The top execs at Facebook claim that the social network giant ad targeting apparatus is well understood by its users, and that they have secured their consent. But I suggest few users understand the complexities of Facebook’s viral marketing and tracking system, let alone the new Facebook/Nielsen “Brandlift” initiative designed to demonstrate Facebook can deliver big for the biggest brands. According to New Media Age:
More than 70 studies have been done in the US in the FMCG, retail, media and entertainment, telecoms, financial and automotive sectors. Nielsen and Facebook said 97% of these found a significant lift in at least one brand metric, while 85% reported an increase in at least two. “Starbucks is a heavy advertiser on Facebook,†said [Trevor Johnson, head of strategy and planning EMEA at Facebook] Johnson. “We ran a campaign to get people to buy a muffin on a certain day and measured a 94% uplift in purchase intent. Facebook will apply the demographic data it already collects from its users to deliver results tailored to brands’ needs.
Category: consumer protection
What the new online ad industry-sponsored plan to identify Behavioral-Targeted Ads and Data Collection with the letter “i†really stands for: ineffective [And should be relabeled “IDâ€â€”Ineffective and Disingenuous]
Statement of Jeff Chester, executive director, Center for Digital Democracy, Washington, D.C. www.democraticmedia.org
A new self-regulatory scheme designed to head-off meaningful consumer privacy rules by Congress and the Federal Trade Commission is to be released today, according to several reports. In addition, the Council of Better Business Bureaus has issued a RFP asking for technology solutions to bolster its online advertising self-regulatory approach.
These efforts are trying to place a flimsy band-aid over a gushing consumer data privacy wound. Disclosure and more opportunities to opt-out is an online ad industry copout. Interactive marketers have created a data collection monster. What’s needed are Fair Information Principles for the digital age, enforced by regulators, which dramatically minimize how much data is collected, stored, sold and resold–and limit how it can be used.  Instead we get fancy package relabeling fashioned by Madison Avenue.
Consumers face a bewildering, far-reaching, and complex system created by the online ad business that collects and harvests their information—including financial, health, and other personal details—that is non-transparent and unaccountable. These new self-regulatory initiatives are disingenuous, because they don’t address the real problem: that through a range of largely stealth online marketing techniques, digital media has been designed to ensure that consumers provide reams of their personal data.
As the FTC holds its second privacy hearing this Thursday, and as the House Commerce Committee finalizes its proposed legislation, policymakers must ask themselves: how can we do a better job protecting consumers–instead of enabling the same kind of self-regulatory approach that helped bring our economy to the brink of disaster. Consumers and lawmakers should especially be concerned that the approach backed by Truste and Future of Privacy Forum will permit monopolistic broadband Internet Service Providers, such as Comcast and AT&T, to gather even more personal information on their subscribers.
Civil Liberties, Consumer & Privacy Groups to FCC: Protect Privacy
The American Civil Liberties Union, Center for Digital Democracy, Consumer Action, Consumer Federation of America, Consumer Watchdog, Privacy Lives, Privacy Rights Clearinghouse, Privacy Times, and U.S. PIRG told the FCC in a filing 22 January 2010 that: “There are significant problems concerning the collection and use of personal data by companies, especially sensitive data and children’s data; (2) The FCC should not rely on industry self-regulatory models because they do not adequately protect consumer privacy; and (3) The principles and standards that should serve as the foundation of consumer privacy protection should be the Fair Information Practices, especially as they are implemented in the OECD Guidelines on data privacy… The FCC should consider all avenues it may use to protect consumers, including exercising its ancillary jurisdiction to address broadband privacy issues, and working with Congress and the Federal Trade Commission (“FTCâ€), which has substantial expertise in consumer privacy protection.”
To learn more, click here.
Where Does Google and Microsoft Really Stand–with the IAB and ad lobby or for Consumer Protection?
Both Google and Microsoft serve on the executive committee of the Interactive Ad Bureau, a trade association fighting against consumer privacy proposals in Congress and the FTC. The IAB just sent a letter signed by other ad and marketing industry lobbyists opposing Obama and congressional proposals to expand the ability of the FTC to better protect consumers. My CDD just sent emails to officials at both Google and Microsoft asking them to clarify where they stand on the IAB’s letter [see below]. Do our two leading online marketing leaders support financial and regulatory reform, including protecting privacy? Or does the IAB letter–and Google and Microsoft’s own role helping govern that trade lobby group–really reflect their own position against better consumer protection? Not coincidently, the IAB’s PAC has expanded its PAC contribution giving to congress.
