Month: February 2007

Online Alcohol Promotion in Web 2.0: A-B+Blue Lithium

Stuart Elloitt of the New York Times reports today that “Anheuser-Busch is teaming up with Blue Lithium, an online marketing company in San Jose, Calif., to introduce a promotional program called Clink as part of its “Here’s to beer” campaign. The program, to be housed on MingleNow, a social-networkingWeb site, will let members upload and share photographs as well as video clips. Anheuser-Busch also plans to add a video-sharing feature to Bud.tv…”

But those concerned about inappropriate marketing of beer and alcohol products to underage youth—as well as online privacy—should know more about the deal between A-B and Blue Lithium. It illustrates how marketing is dramatically changing as a result of digital technologies. Data collection, one-to-one targeting via new broadband platforms, and better ways to meld the consumer’s psyche with the brand (such as encouraging user-generated content to promote “engagement”) are just a handful of the new techniques.

Blue Lithium is more than just an “online marketing company” described by the Times. It provides advertisers a broad range of digital tools to deliver precision advertising and marketing, via its “ad network” of online content providers (called publishers). Blue Lithium touts the power of its technology to drive change in consumers, something called “conversions.” Advertisers using Blue Lithium can count on it “identifying the right people, based on tracking user actions and interests, then bundles those individuals up into a highly-receptive audience for your messages.” [Many other companies engage in such behavioral techniques via ad networks].

As consumers are attracted to Blue Lithium connected websites to view consumer generated video content, they will be targeted with a variety of multimedia ads. AdRoll, explains Blue Lithium, permits advertisers to “[L]ayer with advanced targeting capabilities to refine the focus of your video campaigns, reaching those consumers with certain demographic profiles…” AdRoll’s network of publishers permits advertisers to engage in “behavioral retargeting,” which means that consumers will see a refined video pitch from the same advertisers as they travel to entirely different websites. Blue Lithium notes that such retargeting “has been show to improve click-through and conversion rates by [more than] 300%.

The A-B and Blue Lithium deal involve the latter’s “MingleNow,” called an “online/offline social network.” MingleNow, launched in December, “is dedicated to connecting users to their favorite clubs and bars and the people who go there.” It’s worth checking out the various functions of MingleNow’s approach to social networking and marketing. According to its press release (Google cached for now): “MingleNow is built along three fundamental dimensions: Profiles, Places and Events. Once users indicate which bars and clubs, they frequent, their photos show up on the Place page of that establishment and they become part of the community that goes there to share photos and video, trade comments, plan events and in person meetings. MingleNow has over 900,000 place pages representing the most popular drinking, clubbing and socializing establishments in the U.S. Event pages enable users to see what’s going on in their area or publicize their own event. Profile pages give users a place to share information about themselves, feature their favorite people and places, make plans, upload video and more. In order to create an open social network, MingleNow allows users to import feeds and data from other social networks, and export feeds from MingleNow to other networks.”

In another example of techniques to engage users, MingleNow lets you “earn VIP points” as you bring others in to join it. Such rewards can be used for free drinks. We don’t know whether MingleNow is using behaviorally targeting nor the extent of its deal with A-B. But we think both companies need to be candid about what is going on.

FCC–and NTIA–Revolving Door Watch: Hundt and Obuchowski Lobby Wireless Plan

Former Clinton-era FCC chair Reed Hundt and former G.H.W. Bush and G.W. Bush communications policy official Janice Obuchowski have joined forces to have the FCC grant their company–Frontline Wireless–a significant swath of spectrum. They have submitted a proposal to the FCC which urges a “market-based approach” for the development of a broadband public safety network. Without commenting on its merits, it will be important to place a spotlight on the lobbying done involving these two well-connected former officials.

We have long been concerned about the revolving door between the FCC and the media/telecom industry. With high-ranking Democratic and Republican former officials helping push this proposal, it is likely to receive some form of preferential treatment. Precisely because a former FCC commissioner is involved, Frontline’s proposal deserves closer scrutiny.

Death of Broadband Privacy in Venice? What’s the Deal with Joost & Viacom?

