Google’s Eric Schmidt on Mobile Marketing [Annals of Why We Need Mobile Privacy and Consumer Protection Safeguards]

Google CEO Eric Schmidt gave the keynote address at the Interactive Advertising Bureau’s “Ecosystem 2.0” conference.  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 go….”

NTIA’s Strickling on Privacy: He Forgets Consumers!

Here’s an excerpt via Politico from their interview with Department of Commerce NTIA Chief–and potential privacy policy maven–Lawrence Strickling.  Note the absence of consumers in his description of the problem and issues.  The Commerce Department, which is jockeying to have a greater role in the privacy debate (which the largest data collectors like because they are afraid of the consumer watchdog-minded FTC), better start making consumer needs come first–if they are to have any credibility here in the U.S. and with the EU.   It appears from the interview the Commerce Department has largely made up its mind to rely on “voluntary enforceable codes of conduct.”   Here’s what Larry said in a Q & A:

NTIA is also getting into the privacy discussions.

It’s part of the larger Internet Policy Task Force that’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 we’re also looking at the protection of intellectual property, cybersecurity, and we’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 we’ll take the green paper and turn it into a more final pronouncement of the Department of Commerce or perhaps even the administration’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 we’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 that’s an appropriate idea. We think it’s a necessary idea in terms of working with industry and we’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 they’ve done in privacy. The European Union is looking at this issue. OECD is looking at the issue. So we’re very cognizant of the need to make sure our policy, whatever it is, is designed in a way to best harmonize with what’s happening in the rest of the world, and in particularly Europe.

Statement of Jeff Chester on the Department of Commerce’s Internet Policy Task Force Privacy and E-Commerce: a Bill of Behavioral Targeting “Rights” for Online Marketers?

The Obama Administration asks some important questions about protecting the privacy of U.S. consumers.  But given the growth of online data collection that threatens our privacy, including when consumers are engaged in financial, health, and other personal transactions (including involving their families), this new report offers us a digital déjà vu.   The time for questions has long passed.

Instead of real laws protecting consumers, we are offered a vague “multi-stakeholder” process to help develop “enforceable codes of conduct.”  If the Commerce Department really placed the interests of consumers first, it would have been able to better articulate in the report how the current system threatens privacy.    They should have been able to clearly say what practices are right and wrong—such as the extensive system of online behavioral tracking that stealthily shadows consumers—whether on their personal computer or a mobile phone.   The paper should have firmly articulated what the safeguards should be for financial, health and other sensitive data.  The report should have rejected outright any role for self-regulation, given its failures in the online data collection marketplace.  While the report supports a FIPPS framework, these principles can be written in a way that ultimately endorses existing business practices for online data collection and targeting.

This illustrates one of the basic problems with the Administration’s approach to protecting consumer privacy online.  The Commerce Department is focused on promoting the interests of industry and business—not consumers.  It cannot play the role of an independent, honest broker; consequently it should not be empowered to create a new Privacy Policy Office.   Having the Commerce Department play a role in protecting privacy will enable the data collection foxes to run the consumer privacy henhouse.  We call on the Administration and Congress to address this issue.  A new Privacy Policy Office should be independent and operate under the Administrative Procedures Act—ensuring there are safeguards for meaningful public participation and transparency.

The Commerce paper’s real goal is to help U.S. Internet data collection companies operate in the EU, Asia/Pacific and other markets as “privacy-free” zones.  Under the cover of promoting “innovation” and trade, I fear the U.S. will craft a crazy-quilt code of conduct regimes that they will claim should pass muster in the EU (which has a more comprehensive framework to protect privacy).  The Obama Administration appears to be promoting a kind of “separate, but equal” framework, where it will argue that no matter how weak U.S. privacy rules are, other countries should accept them as the equivalent of a stronger approach.  The new paper should have acknowledged the U.S. has to play catch-up with the EU when it comes to protecting consumer privacy.

We have been promised meetings with the new White House subcommittee on privacy, where consumer and privacy groups will raise these and other concerns.