Why does the IAB and other ad groups want to scuttle a more capable FTC? Think online financial products, including mortgages, pharmaceutical operated social networks, digital ads targeting teens fueling the youth obesity crisis, ads created by brain research to influence our subconscious minds, a mobile marketing system that targets us because it knows our location, interests and behavior. The IAB is terrified that a responsible consumer protection agency will not only peek under the ‘digital hood,’ as the Obama FTC is currently doing. But actually propose policies and bring cases that rein in irresponsible and harmful business practices. So Microsoft and Google: who are with? Consumers or the special interest advertising lobby?
*****
letter to Google:Â 22 January 2010
Dear Pablo, Jane, Peter and Alan:
As you may know, the Interactive Advertising Bureau recently sent a letter to Congress, along with other ad related groups, opposing the expansion of FTC regulatory authority as proposed in the Consumer Financial Protection Agency bill and related reauthorization [http://www.clickz.com/3636212].
Google serves on the executive committee of the IAB’s board. For the record, does Google support IAB’s stance that, as news reports say, if the FTC is given additional enforcement and penalty-making authority, “the FTC could essentially act as an unelected legislature governing industries and sectors across the economy.”
If Google disagrees with the IAB’s letter, I ask that it make its position public as soon as possible. I also respectfully request Google state its position regarding the Consumer Financial Protection Agency proposal, as well as its position on expanding FTC authority.
Regards,
Jeff Chester
Center for Digital Democracy
www.democraticmedia.org
letter to Microsoft:Â 22 Jan. 2010:
Dear Mike and Frank:
As you may know, the Interactive Advertising Bureau recently sent a letter to Congress, along with other ad related groups, opposing the expansion of FTC regulatory authority as proposed in the Consumer Financial Protection Agency bill and related reauthorization [http://www.clickz.com/3636212].
Microsoft serves on the executive committee of the IAB’s board. For the record, does Microsoft support IAB’s stance that, as news reports say, if the FTC is given additional enforcement and penalty-making authority, “the FTC could essentially act as an unelected legislature governing industries and sectors across the economy.”
If Microsoft disagrees with the IAB’s letter, I ask that it make its position public as soon as possible. I also respectfully request Microsoft state its position regarding the Consumer Financial Protection Agency proposal, as well as its position on expanding FTC authority.
Regards,
Jeff Chester
Center for Digital Democracy
www.democraticmedia.org
Facebook Teams with JP Morgan Chase in Campaign Targeting Charities. But what about the bank’s role in the financial scandal?
As we have reported, banks and other financial institutions are using digital marketing techniques, especially social media, as part of their PR efforts. Banks want to reposition themselves as our friend, and hope we will forget their role in helping bring us the greatest financial disaster since the Great Depression. In it’s current voting contest for charities, “Chase Community Giving” will award $1 million to the charity getting the most votes (with $4 million doled out to others). One of the advisors for this effort is Facebook’s exec in charge of its PR and lobbying Elliot Schrage.
Nothing said, of course, of Chase’s role in the economic crisis, including the bail-out funds it received [click here to see the Facebook/Chase video]. Meanwhile, Chase gets Facebook’s help, likely including lots of data on user behavior.
Facebook’s Ad “Targeting Specs”–including your “Political Views,” whether you are “13” years old, or “Engaged”
We continue to tell both the FTC and EU regulators that the data collected and used by Facebook for its ad targeting system must be under the control of its users. Facebook is in the process of making its advertising API available to additional marketers (it’s been working with several large global ad agencies in a trial). Here’s what Facebook says advertisers can target: countries, cities, regions, genders, college networks, work networks, age minium [“Specify a minimum age to target. If used, this must be 13 or higher.”], age maximum, education status, college years, college majors, political views [“Use 1 for LIBERAL, 2 for MODERATE and 3 for CONSERVATIVE”], relationship status [“Use 1 for SINGLE, 2 for IN_RELATIONSHIP, 3 for MARRIED and 4 for ENGAGED.”], keywords [“Keywords are matched to user profile data to better target ads for example “movies” or “cars” can be used’], interested in, radius, connections [“Connections targeting allows you to target your ads to users who have become a fan of your Page, a member of your Group, RSVP’d to your Event or authorized your Application.”], excluded connections [“Excluded connections targeting allows you to target your ads to users who have not become fans of your Page, members of your Group, RSVP’d to your Event or authorized your Application.”], friends of connections [“An array of Facebook IDs. “Friends of connections” targeting allows you to target friends of your connections. Connections are fans of your Page, users who have RSVP’d Yes or Maybe to your Event, members of your Group, and users who have interacted with your Application.”], user event.
