The 700 MHz Auction: It’s about Online Advertising, Mobile Targeting, Commercialism and Threats to Privacy

We are glad Google is pushing a more open system for wireless. Cable and the phone monopoly want to run a closed shop. But we also believe that Google ultimately has the same business model in mind for wireless. Google wants access to more mobile spectrum so it can advance online advertising via data collection, profiling and one-to-one targeting. Missing in most of the debate about wireless is how can we ensure the U.S. public has access to non-commercial and community-oriented (and privacy-respectful) applications and services. There should be well-developed plans simultaneously advanced with the auction that will ensure the spectrum really serves the public interest (we see some have made such proposals). Such spectrum should be community-run and help stimulate a new generation of broadband public interest content and network services. But we fear that all that will happen is that Google and others will further transform what should be public property into a crazy maze of interactive [pdf] advertising-based content. This will further fuel a culture where personal consumption takes further precedence over the needs of civil society.

excerpt from a Q and A on online ad exchanges:

“8. How can advertisers target their ads?
The DoubleClick Advertising Exchange service has one of the most
sophisticated and broad set of targeting options available. The exchange
supports standard online targeting elements including time of day, day of
week, user location, et cetera. In addition, buyers can target using
DoubleClick’s proprietary solutions including a three-tier content
categorization, site genre and site maturity. Buyers can target
participating sites by name or, alternately by using IDs, target sites
that are participating anonymously. The exchange also allows buyers to
leverage their own data by targeting based on their own user information.

9. What differentiates your ad exchange from other ad exchanges?

* Seamless integration: DoubleClick Advertising Exchange is tightly
integrated with DoubleClick’s existing DART ad management platform,
enabling yield maximization across sales channels for sellers, as well
as shared creatives, advertisers, Spotlight Tags and audience
targeting for buyers…

12. Can your ad exchange service be integrated with other ad management
DoubleClick Advertising Exchange is tightly integrated with DoubleClick’s
existing solutions. Integration with DoubleClick’s ad management platforms
— including DART® for Publishers and DART® Enterprise — enables it to
deliver unique benefits such as dynamic allocation, which helps publishers
automatically determine how to generate the highest return for every
impression. In addition, DoubleClick Advertising Exchange is integrated
with DART® for Advertisers, allowing for shared campaign management
elements including creative, advertisers, user-lists and spotlight
tracking tags.”

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What Google should have said about “Why we’re buying Doubleclick”

Why can’t Google admit to its real reasons for acquiring Doubleclick? It’s not truly candid recent post (by Group Product Manager Alex Kimmier) dodges the key issues. If Google can’t be more honest—and at least admit to real public policy concerns—it’s a strategic blunder (let alone an example of a corporate culture where candor isn’t truly valued). So first, this “official” Google blog should have admitted that there are real privacy concerns with the merger. When you merge the number one online ad search firm (Google) with a leading provider of cookies for display advertising (Doubleclick), in a medium where revenue generation is all based on the collection and targeted use of personal information, the deal rings five-alarm privacy alarm bells. It’s unbelievable—and frankly disquieting—that Google can’t admit this is an serious issue with its proposed $3.1 b takeover of Doubleclick.

Google is also being disingenuous when it discusses the online ad business. For example, in the post it lumps itself together with Yahoo! and MSN when discussing the 40% market share search ads have in the overall online ad market. But the official blog should admit that it’s far and above the dominant force in the search market, both in the U.S. and abroad (with a 64% market share in US search, leaving Yahoo and MSN trailing at 22% and 9% respectively.) It should acknowledge that the one part of the online ad market they don’t yet dominate is display advertising. Through it’s acquisition of Doubleclick, Google will be able to quickly expand its dominance to the rest of the market. It’s not about, as its blog suggests, creating a more “open” platform that can “improve online advertising for consumers, advertisers and publishers.” It’s about tapping into Doubleclick’s blue-blooded client list of Fortune-type companies so Google can better digest that vital part of the online ad market.

But beyond online ad consolidation, we wish to return to privacy and targeting. No matter how useful Google is helping to identify key sources of information, it’s not in the best interests of a democracy to permit a private gatekeeper of so much (continually updated) personal data. Google’s business is advertising: it will do what it must to collect information about each of us so it can personally target us wherever we are. Online advertising is a very powerful medium, utilizing technologies designed to affect our behaviors [pdf] in a variety of ways (including so-called immersive targeting). Google’s expansion—and its apparent inability to acknowledge key civil society concerns—should be part of the media reform debate.

FTC and Hill: Remember Doubleclick Acquiring Klipmart Last Year!

One of our messages to policymakers is that there has already been significant consolidation in the online targeted ad market. Once Google swallows Doubleclick, what little hope for any meaningful competition will disappear. So we think it’s useful to remind regulators about Doubleclick’s take-over—just last year–of online ad firm Klipmart. As clickz reported in June 2006:

DoubleClick has acquired video ad specialist Klipmart, and will combine the company’s technology and services with its own DART Motif rich media platform.

The deal, for which terms were not disclosed, brings DoubleClick a step closer to legitimacy as an end-to-end solution for rich media advertising, particularly since Klipmart ranks among the more sophisticated providers of video production services, an area where Motif is historically weak.