The new “Digital Advertising Alliance” self-reg plan. See if it tells consumers what its sponsor ad groups really say to each other. That they track and target your “digital footprint”

On Monday, the new self-regulation magical “icon” that is designed to make the online ad industry’s privacy problems disappear will be unveiled.  A new group called the “Digital Advertising Alliance” will unveil the icon-based plan–all timed to help head-off the kinds of protections and safeguards consumers require.  The current financial crisis affecting tens of millions of Americans require that government and big business groups do more than pay digital lip service to consumer protection.

As a kind of litmus test for the new self-regulation effort, see if the icon and the information connected to it really informs you about how data on you is collected and used for profiling, tracking and targeting. For example, last week, the Interactive Advertising Association (IAB), one of the key backers of the new Alliance, released a guide to targeting consumers at the local level.  Here’s excerpts of what they say.  See if that little icon is being honest when you click it.  Of course, we really require rules that eliminate the kind and amount of data that can be collected on you and you family and friends in the first place–as well as honest disclosure on the process.  Note as well that all that data on you is expensive–and others are cashing in on information that belongs to you!  From the new “Targeting Local Markets” guide:

Explicit profile data Targeting. definition–
Explicit data is “registration quality data” collected either online or offline. For online registration data, the user has certain attributes in his or her registration profile at a particular site or service, and that data is associated with the user’s Web cookie or some sort of audience database when the user next logs in. Offline registration data includes the sorts of data held in the massive offline direct response industry databases built up over the last several decades. These are then matched to a user online when that user logs in somewhere that is a partner of the data company. The site at which the user logs in, usually an online mail or similar site, sends the name/email combination to the data company, which then makes the match and sends back data…pricing–In general, first party data commands a far more variable premium than third party data…Third party data is usually available in much larger quantities, and yet there is often a fee of anywhere between $0.50 to $2.00 or more paid to the data provider by the ad seller – thus increasing the cost of goods sold (COGS) on the ad, and therefore increasing the price…

Behavioral Targeting (Implicit profile data Targeting)-definition-
Behavioral Targeting is the ability to serve online advertising based on profiles that are inferred from an individual user’s technical footprint and viewing behavior…As the medium has grown from a “browsing” experience to interactional so have the levels of information gathered. Newer forms of information include the data collected about influences, social preferences through social networks and an individual user’s content created online…The data is often gathered in real-time and can be used for real-time decision-making so that relevant advertising can be delivered dynamically to an individual user during their online session…Behaviorally targeted advertising commands a higher price because of targeted placement versus general run-of-site (ROS) advertising…Behavioral Targeting can be highly accurate when the user is leaving a digital footprint of their activities as they move through the Web.

Online Marketers, Privacy & Self-Regulation: “Repeatedly Failed Promises Syndrome”

To help undermine the impact of the forthcoming FTC proposal to protect consumer privacy, a coalition of online ad lobby groups will unveil yet another self-regulation plan.  According to Mediapost, online consumers will soon see “[I]cons to signify behavioral advertising — or serving ads based on people’s Web activity.”  Since 1999, online ad groups have rolled out self-regulatory regimes promising to protect consumers online.  Each has failed to do so.   This new effort involves the very same groups and companies that offered self-regulatory promises in the past.   For example, see the World Privacy Forum’s report on the failure of the Network Advertising Initiative’s self-reg schemes; that group is part of the new effort, btw.

This new effort is seriously flawed–and before marketers and advertisers adopt it, it must be independently evaluated by consumer groups, independent academics, and the FTC.  We believe that the system will fail to protect consumers–because it will not candidly inform them about how the data is collected and used.  Meanwhile, in a revealing flip-flip, the IAB’s UK counterpart deep-sixed its just released safeguard on retargeting.  According to a new report, “[O]nline advertising trade body the Interactive Advertising Bureau (IAB) has withdrawn a code of practice which recommended that behavioural advertising retargeting cookies should expire after 48 hours. The IAB’s Affiliate Marketing Council (AMC) published the code last week. It applied to the practice of ‘retargeting’ web users who had visited a site with ads for that site on other people’s websites, using cookies to track their movements and activities…That code has been withdrawn and will be reworked after further industry consultation, though, the IAB said. The code has disappeared from the IAB’s website.”