Reporters are hyping the new deal between Joost and Viacom. Missing from the discussion is the impact of the new video service on privacy and commercialism. According to Advertising Age (my bold):

“So far, Joost’s ad model includes five- to seven-second ads that pop up when certain videos are initiated and mid-roll video ads in videos more than five minutes long, the number of which are scaled pro rata to the length of the content. Wrigley, T-Mobile, Maybelline and Phillips are among the beta advertisers. The idea is to have a single advertiser sponsor a piece of content, but to give it multiple elements, Mr. Clark said.

Like other web ads, they’re interactive and let users click through for more info, e-mail offers and long-form messages. The service also touts what will be powerful targeting and reporting capabilities. Echoing Joost’s founders, Mr. Clark said, “We’re combining the best of the web with the best of TV.”

We hope Joost will clearly spell out what data is being collected and reported to Viacom and others. We don’t believe its privacy policy addresses what it will be providing, for example, its new partner Viacom. But services such as Joost should embrace privacy policies which fully disclose precisely the information provided to advertisers. Opt-in should also be the standard, once users are formally and proactively informed.

Joost update. Here’s how Joost plans to help marketers conduct precision targeting, according to Octagon Music blog: “For every user that downloads the Joost application, part of the registration process is to complete a user profile with typical demographic information. It’s this user profile that will be an advertiser’s dream. Imagine being able to target viewers by location, time of day, viewing habits, and other profile information to serve up the perfect ad… Friis and Zennstram believe this unlocked targeting power will command a premium in terms of dollars from advertisers, which will hopefully keep Joost up and running.”

Media industry watcher Jack Myers reports that “advertisers will be able to cherry pick users by location, time/date of viewing, viewing history and preferences, and even profiles of Joost members who opt-in. In the future both advertisers (and programmers) will have the flexibility to upload content themselves…”
Source: Why Joost Isn’t Just Your Average `YouTube Killer’. Abbey Klaassen. Advertising Age. Feb. 26, 2007 [sub. required]

Today’s scoop by Stephen Labaton in the New York Times that the FCC will impose a fine on Univision for its failure to adhere to the Children’s Television Act rules has another important dimension. Last year, Univision–the leading Spanish language broadcaster–was sold off to the highest bidder. Hispanics/Latinos are seen not as citizens/community members–but as an incredibly lucrative brand-buying market. Instead of regulators ensuring that these channels and the network would serve the larger public interest–including more diverse and independent programming–a sale was blessed to a group of deep-pocketed investors. A combination of well-connected companies paid $13.7 billion for Univision. Among the buyers included former FCC Chairman Michael K. Powell’s Providence Equity Partners and Hillary Clinton donor Haim Saban (that’s the same Saban who made all his moolah selling his violent “Mighty Morphine Power Rangers” and “Teenage Mutant Ninja Turtles” (in deals with Rupert Murdoch and Disney). On Thursday, Mr. Saban held a fund-raiser for Sen. Hillary Clinton. As we’ve noted before, Michael Powell is a senior advisor to Providence Equity Partners.

A press report notes that Univision’s settlement on the kidvid complaint is “part of a settlement that will allow the company to proceed with a buyout deal…” In other words, paying out $24 million is chickenfeed for allowing a big deal to go through. But this episode illustrates how big media companies don’t really care about the public interest; that the revolving door between the FCC and private industry contributes to a “let’s make a deal, anything can go” media industry culture; and that the well-connected treat media outlets as just cash cows. It’s time for a serious challenge to the FCC and media industry policy status quo. It’s also time for advocates to press Congress to investigate the role of private equity in media mergers and buy-outs. Such an investigation is timely, as Michael K. Powell’s firm has just announced it has amassed the largest private media fund ever–$12 billion.

Source: “Record Fine Expected for Univision.” Stephen Labaton. New York Times. Feb. 24, 2007.

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Thank You, Fox’s Levinsohn. Did You Hear What He Said, FTC?

