example, it acquired the About.com informational web service in 2005 for $410 million. The goal, said Times Co. officials, was to “increase the company’s revenue from the expanding online advertising business.” The Times Co. has historically been a leader in developing interactive marketing techniques, including so-called “surround sessions” which enable advertisers to digitally follow New York Times online users as they access the paper electronically. Indeed, as we cover in our new book, Digital Destiny, the Times Co.’s Martin Nisenholtz (who heads its digital operations) has been a key ad industry leader promoting the advance of interactive data collection and personalized targeted marketing. Few Times readers and users really understand what the Times Co. is doing with all this data in the service of its advertisers.

The Times Co. requires network neutrality—otherwise it knows it will have to pay a digital version of the Mafioso-like vig to Comcast, Time Warner, Verizon and AT&T. The major phone and cable conglomerates want to charge everyone an assortment of fees for higher-speed Internet distribution, creating a de facto pay toll road for broadband. Given that everyone will be distributing video-centered multimedia to TV’s, cell phones and PC’s, having such “premium for a price” Internet access will be a necessity to prosper in the Web 2.0 and beyond era. Therefore, the Times Co must have network neutrality if its investments in About.com and other “new media” related strategies will return the profits to help support its journalism (which is a key reason why the country requires network neutrality. Without it, serious journalism will be in future jeopardy—as it is today).

Today, the Times reported that its parent company was selling off its television station group. It’s another indication that the Times Co. (wisely) understands its future lies with broadband. But the success of such a business model depends in part on an open Internet. We believe that the Times should have explained to its readers that when it supports network neutrality, it has its own financial future at stake. The paper, and the rest of the Times properties, should also begin to inform its users about the range of data collection and targeted electronic marketing its doing. Complete and full disclosure should be the rule—not an after-thought serving as fodder for bloggers.

CDT Works to Undermine the Public Interest in Broadband/ Allies with PFF

The Center for Democracy and Technology (CDT) has long served as part of the political support system for the telecom and media industries. While many view CDT as a privacy group, a great deal of what the organization does benefits its corporate supporters—which have been some of the biggest media and data collection companies in the country. They have included Axciom, Doubleclick, Time Warner, AT&T, Microsoft, Yahoo!, Google and Intel.

Now, CDT has joined forces with one of the key corporate funded groups that has been leading the charge against network neutrality: the Progress and Freedom Foundation. PFF, co-founded by Newt Gingrich, is also supported by numerous corporate media/telecom interests, including Murdoch’s News Corp. (Fox), AT&T, BellSouth, Comcast, Clear Channel, GE/NBC, Google and Microsoft.

Yesterday, the two groups jointly filed amicus briefs in federal courts supporting News Corp./Fox and NBC’s efforts to undermine the ability of the FCC to regulate communications. The TV networks are fighting the FCC’s recent decisions on broadcast indecency. But the CDT/PFF filing wasn’t only about over-turning the FCC’s foolhardy and inappropriate efforts on so-called indecent content. The message CDT and PFF gave to the courts was they should rein in any effort by the FCC to ensure that the public interest be served in the digital media era. The filing claims that convergence of various media, including the Internet, make any policy role for the FCC related to diversity of content a threat to free speech itself. A very convenient argument that must warm the hearts of both CDT’s and PFF’s corporate funders, because they are precisely the companies who wish to avoid having a public interest regulatory regime in broadband.

Missing from the brief is any discussion of the regulatory areas for broadband (including PC, mobile, and digital TV [IPTV] platforms) that will require federal policy, including a key role for the FCC. Among them, ensuring an open, non-discriminatory content distribution policy for the Internet—network neutrality. Other rules that will require FCC action in the broadband era include ensuring “free” and “equal” time for political speech; diversity of content ownership, including by women and persons of color; localism; public service; privacy; and advertising regulation. There will need to be ad safeguards, for example, protecting children from interactive marketing that promotes obesity as well as with prescription drug ads targeting seniors via immersive “one-to-one” media techniques.

CDT and PFF argue that the new media environment provides the public with greater choice, another reason they urge the courts to limit FCC authority. But what’s really happening with digital media is that we are facing a system where the “choices” are being meaningfully reduced by the market. Wherever the public goes, the forces of conglomerate media and advertising will confront them. Consider, for example, News Corp.‘s MySpace now running Fox programming. (It’s interestingly, by the way, that neither CDT nor PFF told the courts that they have a financial relationship with some of the interests involved in the indecency debate).

