All Tracking, All Predicting, All Targeting: Insights into how consumers are behaviorally targeted via the China digital ad market

We live in a world that is being increasingly shaped by the forces of digital advertising. It’s a largely global market after all, and there are very important developments in places such as China, India, and in the United Kingdom that have relevance for online privacy in the U.S. This description of the targeted online advertising model embraced by the China-based PinYou is very revealing of where behavioral targeting is today and headed [our emphasis]:

“The idea is really to understand consumers based on behaviors and profile them based on accumulated inputs. Instead of being reactive, we need to be predictive. Instead of indexing pages, or key words, we are indexing consumers Instead of creating preset segments, we understand multiple dimensions of consumers. As a result, we can deliver ads to the right consumers regardless where they are. We target a consumer not because he is now visiting a page, but rather because he has searched some key words, and he has visited certain sites, etc. As a result, different people see different ads when they log on the same page…The long term vision of PinYou is to allow advertisers to be able to come in and define the specific target consumers based on different dimensions for an advertising campaign. PinYou’s system will profile consumers based on multiple inputs, including demographics, psychographics, category interests, lifestyle and purchasing funnel. Through PinYou’s network of publishers, the ad will automatically appear whenever the target consumers visit the page. What Valueclick recently launched in the U.S “precision profiling” is similar to what we have in mind.”

Ms. Huang does say she is aware and concerned about the privacy issues (and refers to the current political debate in the U.S. over online behavioral tracking). You should read the interview. But to us, Ms. Huang primarily embraces a perspective echoed by online marketers in the U.S. that threatens consumer privacy.
source: “Interview with Grace Huang, Founder of Behavioral Targeting Startup PinYou.” Kaiser Koo. Ogilvy Digital Watch. Aug. 15, 2008

Google/Yahoo deal raises competition and privacy concerns: the redacted SEC filing

The proposed deal where Yahoo turns over to Google a great deal of its search ad function is available via the SEC. Although it’s the redacted version, there’s enough detail to raise questions. Policymakers, consumer advocates, competitors, and the public should be concerned. The document underscores how competition has eroded in the online ad marketplace for search. The agreement first graph has this phrase [our italics]: “WHEREAS, Yahoo! desires to obtain the right to utilize Google’s monetization services in connection with certain web sites and Google desires to make these services available to Yahoo!.”

In other words, Yahoo! simply can’t make it on its own. Google gets to “conduct a review of each Prospective Yahoo! Partner Property” for the deal–which means Yahoo!’s relationships are now also Google’s. Google controls the ad copy–which Yahoo! can’t touch. Yahoo! becomes a mere licensee of Google services [“Google grants to Yahoo! a limited, nonexclusive and non-sublicensable license during the Term to access and use the Google Materials solely for the purpose of implementing and receiving the Services…”].

Beyond the deal’s threat to competition, there are privacy issues. Policymakers must ensure that we understand what data is being collected and shared by the two leading search firms. What information is to be obtained in what the agreement terms as a “client ID” [“Client ID” means a unique alphanumeric code or other designation or identifier that is provided to Yahoo! by Google to be used by Yahoo! as a Client ID in accordance with the Documentation…Yahoo! must assign a separate Client ID to each category of [*].”] The * indicates a redacted portion of the agreement.

We believe this deal will further undermine competition in a key online ad sector,  and only further strengthen Google. But beyond competition, consumers need to know how the deal will involve their data. Both Google and Yahoo should make it clear what data and analytics will be developed and shared.

Behavioral Targeting Lawsuit Illuminates How Data is Collected From You

Look for a moment at an excerpt from a legal tangle between behavioral targeting companies Valueclick and Tacoda (the latter now owned by Time Warner). Valueclick filed suit on July 15 claiming patent infringements, including for one entitled “Method and Apparatus for Determining Behavioral Profile of a User.” Read the “Abstract” and part of the “Summary of the Invention” for this patent and think about your privacy (and that this is based on 1998 technology!):“Abstract: Computer network method and apparatus provides targeting of appropriate audience based on psychographic or behavioral profiles of end users. The psychographic profile is formed by recording computer activity and viewing habits of the end user. Content of categories of interest and display format in each category are revealed by the psychographic profile, based on user viewing of agate information. Using the profile (with or without additional user demographics), advertisements are displayed to appropriately selected users. Based on regression analysis of recorded responses of a first set of users viewing the advertisements, the target user profile is refined. Viewing by and regression analysis of recorded responses of subsequent sets of users continually auto-target and customizes ads for the optimal end user audience.”