Consumers and citizens require real safeguards governed by law and regulation–not flimsy digital promises designed to sanction ever-expanding data collection practices.

Google & Microsoft Tout their Mobile Targeting Clout, inc. Behavioral, Location, Gender, etc.

My CDD and USPIRG asked the FTC in January 2009 to investigate mobile marketing and its threat to both privacy and consumer protection issues (Ringleader Digital, now the subject of lawsuits and stories in the WSJ and NYT, was included in the complaint, btw).  Online mobile marketers, including Microsoft and Google, illustrate how regulators in the U.S. and abroad should require safeguards to protect the public from unfair and deceptive practices–including those that involve their privacy.  In Ad Age, both Google and Microsoft loudly proclaim what their mobile marketing services can do for brands, ads and marketers.  Here are some choice excerpts:

Microsoft:  “Microsoft Advertising’s industry-leading mobile display and search advertising solutions engage more than 43 million on-the-go U.S. consumers each month—regardless of a user’s mobile phone or wireless carrier. Its innovative ad placements and ad formats include display, rich media, search, video and custom in-app ad units…

Advanced Targeting Options
  • Profile targeting: age, gender, household income, location, time of day
  • Behavioral targeting: more than 120 custom segments (e.g., “movie watchers” and “business travelers”)
  • Device: make and model
  • Wireless carriers: on-deck inventory
  • Keyword targeting: exact or broad match…Complete mobile ad solutions for automotive, CPG, entertainment, financial services, retail, technology, telecommunications, travel and other sectors…
  • More than 43 million, or 55 percent of active mobile web users in U.S.
  • More than 80 million active mobile users globally in 32 countries.”

Google: “Today’s consumers are on the move. More than ever before, audiences are searching and browsing the web on their mobile devices. How do advertisers connect with the on-the-go consumer…As customers go mobile, advertisers need smart mobile advertising strategies. With Google, they can easily target and tailor messages according to location and automatically show their customers relevant local business information or phone numbers to enable them to take immediate action. Once a campaign is up and running, marketers can measure their results via detailed reports. Additionally, integrated mobile reporting in Google Analytics allows them to track and optimize conversion, e-commerce and engagement metrics on mobile devices. They can take advantage of Google’s mobile-specific ad formats. Click-to-call text ads, animated mobile banner ads, click-to-download ads and other display ad formats are examples of how Google is innovating for the small screen.  Google closed its acquisition of AdMob, one of the world’s leading mobile advertising networks, in May. AdMob’s innovative rich media ad units—including full-screen expandable, animated banner and interactive video—create opportunities for advertisers to engage with a relevant audience on their mobile devices. Now the Google and AdMob teams are working to create new ways to deliver engaging and innovative advertising experiences that will help marketers drive their businesses forward…

CASE STUDY

CHALLENGE: Esurance, a direct-to-consumer personal car insurance company, wanted to ensure that customers could do business with it on their own terms and at their own convenience… To make the connection between mobile users and Esurance agents, Esurance used Google mobile ads with integrated click-to-call functionality. The CTC ads gave mobile users the option of clicking through to Esurance’s mobile-optimized landing page or initiating a phone call with a licensed insurance agent…Results…

  • Boosted conversion rates: Click-to-call mobile ads drove a 30 percent to 35 percent higher response.”

