Google, Microsoft, China, Digital Advertising and Human Rights.

It took the equivalent of a Chinese digital Watergate break-in before Google reconsidered its position on China and their anti-democratic and censorious policies.  Google should never agreed to a censored version of itself in the first place.  But China represents what will be the world’s number one online marketing gold mine, irresistible for those in the interactive advertising business.  l hope that Google will actually withdraw from China, until democracy is assured.  But meanwhile, it’s interesting to briefly explore what Google and other online marketing companies are doing in the China market, including Hong Kong.

Google’s research division in China has been investigating “”Large-scale data mining and its applications for information retrieval.”  Google is still, as of today, listing job openings for its China operation. Google’s DoubleClick features its Hong Kong work (as part of its Asia Pacific focus).  [It’s also important to see what kind of data collection might be done by Google’s DoubleClick Ad Exchange in that market].

But policymakers and the public should also focus on Microsoft.  Microsoft has a key research lab on interactive ads based in Beijing; Microsoft Advertising has a major focus on China and online ads. Microsoft and many others research the online behaviors of Asians, including young users.  Yahoo operates in China as well. Finally, U.S. online ad companies focused on data mining are opening up branches in Hong Kong, in order to better position themselves with the Asia-Pacific market.

Google’s withdrawal from China would be a model for other companies–we hope it does it.  But the focus should be on how the online marketing industry at large, including ad giants such as WPP, are facilitating a system that deprives its citizens of their rights.

Facebook Boosts of its Brand Building Power, with Nielsen [“Brand Lift”] Research on the way to help

In a December 2009 interview in New Media Age, Facebook’s director for commercial marketing in the EMEA and UK market explained that [excerpt]:  CPMs on our home page are three or four times those of Yahoo’s. On click-through, the engagement levels we’re getting are 10-15 times that. Not 10% more, 10-15 times Yahoo’s click-through rates. This is where we’re selling to P&G and those big brands.  The other side of our business is performance: those little square boxes, ASUs [Ad Space Units], that appear everywhere except the home page. 80% of our inventory is driven through a self-service auction model. We’re on 50bn of them a month in the UK. That’s scale. And big brands are saying they’re getting more volume and lower cost than Google on Facebook right now…The big thing we’re bringing to the market in early Q1 is Nielsen-branded research, which will reveal what people are doing, using awareness consideration and favourability metrics that are important to branded advertising. We’ll be able to quantify this via Nielsen.“

Facebook to Graduate Students: Come help us data mine, boost online advertising, and we will pay your tuition

Facebook’s new academic Fellowship program places the social network along with other companies, such as Google, that like to tap into the “academy,” especially students.  Facebook says every day it “confronts among the most complex technical problems and we believe that close relationships with the academy will enable us to address many of these problems at a fundamental level and solve them.”   Among the areas Facebook wants inexpensive help with is “Data Mining and Machine Learning: learning algorithms, feature generation, and evaluation methods to produce effective online and offline models of behavioral signals.”  There are several other areas of interest, including “Internet Economics: auction theory and algorithmic game theory relevant to online advertising auctions.”

In exchange, Facebook offers to pay tuition, a $30k stipend, a travel allowance, and a chance for a paid summer internship.  The pitch must be endorsed by a faculty member that “clearly identifies the area of focus and applicability to Facebook.”   Our suggestion:  students should apply with projects which hold Facebook more accountable for its privacy and data collection practices.

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.

Which “Network/Entertainment” Company is Expanding its use of Neuromarketing? NeuroFocus Looks for Specialist to help that showbiz client “Develop actionable insights from neurological studies”

Companies that rely on influencing brain behavior in order to achieve marketing goals are treading on a very slippery regulatory slope.  Nielsen-backed NeuroFocus is currently searching for a “Partner” in its “Consulting Practice.”  That person will be “responsible for the development and presentation of neurological studies commissioned by our key client in the network/entertainment industry…Of primary focus will be…developing insights from the neurological study results to benefit the client leading to a lasting relationship. Summary of essential job functions:

…
• Develop actionable insights from neurological studies
• Present results of neurological studies directly to clients
• Deep understanding of entertainment industry / network & cable television industry
• Experience in management consulting, market research, and advertising…

NeuroFocus, Inc. is the market leader in bringing neuroscience to the world of advertising, messaging, packaging, and product development. NeuroFocus clients include Fortune 100 companies across consumer package goods, food and beverage, entertainment, financial services, automotive, consumer electronics and retail sectors. NeuroFocus clients also include major companies in the TV and Motion Picture industries.”