We have long opposed FCC efforts to “regulate” indecency, including being critical of FCC Commissioner Michael Copps (whom we otherwise strongly admire). The indecency effort by the FCC has helped let it become vulnerable to this attack by the media conglomerates, and their supporters, who have a longstanding political agenda aimed at sweeping away all regulation and safeguards. Fox, NBC, Viacom, Disney and the rest want a U.S. media system where they can own as many media outlets as they want, not have to do any public service, nor worry about regulators concerned about threats to privacy and interactive marketing abuses.

The emerging broadband era in the U.S. will see us face further consolidation of ownership of media outlets, including the Internet, as well as an increase in overall commercialization. The cry that Wall Street has for broadband is “monetization.” But our electronic media system must also serve democracy—not just the interests of those who want to make money. Civic participation, public interest civic media, and safeguards from content and services designed to manipulate us must be addressed. There is a role for the FCC in all this. (We shouldn’t throw-out as “bathwater” the potential of our broadband media to serve democracy and a role for the FCC because we are upset about it catering to zealous social conservatives who don’t like some programming).

Finally, shame on CDT for joining up with PFF. PFF is an opponent of the network neutrality policy for the Internet. It has also long opposed any meaningful role for the FCC. But, perhaps that’s the point. If PFF gets it way, its backers–and many of CDT’s–will be free to do as they please, regardless of the consequences to our democracy.

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Online Ad and Data Collection Watch

My group has launched a new project to keep the public better informed about the latest threats to our privacy. Click here to visit Online AdWatch. It will regularly highlight new developments in the interactive ad marketplace across the PC, mobile, and digital TV platforms. Send me your favorite examples of technologies, applications and market strategies that should be included.

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NetCompetition.Org: They Have Drunk Too Much Cable/Telco Lobby Kool-Aid

We hate to focus too much on this Telco-Cable industry funded lobbying effort. But its latest [9/29] self-heralded “one-pager” attacking network neutrality proponents requires a response (we admit we may have come down with a Sen. Stevens form of `fetish’ about this lobbying site). Netcompetition’s analysis comes from a naive view of the realities of the broadband market. The paper paints a glowing picture of what it believes is emerging broadband competition. Hence, with such prospective abundance of networks and content likely, it argues that the country ignore the calls for safeguards coming from net neutrality supporters. We are, suggests Scott Cleland, experiencing “unfounded pessimism and fear about the future of broadband…”

First, we have to say that history is on our side. Despite all the talk and proclamations about bypass and competition—we haven’t had much in the multichannel and telecom sector. It’s been a sad story of consolidation and broken promises. Two, Mr. Cleland is ignoring the powerful triple/quad play now being deployed by his funders. Their networks—and content applications and partnerships—will dominate our TV, PC, and mobile experience for many years. The current state of broadband concentration–along with the emerging marketplace conditions–should be unthinkable in a democracy. Two companies control the cable industry; two will dominate the telephone market. Already, old media incumbents are swallowing new players—such as the News Corp. takeover of MySpace. There is tremendous consolidation throughout the digital content marketplace.

Hey Netcompetition. Your argument that just over the hill our digital media system is awash in a Wizard of Oz golden glow doesn’t cut it. We need safeguards now.

It’s not pessimism, but honest realism with an eye on the needs of our democracy. That’s a currency in too short supply in the nation’s capital.

Shame on the GOP and Dems in California: Gutting Community Oversight of Broadband

If we ever needed evidence about how both major political parties are in the pocket of the telecommunications industry’s very deep pockets, all we need to do is look at California. The new cable law kills the historic and critical role local governments have played in ensuring cable systems are held accountable and required to do public service. Now all franchising (the licensing of cable systems) will be governed by a single statewide agreement. Doling out these “one-size fits all, lowest common denominator” deals will be the feckless Public Utility Commission.

Democratic honcho Fabian Nunez, the Speaker of the Assembly, concocted the new law. Yesterday, GOP Gov. Arnold Schwarzenegger signed it. According to the Los Angeles Times, “AT&T spent $18 million through June lobbying and running television and full-page newspaper ads urging consumers to support the Nuñez bill — and then to thank Nuñez after it passed the Legislature.” [registration required]

The argument that Nunez and his Verizon and AT&T pals made to pass the bill was that only by gutting local oversight could California see cable competition. Boy, these folks should be ashamed. They have removed the key mechanism designed to ensure broadband networks serve local needs. There won’t be any serious competition—in either price or content. Just a few extra giants who are now free to run roughshod over both the cable TV and broadband business.

But money and power talks—and Nunez, Schwarzenegger and company played ball. Both parties in California have helped turn over a sizeable part of the country’s broadband resources to the very same interests which eliminated network neutrality.