Tracking Mobile Users by Behavior and Race: Why the FTC Must Address Mobile Privacy ASAP
Here’s a brief excerpt from the “The mobiThinking guide to mobile advertising networks 2010.” Our emphasis.
Microsoft Mobile Advertising: Targeting capabilities include device, demographic (gender, age, household income), geographic and behavior.
Advertising.com/AOL: Full suite of targeting options, including device, browser, operating system, carrier, on/off-deck, geography, time-segment, content, and multiple demographic combinations.
Nokia Interactive Advertising: Demographics, location, handset type, and in the US by channels (e.g. auto, news, sports.
Quattro Wireless: a) contextual: media type, channel, publisher; b) demographic: gender, age, ethnicity, education; c) location; d) mobile: carrier, device class, manufacturer, model, features, operating system, browser; e) frequency of exposure.
Jumptap: Jumptap offers 64 different targeting options including: demographic, geographic location, carrier, on/off-deck (operator portal), device types and browser, time of day, day of week, content category and frequency controls. These targeting parameters are derived from multiple data courses, including contextual information and true carrier subscriber information. Premium brand advertising guarantees the ad will appear on certain sections of chosen site at the time specified.
Millennial Media: Audience targeting: Millennial can uniquely identify a user across all sites on the network – they are grouped into audiences, based on their observed behaviors on sites, participation and review of click-stream data, so campaigns can be targeted at specific audiences. (Millennial discloses these techniques, with an opt-out in accordance with the Self-Regulatory Principles for Online Behavioral Advertising, July 2009). Advertisers can also do Run of Network (RON) campaigns or target by channel, custom subnet, takeover, network blocks or demographic. There is also targeting via geography, carrier, handset model/manufacturer/operating system, handset features, age of device, time of day, location, Wi-Fi, etc.
Facebook and Privacy: Why the FTC and EU Have to Become Our Real “Privacy Wizards”
Facebook is a very valuable tool. But its effort to harness more of its member data–and cloak it as a “privacy” approach–illustrates how out of touch Facebook is with the fundamental concept of personal privacy. That’s why the FTC and EU Privacy commissioners have to step in and act as Facebook’s true “privacy wizard.“ Left on its own, with its business interests driving Facebook to make our information available to them and their business partners, the privacy of 100 million US users (and even more globally) are at risk. Facebook cavalier approach that your “name, gender, current city, networks, Friend List and Pages” is considered by them “publicly available information” illustrates this. Facebook has framed these changes as beneficial to users, claiming that its “new, simplified privacy settings giver you more control over the information you share.”  Classic PR doublespeak with a Silicon Valley accent.
We have raised concerns about Facebook in the past–especially with Beacon and also with the third party apps (my CDD played a leading role providing information on the data collected by third party applications to the leading Canadian privacy group).  I asked Facebook officials to brief me and other privacy groups on the recent changes: that briefing was on Wednesday. I wanted Facebook to explain how its new privacy approach allowed its users to control data mined by Facebook and its third party developers used for interactive advertising and marketing. I was so appalled by what Facebook officials said at that meeting that, after some additional research into Facebook’s plans, my Center for Digital Democracy decided to join with EPIC and others in a complaint to the Federal Trade Commission.
I was flabbergasted to hear Facebook officials claim that its new changes actually reflected “Fair Information Principles” for privacy. That in their view the concept of privacy has “evolved,” with users wanting to share all their information via what they call the “social graf.” Facebook officials said that only a few people (implying privacy advocates) wanted to have control over their information. That they didn’t consider allowing users to control the data collected on them for marketing and advertising purposes as part of a privacy regime. Data used for advertising–even to Minors–is considered outside of what a person should be able to control, in Facebook’s view.  They also suggested that those who didn’t appreciate what they called its privacy “permission” model were out of step.
