We have been telling regulators and others, in discussing GoogleClick, YahooRight, and MicroaQuantive, that the danger in terms of privacy (and competition) is connected to the ability to collect user data & target via the converging search and broadband video market. We think this excerpt from today’s Online Media Daily illustrates what’s here:
“The future of online marketing lies in making graphical display ads and video perform as effectively for marketers as search marketing has. And the key to that is data.
If you’re looking for a marketplace that works–search is the best model to look at. Marketers are essentially bidding on “data”–in this case keyword data–to create an economic marketplace that ties them together with consumers.
Every time you search, you’re telling marketers exactly what you’re interested in at that very moment. That’s why search ads are so targeted and perform so well. What many people don’t realize is that by merging behavioral and other data sets with real time analytics and sophisticated targeting, we can now achieve that same level of performance with display ads…
For the handful of “next-generation,” targeted ad networks capable of adding this type of value to inventory, it means we hold the keys to a market that’s potentially five times the size of the search market, measured by total available ad impressions.”
from: Online Advertising Future: Automation or Data? Gurbaksh Chahal. May 24, 2007.
The Knight Foundation’s “News Challenge” has announced its grants. But one which raises questions is the $700k grant to Viacom’s MTV. First, the idea that one of the most financially-successful media corporations, with billions in annual revenue, requires a grant for public service boggles the mind. But beyond the pure outrage of Viacom seeking a grant (and taking money away from a well-deserving non-profit or start-up), are the questions which Knight and Viacom must address. The 700 K grant is for a MTV project that will “cover the 2008 presidential election with a Knight Mobile Youth Journalist in every state and the District of Columbia who will create video news reports specifically for distribution on cell phones. The weekly reports will be voted on by the public, and the best will be rebroadcast on the MTV television network. By enabling young adults to report on issues that interest them and distribute those reports on their most commonly used digital medium, the cell phone, MTV hopes to compel leading presidential candidates to address issues important to this demographic and to mobilize you adults to register and vote.”
What happens to all the data Viacom collects from young users? Will it be stored in Viacom’s data-mining operation for subsequent targeting? What kind of behavioral profiling or other data collection techniques will be used? Will MTV “serve” ads to these users? Will these ads be based on the data collection? What will MTV do with such revenue?
You get the picture. The Knight Foundation should be calling on the major news and media conglomerates to support projects which illustrate the potential of the new media to serve democracy and journalism. It should not be funding the fabulously wealthy to do what they long ago should have done with television–and should be now be doing with new media: financially supporting public interest programming.
PS: Note to enterprising journalists. Viacom, we believe, has pursued the foundation grant-seeking route before, to good results for it’s already fattened bottom line. There’s a bigger story here.
From Online Media Daily (excerpt & our bold):
“The deal was not about the $40 billion in interactive advertising Microsoft projects marketers will spend this year, said Kevin Johnson, president of Microsoft’s platforms and services division, in a conference call Friday morning. Instead, it’s a bet on the future of the total $600 billion advertising market as spending continues to shift to interactive channels, he said, adding that Microsoft now has a soup-to-nuts offering.
“As we look at how the market is evolving, we think there will only be two large-scale advertising platforms … and we will be one of them,” Joe Doran, general manager of Microsoft’s digital advertising solutions unit, told OnlineMediaDaily. (The other being Google/DoubleClick.)
“Microsoft’s $6B Deals Caps Watershed Month for Digital.” Laurie Peterson. Online Media Daily, May 21, 2007.
This excerpt from another article is about data related to marketing, but has broad privacy implications as well:
“If Microsoft gains access to all the data, across all the engines, for aQuantive’s entire client roster of search clients, it will be sitting on a treasure trove of information that it’s never seen before — and which should have Google feeling very nervous. The same is true, of course, for the information that DoubleClick’s Performics can provide to Google. To a network, an agency is a wealth of competitive data — a fact about which all of the networks are undoubtedly aware.”
“Why Conglomeration Could Be Bad For Advertisers.” Mark Simon. Search Insider. May 21, 2007.
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I co-authored a report released yesterday. For those concerned about the obesity crisis, it’s a useful resource. It also offers a good overview about the forces shaping the global media system. It’s available here.