It always helps to have interactive ad industry leaders make the case for the public interest. So we are gratful to Fox Interactive’s Peter Levinsohn (MySpace, IGN) for telling the New York Times that [my bold] “We have more information about our users, I believe, than any other site on the Web today.” Levinsohn’s comment was to explain the importance of its new interactive advertising technology acquisition, Strategic Data Corporation (SDC). Here’s what Online Media Daily said about the deal:
“Fox Interactive is already taking steps to mine the wealth of personal information found on profile pages on MySpace and other sites to better target ads. “With SDC, we’ll be able to plug all that rich data into their ad optimization technology and be able to fine-tune our ad delivery on a much more targeted basis,” explained Burkart. She said Fox is already working with brand marketers to figure out what kinds of user data are most valuable to them.”

SDC’s technology helps deliver precision targeted marketing. As the new Fox acquisition explained on its site, SDC “automatically optimizes the selection of creative for each impression to maximize profitability by combining sophisticated statistical and predictive algorithms, demographic and geographic segmentation, and performance tracking. Our clients typically see network-wide (not just individual campaign) revenue increases of 50-150%. We are so confident of these results that we charge based on the actual increase in profit you measure… Using standard Intel-based servers, the software sustains real-time optimization of over 15-30 million impressions per server per day with a 1-2 millisecond response time.”

Source: “Fox Interactive Acquires Technology Ad Company.” Louise Story. New York Times. Feb. 23, 2007

“Fox Interactive Buys Strategic Data Corp., Plans Ad Targeting Upgrade.” Mark Walsh. Online Media Daily. Feb. 23, 2007

Rupert

We couldn’t resist this: “Fox Interactive Media (FIM)… announced today that it has completed the acquisition of interactive advertising technology company, Strategic Data Corporation (SDC)…SDC’s technology will enable FIM to deliver highly-targeted graphical performance-based advertising on literally billions of Web pages viewed each day across its growing network. Fox Interactive Media, which spans MySpace, IGN, Direct2Drive, AmericanIdol.com, AskMen.com and more, is among the most visited networks on the Internet with more than 135 million worldwide unique visitors each month and is the number one most viewed network in the U.S. with over 40 billion pages viewed each month…“We couldn’t be more pleased to join the Fox Interactive Media family,” said Richard Janssen, SDC CEO. “FIM is truly innovating how brands reach consumers in a socially networked world and we look forward to bringing our technologies and team to the effort.”

Paidcontent.org reports that SDC’s technologies provide “sophisticated statistical and predictive algorithms, demographic and geographic segmentation, and performance tracking…”

Source:
FOX INTERACTIVE MEDIA ACQUIRES INTERACTIVE ADVERTISING TECHNOLOGY COMPANY STRATEGIC DATA CORPORATION

Enhanced Media Network to Bring Hyper-targeted Ad Serving to Reality

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IAB: Worried that the Feds Will Do the Right Thing

Here’s a brief update on IAB. They are, notes ClickZ’s Kate Kaye, “…in the process of creating a Public Policy Council, to be comprised of Chief Public Policy Officers, General Counsels and IAB members. Tacoda Chairman Dave Morgan is heading up that operation, according to the IAB. Legislation and regulatory issues will have an enormous impact” on the interactive ad industry, said Rothenberg, noting, “We should be concerned, but we shouldn’t be crazy scared.”

Given that IAB’s new president Randall Rotherberg used to be a journalist (covering advertising for the New York Times and Ad Age), one would hope that he would be in the forefront of having his industry face up to facts. The basic business model is a threat to privacy and more. It’s gone beyond the time for “public policy councils” run by the industry’s spinmeisters. What’s needed is an honest admission of the problem, and support for a federal policy where consumers opt-in to all the techniques (after they are fully informed). That’s right. You need to get permission from individuals before you engage in behavioral targeting, retargeting, immersive rich media, etc. We imagine most people will consent. But it should be up to each person-not Ad Networks, IAB members, etc.

PS: Mr. Rothenberg: Don’t hide behind the press! We see that the IAB president quoted saying “The Interactive media industry is committed to striking the right balance between consumer protection and a consumer’s free online access to information and entertainment.” That’s not the real issue. No one is saying there shouldn’t be interactive advertising–or even the kind of personalized interactive practices the industry has embraced (with some notable exceptions). We understand the role which advertising plays to support the media. What we are saying is there have to be safeguards. In fact, ironically, I believe interactive ad practices done in the current stealth manner will help to undermine public confidence in the news media. The growing debate over online advertising is primarily about giving the public real information and control.