PS:  Attention Music Lovers.  In the same Ad Age piece, the online music service Pandora exclaims that it can provide:“Through powerful hypertargeting, reach the right person, at the right time, without waste. Target based on age, day, gender, location, mobile platform, time and type of music…Pandora offers a broad array of formats and rich media functions to create an immersive mobile experience, including:

  • Tap to video
  • Drag and drop
  • Tap to app
  • Tap to call
  • Tap to e-mail
  • Tap to expand
  • Tap to find a location
  • Tap to iTunes
  • Tap to mobile webpage
  • Standard banners”

Google, Time Warner, Washington Post, Verizon, Canoe Ventures [Comcast] Funding Online Ad Lobby’s Campaign Against Consumer Privacy Safeguards

The Interactive Advertising Bureau (IAB) is a lobbying group that is working to oppose federal (or state) legislation and regulation that would protect consumer privacy online.  It recently led the lobbying campaign that removed from the new financial reform bill a key provision that would have enabled the FTC to better protect consumers.  What companies are helping fund the IAB’s Orwellian named “Consumer Protection and Education Campaign” battling consumer and privacy groups?  Here’s a list of the financial donors, who have ponied up about $500k so far.  Other companies are contributing free online ad space for the IAB’s campaign–1 billion impressions worth. The donors are:
AdMob
AudienceScience
Canoe Ventures
Cars.com
CPX Interactive
eBureau
Eyeblaster
Feeva Technology
Google
IDG.net
IM Services Group
Mediamath
Meredith Interactive
Microsoft
Quantcast
Sharethis
ShortTail
Simulmedia
Time Warner
Traffic Marketplace
Tumri
Verizon
Washington Post
WildTangent

Google’s new `simplifed’ Privacy Policy: More disclosure and honesty required [updated]

Last week Google announced it was “simplifying and updating” its privacy policies.  As it so often does, the announcement was framed as a `we did for your good’ kind of effort.  “[W]e want to make our policies more transparent and understandable,” it explained, noting that “most privacy policies are still too hard to understand.” But as so often with Google and other online marketers, you have to both read between the digital lines and also analyze what’s really going on.

Google’s revised policy, which takes effect October 3, fails to really explain to consumers/users what’s actually going on.  Like other privacy policies, Google claims that all its data collection is to “provide you with a better experience and to improve the quality of our services.”  But what they really mean–and what the Congress, the FTC and other regulators must require them to disclose–is that they have crafted a wide-ranging system designed to foster personalized data collection and online targeting.  Missing from the revised Privacy Policy (which Google, btw, is pitching to privacy advocates and no doubt others as a  paragon of digital virtue) is any candid disclosure on how its Doubleclick, Admob, Google Display Network, Ad Exchange, Teracent, and other services collect information from and about us.

Google isn’t alone–Facebook, Microsoft, Yahoo and everyone else rely on a purposefully deceptive privacy policy to engage in data collection activities that require disclosure and individual user control.  Google is also reshaping its privacy policy to better capture all the data it can collect across multiple platforms and applications. Here, just for the record, is what Google advertised in Ad Age’s recent Ad Exchange and online advertising guide [excerpt]:  No matter how you define performance, the Google Display Network offers a solution. By bringing more measurability and precision to your advertising, it enables you to create, target and optimize ads based on real-time data, meaning better returns for you.

The Google Display Network helps advertisers and agencies achieve performance at scale by delivering relevant, accountable ads to their target audiences—in more places, more often…Precisely target your audience: The Google Display Network’s technology enables you to find customers based on their interests, sites they visit and when they’re engaging with relevant content via contextual targeting, or show specific messages to users who’ve already visited your site with remarketing…The Google Display Network provides opportunities to advertise in all such environments—feeds, games, mobile, social networks and video streams— enabling you to create an immersive experience for your audience.

PS.  Well, Google just also announced what its interactive display ad system can do for marketers.  How come this isn’t in the privacy policy in understandable language and full consumer control? Excerpt:  Advertising with Google used to be all about four lines of text, on Google.com and on our partner sites. No longer. Did you know that, outside of ads alongside search results, more than 40 percent of the ads that we show are now non-text ads? And that doesn’t include the 45 billion ads that our DoubleClick advertising products serve every day across the web.