Meanwhile, Klipmart should benefit from DoubleClick’s democratic appeal to marketers, who for budgetary reasons may previously have shied away from the video vendor’s reputation for high-end deployments.

With the acquisition, DoubleClick now employs 100 in rich media. In its announcement, the company said it will soon launch an “Innovation Lab” focused on taking video to multiple digital platforms…

Klipmart is known for creating smooth user experiences for in-stream and in-page video ads, and for providing good customer service to agencies and advertisers. The company pioneered full-screen expansion of video ads, and publishes all video in multiple codecs to maximize the addressable audience.

“Klipmart has a superb reputation of creative video innovation and service,” said David Rosenblatt, CEO of DoubleClick, in a statement. “Combining these strengths with DoubleClick’s industry leadership, insight and global ad management platform will truly accelerate industry innovation in digital video and emerging advertising formats.”

Google Buys More Lobbyists and Influence

excerpt from Washington Post: “…Google went on a hiring spree and now has 12 lobbyists and lobbying-related professionals on staff here — more than double the size of the standard corporate lobbying office — and is continuing to add people. Its in-house talent includes such veteran government insiders as communications director Robert Boorstin, a speechwriter and foreign policy adviser in the Clinton White House, and Jamie Brown, a White House lobbyist under President Bush.

Google has also hired some heavyweight outside help to lobby, including the Podesta Group, led by Democrat Anthony T. Podesta, and the law firm King & Spalding, led by former Republican senators Daniel R. Coats (Ind.) and Connie Mack (Fla.). To help steer through regulatory approvals in its proposed acquisition of DoubleClick, an online advertising company, Google recently retained the law firm Brownstein Hyatt Farber Schreck.”

from: “Learning from Microsoft’s Error, Microsoft Builds a Lobbying Engine. Jeffrey H. Birnbaum. June 20, 2007

PS: And that’s before Johanna Shelton, former aide to Rep. John Dingell and FCC Commissioner Adelstein, starts working for Google on Monday!

Google Loves Our Data! Let Us Count the Ways…

As admirers go, Google is definitely of the secret variety. From its highly guarded formula for generating search results, to the shroud of mystery that surrounds its plans “to organize the world’s information and make it universally accessible and useful,” to a complex privacy policy that is spread over 20 separate pages on the Web, the search giant invariably raises more questions than it answers. “Don’t be evil,” reads the company’s motto, but apparently it’s OK to be evasive. “It’s somewhat of a paradox,” financial analyst Jordan Rohan told the Los Angeles Times last year. “Google’s whole purpose is to make information easier to access—unless, of course, you want to know information about Google.” As the Times added, “Google’s unwillingness to disclose little more than the legally required basics of how it does what it does—and where it’s headed—has left advertisers puzzled, partners confused, competitors nervous and investors frustrated.”

Make no mistake, however, this secret admirer really does care about us. Why else would Google give us so much—lightning-fast search results, interactive maps, email service (with plenty of storage space to archive our communications), online calendars, word processing programs, spreadsheet applications, and more—all free of charge?

The answer, of course, is that Google actually gets plenty in return, in the form of massive amounts of data that it compiles on consumer interests, tastes, and behavior. For all of its variations on the search engine theme—from Google News to Google Video to Google Product Search—the company remains above all else an advertising engine, one whose $500 stock price and $700 billion revenues are testaments of its success.

So how does Google love us? Let us count the ways, with a sampling of the kinds of user data to which Google currently has access:
1. The keywords and phrases we use in the searches we perform.
2. The time and date of these searches.
3. Our Internet IP address and browser configuration.
4. The websites we visit as a result of these searches.
5. The amount of time we spend on those sites before returning to Google.
6. Our patterns of navigation as we travel away from and back to Google.
7. The addresses and directions we enter in Google Maps.
8. The messages we send and receive via Gmail or Google Talk.
9. The schedules we create on Google Calendar.
10. The documents we create and edit in Google Docs.
11. The figures we enter in Google Spreadsheets.
12. The sources we subscribe to in Google Reader.
13. The accounts we create and the information we post to Google’s far-flung Web properties, including Blogger, Orkut, and YouTube.
14. The activities we carry out using a variety of Google-branded “helper” applications, including Google Desktop, Google Toolbar, Google Checkout, Google Web History, and Picasa.

“Google has been aggressive about collecting information about its users’ activities online,” observed Adam Cohen in the New York Times. “It stores their search data, possibly forever…. Its e-mail system, Gmail, scans the content of e-mail messages so relevant ads can be posted. Google’s written privacy policy reserves the right to pool what it learns about users from their searches with what it learns from their e-mail messages, though Google says it won’t do so. It also warns that users’ personal information may be processed on computers located in other countries.”

The lynchpin in Google’s vast data-dragnet is the small text file placed on the user’s hard drive, known as a “cookie,” stamped with a unique user ID and passing information back and forth between one’s PC and a particular website. “Google was the first search engine to use a cookie that expires in 2038,” explains “…This cookie places a unique ID number on your hard disk. Anytime you land on a Google page, you get a Google cookie if you don’t already have one. If you have one, they read and record your unique ID number.”