New Threats to Privacy: Interactive Ad Bureau (IAB) Hires D.C. Lobbyist

The interactive ad lobby–that includes most publishers of major newspapers, magazines and online outlets–is worried that consumer advocates might persuade Congress or the FTC to actually do something to protect digital privacy. Groups such as the Interactive Advertising Bureau (IAB) are alarmed that if consumers can actually control their data, the ability of digital marketers to collect, profile, track and target us will be threatened. So the IAB–which has a old and new media who’s who on its board–has brought in some political help. According to Online Media Daily:

“AIMING TO INCREASE ITS SWAY over government, the Interactive Advertising Bureau has opened a Washington, D.C. office and hired its first in-house lobbyist, Mike Zaneis…he and lobbyists from the Venable law firm have been talking with Congressional staffers on the IAB’s behalf. “We’ve been educating them on how the Internet works, and what the interactive advertising industry actually is and how it operates,” said Zaneis, who previously served as executive director of technology and e-commerce at the U.S. Chamber of Commerce.”

Presumably, the IAB will be working alongside DC lobbyists for Google, Yahoo!, Time Warner and the like to ensure that our digital media platforms provide a direct connection to Madison Avenue’s data warehouses. But they should be ashamed for creating a business model where direct access to our data across countless online media properties needs to be defended by special interest lobbying tactics.

PS: We just saw the ClickZ story. It’s very telling what the new IAB DC lobbyist said:
“…Zaneis says his initial plan of is, “Putting together a public policy council, developing positions on key issues, and leveraging the contacts that I have on the Hill, and in the FTC and other places. And then it’s a take no prisoners attitude to advocate for our members.”

Michael Powell, William Kennard and other former FCC Chairs: Not Just former Officials. They are now Media & Telecom Dealmakers

Reporters covering the media business love to quote from former FCC chairmen (there’s never been a woman running that agency!). They are seen as expert sources with great “inside the FCC” expertise. But they have conflicts that require disclosure to readers/users, at the very least. Because of the `golden’ revolving door, former agency officials generally end up immediately working for the very media and telecommunications sector which only minutes before they oversaw (allegedly to protect the public interest).

Take, for example, today’s New York Times story quoting Michael Powell about the proposed Sirius and XM satellite radio merger. Powell said that the deal “could get through,” although acknowledged it would be difficult. But Powell should have been identified as a “senior advisor” to the media and telecom buy-out firm Providence Equity Partners. Through his work at Providence, Powell is engaged in helping make media buy-out deals happen. Incredibly, Providence’s deal-making has included an attempted buy-out of the radio conglomerate Clear Channel and Tribune—companies that were under the regulatory purview of Mr. Powell only a short while ago. Last fall, Providence acquired Univision, another company where Powell played a key role at the FCC.

The revolving door of former FCC “experts” is bipartisan. The last Clinton era FCC chair William Kennard is “Managing Director” for “U.S. Buy-out-Telecom and Media” for the Carlyle Group. Kennard is also a director of the New York Times Company.

The very same New York Times writer, who covered the satellite deal, had another story in today’s paper. Providence Equity Partners, Mr. Powell’s firm, has “raised $12 billion for what would be the largest specialized fund in the world…” Powell’s role for Providence wasn’t mentioned in that story either. The frenzy of takeovers that will likely ensure should give Mr. Powell and other former officials working for the industry many more opportunities to be used as an unbiased source.

It’s time Congress did something to address what is ultimately a very corrupt environment at the FCC. Chairs, commissioners, and senior staff should, at the least, be required to pledge they will not seek industry related work for a minimum of five years. The majority of commissioners should not come from industry (sorry K Street!). They should be independent academics, consumer advocates and community media officials. How about an FCC that actually puts real people–not public-and-private deals to be brokered–first!
Sources: “Policy Shift May Benefit Radio Deal.” Andrew Ross Sorkin. New York Times. Feb. 21, 2007
“Equity Firm Said to Raise Big New Fund,” Andrew Ross Sorkin. New York Times. Feb. 21, 2007