Nothing was said by Facebook officials about the company’s real motivations for expanding its access to its user data (as if business reasons had nothing to do with Facebook’s approach to member privacy!). As InsideFacebook recently explained, “Last week, Facebook launched a major initiative geared towards getting users to share more information more openly…However, while many people don’t want to share much information publicly online today, some do. For those people, Facebook’s historical default privacy settings did not make it the right product for them. As a result, Facebook recognized that its default-private model made it vulnerable to other services with default-public models, like Twitter…Facebook’s decision to make the recommended privacy options for profile data like “Family and Relationships†and “Posts I Create†be set to “Everyone†– as well as its move to remove privacy controls for Gender, Current City, and Friends – were pretty aggressive by almost anyone’s standards. In particular, its decision to present users with a binary choice between “Everyone†and “Old Settings†for some privacy preferences was especially confusingly executed…Facebook isn’t satisfied with a mostly-private platform: it wants to be the single place where both sensitive personal information is shared and public memes spread…Facebook has shown, as recently as a few months ago with its launch of the “real-time†stream as the default News Feed, followed by its decision a few months later to go back to the algorithmic News Feed, that it is capable of making suboptimal product decisions due to intense feelings about services like Twitter…”
Relevant too are Facebook’s plans to enable its third party developers to gain access to more of its member data, including their email addresses. As Facebook explains on its “Roadmap” for developers, “We’re excited to announce that you will soon have the ability to ask users for their primary Facebook email addresses, providing you with a direct channel to communicate with your users.” At our briefing, Facebook officials said they were soon addressing third party apps and their access to data. But given Facebook’s failure to protect basic user privacy, we have serious doubts it will deal with data access by its developers.
CDD will be working to educate the FTC, EU privacy officials and others. Facebook is consciously devaluing the notion of privacy for its own interests. How Facebook deals with user data–including what is used for advertising–will be on the policy agenda. The complaint from EPIC, Consumer Federation of America, Privacy Rights Clearinghouse, CDD and others opens the door for a serious examination of Facebook’s data collection practices.
CNN uses Neuromarketing to Help Advertisers on its news site
The lead ad in the Dec. 14, 2009 print edition of Brandweek is from CNN.com touting its “more effective ad units.” The trade ad from the “#1 news homepage” says that it tested its ad products using “objective biometric and eye tracking researching.”  CNN engaged the services of neuromarketer Innerscope Research and its co-founder, Harvard professor Dr. Carl Marci. Innerscope just became the first “neuroscience- based biometric company validated by the Advertising Research Foundation’s [ARF] review process.” According to ARF, Innerscope:
 “Addresses all levels of impact and response to media with its capabilities;
• Combines well-developed, biological-psychological concepts and theories with both scientiï¬cally-validated tools and creative approaches to research problems;
• Delivers “superb†scientiï¬c and analytic expertise, with a scientiï¬c approach that supports a consistent, thorough validation program;
• Provides results that are reliable and valid, helping clients to make proper advertising and marketing decisions; and
• Possesses tools and methods that can be used for any communication element, including hard-to-measure areas such as product placement, ads in video games and social media.”Â
Among the proven benefits to advertisers of its interactive ad units (based on this research) says CNN.com in its Brandweek ad are:
“17% increase in thought and processing; 21% higher emotional engagement; 22% better recognition; 31%Â faster recognition; 50% increase in thought and processing; 56% higher emotional engagement.”
Online Financial Marketing, Subprime Loans, Digital Banking & Neuromarketing–Why We Need the Consumer Protection Financial Agency
How we handle our money–including credit, loans and banking–is moving online. Digital marketing of mortgages, credit cards, student loans and other financial products will become the dominant way we relate to banking and related services. The CEO of Capital One has already said that ” [A] mobile phone is just a credit card with an antenna.” So called M-commerce (mobile commerce) will be a crucial avenue where we actually apply for credit on “the fly,” so to speak, with our cell phones themselves used to buy products.  Banks and other financial companies are using Facebook, other social media, online video, Twitter, search engines and interactive online marketing techniques to sell their services to consumers. They are also using digital media in PR campaigns designed to make consumers forget about their unethical behaviors which led to the current fiscal crisis.
Financial services companies are even using so-called neuromarketing–testing messages via fMRIs, for example–to help hone their marketing messages. Neurofocus, a Nielsen backed company that helps create digital and other ads based on brainwave research, released a study earlier this year that “dived deep into test subjects subconscious minds to discover their hidden, unspoken beliefs and feelings about financial institution brands.†They “tested consumers in its laboratory to determine exactly what financial brand messages they responded to best, at the deep subconscious level of their minds, where brand perceptions, brand loyalty, and purchase intent are truly formed.â€Â Financial marketers are also using behavioral targeting online, which stealthily collects data on us for tracking and target marketing. That’s why we keep seeing ads for credit cards and other money-related products. The information gathered as we fill in forms on the Internet can be sold as part of the online lead generation business. Online lead generation played a role in the subprime debacle, as consumers provided marketers with personal information that helped trigger pitches for mortgages and other credit.
Alternet has just published my article on these issues. It can be found here.