CDD & Consumer Watchdog ask FTC to Block Google/AdMob Deal and also Protect Mobile Consumer Privacy

News Release
Monday, Dec. 28, 2009

Two Consumer Groups Ask FTC To Block Google’s $750 million Purchase Of AdMob
Deal to Buy Mobile Advertising Company Is Anti-Competitive And Raises Privacy Concerns

WASHINGTON, DC — Two consumer groups today asked the Federal Trade Commission to block Google’s $750 million deal to buy AdMob, a mobile advertising company, on anti-trust grounds. In addition, the groups said, the proposed acquisition raises privacy concerns that the Commission must address.

In a joint letter to the FTC, Consumer Watchdog and the Center for Digital Democracy (CDD) said Google is simply buying its way to dominance in the mobile advertising market, diminishing competition to the detriment of consumers.

“The mobile sector is the next frontier of the digital revolution. Without vigorous competition and strong privacy guarantees this vital and growing segment of the online economy will be stifled,” wrote  John M. Simpson, consumer advocate at Consumer Watchdog  and CDD Executive Director Jeffery A. Chester. “Consumers will face higher prices, less innovation and fewer choices.  The FTC should conduct the appropriate investigation, block the proposed Google/AdMob deal, and also address the privacy issues.”

Last week Google said the FTC has made a so-called “second request” for additional information about the deal indicating the commission is scrutinizing the proposal in great detail.

Besides the anti-trust issues, the letter from the two non-partisan, non-profit groups said, a combined Google/AdMob raises substantial privacy concerns.  Both AdMob and Google gather tremendous amounts of data about consumers’ online behavior, including their location.  AdMob, for example, targets consumers using a wide range of methods, including behavioral, ethnicity, age and gender, and education. In addition to its extensive mobile ad apparatus, Google also provides mobile advertising and data driven analytical services through its DoubleClick subsidiary.  The consolidation of AdMob into Google would provide significant amounts of data for tracking, profiling and targeting U.S. mobile consumers.

Read the letter here: http://www.consumerwatchdog.org/resources/LtrFTCfinal.pdf

“Permitting the expansion of mobile advertising through the combination of these two market leaders without requiring privacy guarantees poses a serious threat to consumers,” the letter said.  It noted that earlier this year several consumer groups, including CDD, petitioned the FTC to specifically protect consumer privacy on mobile phones, especially involving mobile advertising.

Initially Google was able to obtain its dominance in online search advertising largely because of innovative efforts.  It then moved into display advertising through the acquisition of DoubleClick. When the FTC approved that acquisition, the Commission said it would watch developments in Internet advertising closely. Since that deal was approved, the online and mobile ad markets have evolved substantially, with Google becoming more dominant in the Internet ad market.

“The proposed Google/AdMob deal offers the FTC an opportunity to check Google’s increasingly anticompetitive behavior,” Simpson said. “This deal is yet one more example of Google attempting to eliminate a threat to its power.”   “The FTC must protect competition and personal privacy in the key mobile sector,” noted Chester.

– 30 –

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.

CDD Joins Facebook FTC Complaint

“Facebook’s new policy has seriously eroded the privacy rights of its members,” explained Jeff Chester, executive director of the Center for Digital Democracy (CDD).  “The leading social network has not acted responsibly.  It cannot be permitted to deliberately weaken the control its users have over their information,  just because it may boost its bottom line.  We call on the FTC to swiftly act on this complaint to protect the more than 100 million U.S. members of Facebook.”

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 scientifically-validated tools and creative approaches to research problems;
• Delivers “superb” scientific and analytic expertise, with a scientific 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.” 

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%  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.”  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.