Todayâ€™s announcement that Microsoft is swallowing the immense aQuantive digital marketing apparatus is no surprise. Having lost the leading third-party online display giant Doubleclick to its archrival Google, Microsoft is desperate to remain relevant in online marketing. The $6b acquisition of aQuantive provides Microsoft and its adCenter platform with the digital marketing clout of Atlas. Atlas products include services designed to super-charge brand-marketing friendly ads utilizing rich media, broadband video, search, etc.
The deal is more proof that the FTC better wake-up and do something about the consolidation of the online advertising market. That agency canâ€™t address the hypocrisy though of Microsoft lobbyists. They have beseeched advocates, including this blogger, to stop the Google-Doubleclick merger. All along we knew that Microsoft was desperately seeking a deal, including with Yahoo!
We will discuss the deal later in this column. But it underscores what weâ€™ve been saying, including in our November 2006 complaint to the FTC. Thereâ€™s major and troubling consolidation occurring in the online ad market. If we want to see competition and content diversity thrive online, regulators need to act. Perhaps our friends in Europe at least will. They certainly need to examine the landscape over the last few weeks. Yahoo! acquires the remaining interest of Right Media for $680m; Time Warner’s AOL buys German-based adTech and Third Screen Media; and ad giant WPP snatches up 24/7 Real Media online ad firm for $649m. Something, we suggest, is going on. Is the FTC listening?
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â€œWe can tell you who sawâ€¦we let you target thatâ€¦we will let you serve that on daypartingâ€¦â€ Yusuf Mendi, Microsoftâ€™s Senior VP and â€œChief Advertising Strategistâ€ delivered such wordsâ€”and more— yesterday. We urge you to watch and listen to his presentation. One learns that Microsoft is willing to help its wealthiest customers to better â€œpopâ€ their brands. This includes helping them `knowâ€™ â€œwho the user is and target to the user.â€ Mendi told the group that he knows they donâ€™t want to target only â€œraw tonnage.â€ So, for Microsoft, the â€œquality of the userâ€ can be better defined by the â€œ25 behavioral segmentsâ€ that can be targeted to the â€œ280 million people who use Hotmailâ€ at least once a month. The 280 million Messenger users can be targeted with rich media marketing technologies that sense their mouse hovering and interacting with an ad. For Microsoft, the â€œend to end IP experienceâ€ is all about transforming the global digital platform into one powerful brandwashing system.
Mr. Mendi told the audience that Microsoft is â€œopen for businessâ€ to help â€œredefineâ€ the Internetâ€™s future. Such a futureâ€”given to us by Microsoft, Google, Yahoo!, major ad agencies and marketersâ€”raises a series of disturbing questions and should be a cause for alarm and debate. The foremost role for digital media should be to promote civil society (thatâ€™s not the â€œcauseâ€ marketing cases Microsoft and others have embraced as the â€œTrojan Horseâ€ to convince everyone to endorse the idea about data collection and targeted interactive marketing). Shaping the most powerful platforms so it can better collect our data and then drive our behaviors—without our full awareness and informed consentâ€”is not a responsible act. Thatâ€™s why itâ€™s time for a much more robust debate about where this is headedâ€”before itâ€™s too late.
We will be come back to Mr. Gates and the Summit.
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excerpt and my italics: “Googleâ€™s lobbying activities and its March move to join the Coalition for 4G in America (a consortium that joins Skype, Yahoo, satellite TV provider DirecTV, EchoStar, Intel and wireless services provider Access Spectrum) are bearing fruit. The coalition â€“ which is widely considered to be dominated by Google â€“ has petitioned the FCC asking for policy changes in the airwaves auction. If it has its way the auction will allow packaged bidding, a policy change that would let bidders acquire nationwide licenses…If Google does indeed go wireless, then it will control two key touch points to mobile content and apps: the network and the mobile search engine. It also will be in a prime position to dictate the mobile advertising ecosystem from end to end and not have to bother with pesky mobile operators and third-party players that demand their share of the ad revenue pie. The jury is on whether this is the plan. But if anyone can pull this off, Google can.”