As if Google (with its billions of searches and millions of users it serves every month) doesn’t already know enough about us, its proposed $3.1 billion acquisition of DoubleClick will bring online consumer surveillance to an entirely new level. DoubleClick might not be the household name that Google is, but in its field—online advertising—it is perhaps even more dominant, reaching an estimated 80 to 85 percent of all Web surfers with some 720 billion ads a year. Its consumer analysis, profiling, and behavioral targeting technologies, carried out on a vast network of affiliated websites, are extraordinarily thorough. “Without a doubt, DoubleClick’s historical data is very valuable,” says Jupiter Research analyst Emily Riley. “Every time you’re online, every page visit, and every ad you see comes with the possibility that a cookie is placed on your machine. DoubleClick has all the data.”

And soon Google will have access to all of that data as well. DoubleClick’s DART system, for example, will provide Google with a complete set of applications—and data access—to allow it to extend its more linear search advertising business into the third-party and rich-media advertising market. Another of DoubleClick’s key technologies, called Motif, is used to track user interaction with video content. As the search and online video markets converge, the ability to identify and assess user response to interactive media environments will be central to online advertising. Google’s interest in such technology was no doubt fueled by its $1.65 billion acquisition of YouTube in 2006. Google is now in the process of “data-tagging” all of the videos on YouTube in order to make the site a much more effective platform for advertisers.

A combined Google and DoubleClick, clearly, will be a potent force in the online universe. As the New York State Consumer Protection Board recently declared, the Google/DoubleClick “merger presents significant privacy implications. The combination of DoubleClick’s Internet surfing history generated through consumers’ pattern of clicking on specific advertisements, coupled with Google’s database of consumers’ past Internet searches, will result in the creation of ‘super-profiles,’ which will make up the world’s single largest electronic repository of personally and non-personally identifiable information.”

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Google Buys DC Access: Adds Lobbyists with Connections

excerpt: “Google expanded its Washington staff to 13, including five lobbyists, and then scored a victory this week with the hiring of its sixth: Johanna Shelton, senior counsel for telecommunications and the Internet to Representative John Dingell. Dingell, a Michigan Democrat, is chairman of the House Energy and Commerce Committee, which oversees media, telephone and Internet issues….The company last week retained outside lobbyist Makan Delrahim, former deputy assistant attorney general in the Justice Department’s antitrust division, to help win approval. Former Republican Senators Dan Coats and Connie Mack, both partners in the Washington law firm King & Spaulding, began lobbying for Google last year, as did the mostly Democratic Podesta Group. Google staffers include Republican lobbyist Jamie Brown, a former Bush aide whose job included lobbying senators on the confirmations of Supreme Court Justices John G. Roberts and Samuel Alito; and Democrat Robert Boorstin, a former speechwriter for Clinton on national security issues.”

via Bloomberg news

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The Online Data Collection & Targeting Economy: Price Increases Will Affect Reach and Content Diversity

We suggest that the Google takeover of Doubleclick, Microsoft’s aQuantive deal, and related acquisitions will have important ramifications to competition and civil society. Powerful business economics will shape the online medium (mobile, PC, IPTV), potentially diminishing content diversity. We are especially concerned about the future of political campaigns, as one’s ability to access voters and inform the public will be determined–as with TV today–but one’s deep pocketbook. So we find this quote from a Wharton economics professor of interest: “Xavier Drèze, a marketing professor at Wharton, suggests that online advertising prices could increase due to better targeting. “The more targeted the ads, the more valuable they are.”

The Wharton piece goes on, citing a recent report by Susquehanna Financial Group analyst Marianne Wolk.

“Behavioral targeting makes inventory available for sale based on the value of a web site’s audience, generally outstripping the value of the content on a page,” Wolk writes. “Behavioral advertising enables marketers to reach beyond keywords and impressions to the audience segments behind them.”

The Wharton article explains that “[]If Wolk’s assessment plays out, advertisers are likely to have a variety of media to spur behavior. For instance, a television ad could elicit an emotional response from a consumer that then prompts him or her to do a search and ultimately make a purchase. The big difference in the brave new world of advertising is that all of these moves would be tracked.

Important to Understand How New Media Merger Deals Reflecting Changing Nature of Search, Ads, and Data Collection

We think this excerpt from Advertising Age [sub. required] on Microsoft’s recent summit for marketers illustrates where search engines are headed (and how it reflects the converging search, rich media, video and display ad markets):

“You’re in a Microsoft Windows’ Live search-results page after querying “Land Rover,” you mouse over an icon next to the sponsored results and suddenly you’re careening into what in another more offline world would be called a glossy print ad or a detailed brochure.

Want to see the fine print? Just scroll in deeper. Want to see what radio station the car’s audio system is tuned to? Zoom in infinitely until you can read the micro call letters on the stereo display. This technology is called Seadragon and will allow advertisers to push tons of extra data and images to searchers, a big improvement over today’s unsophisticated text ads.”

From: “MSN’s Online-Ad Plan: Let the Web Evolve.” Abbey Klaasen. Advertising Age. May 11, 2007

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