We get excited by display advertising for a number of reasons…Teracent’s technology can automatically tailor and select the creative elements in an ad, and adjust them based on location, language, weather and even the past performance of ads, to show the optimal ad.  We’re focused on helping advertisers get the best results from their campaigns—by enabling creative branding campaigns, precise targeting, wide reach and effective measurement. Over recent years, we’ve added a ton of new features to YouTube and the Google Display Network, to help advertisers get—and measure—the results they’re after. From remarketing to Campaign Insights to video targeting on YouTube, we’re building tools that are helping advertisers get great results and enabling them to run some of the most amazing ad campaigns the world has ever seen.

Microsoft Fuels Youth Obesity Epidemic via Xbox tie-ins: Digital Product Placement and Beyond

Microsoft is one of the most aggressive online marketing companies targeting teens online.  Across the globe, Microsoft Advertising touts its ability to deliver interactive food and beverage ads on PCs, mobile phones, gaming devices and via IM, Bing, etc.  Teens and young adults are the key target–but so are young children.  In its desperation to catch up with online ad leader Google, Microsoft has strained to be the “yes we will” digital agency.  For several years, Microsoft has had a close tie with Pepsi’s Doritos and Mountain Dew, offering various special games that feature the chip.  Now Microsoft is continuing that alliance, as the new Halo:Reach edition comes to market.  As explained by Variety, “helping build Microsoft’s brand is Madison Avenue, which has fully embraced the franchise’s main character, Master Chief, and turned him into a pitch soldier, with PepsiCo plastering him on 300 million Mountain Dew cans and 30 million bags of Doritos for the launch of the latest game.”

Microsoft officials–and those who play a influential role in the company–should not endorse digital marketing schemes that target youth–and especially contribute to such major public health problems as youth obesity.  For shame, Microsoft.

Google’s non-neutral YouTube–Gives Advertisers “Brand Protection” to bypass online videos

Google, like other major advertising and media companies, works hard to please its biggest advertisers.  For decades, radio and TV networks relied on Standards and Practices divisions to screen programs to make sure they were suitable “environment” for commercials.  So-called “brand protection” has mushroomed online–as we predicted it would many years ago.  The business model for TV and the Internet are aligned–it must please the Fortune 1000 advertiser first.  So it’s no surprise that Google has launched a “brand protection feature” for YouTube, explains Ad Age, that provides “more control for advertisers to exclude objectionable videos, genres, channels.”  Ad Age explained that YouTube’s new feature, is called “target excludes.” It’s “part of the site’s Video Targeting Tool, which gives advertisers the choice to exclude as few as one video they don’t want their product associated with as well as specific genres and channels. The feature addresses the most often-criticized aspect of YouTube: You can buy video there, but you never know what you’ll get.Other uses for this new feature by advertisers include improving returns by excluding channels or videos that are not relevant to the brand or those that are performing poorly.”

Here’s how Google explains it: “We’re constantly working to give advertisers control and flexibility over their YouTube campaigns. We place great value on this because ads are an extension of what a company represents as a business, and we want YouTube to be a place where that reputation and image can flourish. To that end, we’ve been rolling out features to keep advertisers in control of their campaigns…Google has also been investing significantly in ensuring brand safety, transparency and control for advertisers across the Google Display Network. We’re hoping that these added layers of control will make your campaign targeting even more precise.”

As we said, so-called online brand protection is a booming business.  But its purpose, explains one online advertiser, is to be “a preemptive technology and is designed to block ads from appearing next to controversial content…protecting brands from potentially damaging negative associations resulting out of negative content adjacencies.”  But questions should be raised now about how decisions will be made placing videos and other content on so-called censoring “whitelists” [which are really blacklists]. How will it ultimately affect the diversity of controversial content online?  Does YouTube further go from a quasi common carrier to an environment where, as we already see, Google favors some content over others?   Will the online medium be further transformed to reflect the TV model, with consequences to serious journalism and independent content?  The questions are larger than what Google does.  But given Google’s network neutrality flipflop and its online ad and data collection ambitions, a debate about the impact of so-called “brand protection” on the future of the online media is in order.