PS: We note in the Los Angeles Times story the generally approving comments for the bill from USC’s Jeff Cole, the executive director of its Center for the Digital Future. Cole should have said [and the reporter should have identified if he did] that his center’s “Board of Governors” includes executives from AT&T (and other interests that supported the bill). As I said, money talks—with policymakers and too many “educational” institutions.

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Glover Park Group—Rupert Murdoch’s Flack Comes Out Against Open Net/ Sen. Stevens Uses Stealth Verizon-Paid Poll to Undermine Public Interest

The folks at the Glover Park Group—who last year helped conduct a stealth campaign to aid Rupert Murdoch—are now assisting Sen. Ted Stevens wreck the U.S. electronic media system. Stevens’ Commerce Committee released a poll yesterday slamming “onerous Net Neutrality regulations.” The Verizon-paid for poll illustrates how desperate Sen. Stevens and his phone/cable monopoly allies are (nothing about Verizon’s sponsorship is cited in the release or the poll—something the Commerce Committee should apologize to the public for).

Stevens and company can’t really speak about the substantive issues involving Internet Freedom—because they lose. So Stevens and allies now appear to be hanging their argument supporting a closed Internet on a poll finding that only “very few registered voters are familiar with the issue of network neutrality.” As if the lack of public awareness about an important policy issue means something is wrong with it! Hello. Has the Senator been swallowing those tubes, instead of using them to get his talking points from the Glover Park Group flackery shop?

Now, to the “bipartisan” Glover Park Group (which did the poll with Public Opinion Strategies). Aren’t we tired of Democrats who take the big bucks and the public interest be damned? This poll was written to help phone companies scuttle policies designed to provide community oversight of electronic media. The poll should come with a warning: “this is a political tool.” That Stevens, Glover Park, and Public Opinion would hold it up as some objective measure is a sad joke. It’s a lobbying love letter for Verizon, AT&T, BellSouth and the USTA. It asks questions about network neutrality purposely designed to undermine it as an issue. Perhaps that’s why the poll doesn’t reveal who funded it. Such well-known Democratic operatives as Howard Wolfson, Joe Lockhart, and Carter Eskew run Glover Park. In 2005, the group helped Rupert Murdoch organize a campaign designed to keep bringing in extra cash for his Fox TV empire. Press reports say they also have worked for big cable companies as well.

By helping the phone lobby create a closed Internet, the Glover Park Group is undermining the country’s democracy. What great credentials alongside working for Fox.

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Hey, Big Spender: Telco’s and Cable Buy Favor on the Hill

The National Journal’s excellent David Hatch has kept his journalistic eye on all the telecom/cable lobbying money flowing in to Congress. Millions are being spent to keep lawmakers favorably disposed against net neutrality and other broadband safeguards. The majority of AT&T’s giving (67%) has gone to the GOP. Other big spenders include Comcast, BellSouth, Verizon and Time Warner (the latter should spend less on lobbying and more on privacy. But, of course, they really don’t want to).

Read David’s article. See how Speaker Hastert, House Commerce chair Joe Barton and many others have done well for themselves. And then follow the money when the voting on network neutrality comes this fall.

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Telco CEOs to the Internet: We Own You and You Will Never Be Free

Top execs from Verizon, Qwest, and the USTA lobbying machine attacked the concept of network neutrality yesterday. They spoke at the annual lobbyist love-fest run by the Progress and Freedom Foundation. The exec remarks make clear that the leadership of the U.S. telephone industry is hazardous to the Internet’s health. For example, Verizon’s Tom Tauke dismissed concerns about what will happen to our democratic rights now that neutrality is lost. For the former Congressman turned top lobbyist, there are only consumer interests. “…I believe,” he said, “there is now an emerging consensus” that’s it’s all about consumers, reported Communications Daily [Aug. 23, 2006. Subscription only]. He said that calls for “non-discrimination” were coming from advocates of “old rules” (he meant the policies that made the Internet an open forum]. Meanwhile, the chief of the United States Telecom Association–Walter McCormick–said that his members “would oppose any bill with strong net neutrality language.” Qwest CEO Richard Notebaert chimed in that there was “no need for Congress to act where there’s no problem…”

Bolstering the industry’s jeremiad was the chief staffer for House Commerce chair Joe Barton. Howard Waltzman predicted, “there would not be a bill sent to the president that included [non-discriminatory net neutrality requirements] because the House would not agree to it.” Waltzman, the majority chief counsel, also proclaimed that “the Snowe-Dorgan amendment” requiring net neutrality would fail in the Senate.

These are the people—along with their bosses—who are placing the business plans of a few special interests before everyone else now online. Web 2.0 will be shaped to fit their image of broadband unless they are stopped.

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