Summary Of The Invention: …Over time, the tracking and profiling member holds a history and/or pattern of user activity which in turn is interpreted as a users habits and/or preferences. To that end, a psychographic profile is inferred from the recorded activities in the tracking and profiling member. Further, the tracking and profiling member records presentation (formal) preferences of the users based on user viewing activity. Preferences with respect to color schemes, text size, shapes, and the like are recorded as part of the psychographic profile of a user…The tracking and profiling member also records demographics of each user. As a result, the data assembly is able to transmit advertisements for display to users based on psychographic and demographic profiles of the user to provide targeted marketing.”
source: Complaint for Patent Infringement: Jury Trial Demanded. Valueclick, Inc. v, Tacoda, Inc. Case No. CV08-04619 DSF. U.S. District Court, Central District of California, Western Division.

Google’s patent to target social media ads: monitoring online communities

Google has been assigned a patent which abstract says is: “[A] computer-implemented method for displaying advertisements to members of a network comprises identifying one or more communities of members, identifying one or more influencers in the one or more communities, and placing one or more advertisements at the profiles of one or more members in the identified one or more communities.” Google may be joining the rush to further monetize (and spy, as far as I’m concerned) on social network communities. Social media marketing is the latest boomlet in online advertising. Here’s an excerpt from the patent.  Btw, I don’t see the word privacy mentioned in the patent application! [my bold]:

As the Internet has become increasingly popular, online social networks are becoming an important and pervasive mechanism for communication, entertainment, and professional and social networking. Members of a network implicitly associate or explicitly link themselves with one or more members within the network based on factors such as common interests. Interaction and signaling between members either directly or through other members cause the formation of communities of common interests within the online social network. The members of such communities are connected by one or more common interests.

Factors such as member interactions, content on member profiles, dynamically changing size of the community, and the like establish a hierarchy within a community where certain members are more popular than others and, consequently, wield enhanced influence over other members in the community.


The present inventors recognized that blanket advertising across the network tends not to be cost-efficient to advertisers, since the members of the network tend not to be interested in the products and services being advertised unless the advertisements are relevant to the members’ interest. Presenting to advertisers a community of members sharing a common interest provides advertisers with an opportunity to present products and services of interest to the members of the network, thereby maximizing the return on the investment made to advertising.

The present inventors also recognized that advertising to members of an online social network based solely on the content of their profile lacks targeted generation of advertisements. Members of a community may have content on their profile in addition to the common interest of the community, such as personal information, etc. Relying solely on the content of the profile of a member of a community decreases the specificity of advertisements to the community since the presence of additional information distorts the signal from the content related to the common interests.

In one implementation, a computer-implemented method for displaying advertisements to members of a network is described. The method includes identifying one or more communities within a network, wherein the community can include a plurality of members of the network, identifying one or more influencers in the one or more communities, and placing one or more advertisements at the profiles of one or more members in the one or more communities…

The systems and techniques described here may provide one or more of the following advantages. First, a system can identify communities of common interests within an online social network. This may allow advertisers to target the communities based on the common interest of the community, as opposed to the content of individual profiles. Second, a system can identify members who belong to overlapping communities as a result of more than one common interest. By blending advertisements relevant to the interests of each of the overlapping communities, advertisers may target the members common to these communities. Third, a system can identify the influencers from among the members of a community. This may provide advertisers with the option of targeting either all members in the community or advertising only on the profile of the influencer, thereby targeting the entire community.

In addition, the system encourages members of communities in online social networks to enrich the content on their profiles. The presence of high quality content relevant to shared interests on a member’s profile increases the popularity of the member in the community and improves a member’s chances of being an influencer. An influencer may receive financial incentives from advertisers in exchange for permission to display advertisements on the member’s profile.

Letters to Hill on Online Advertising and Privacy: A Failure to Communicate

The two headlines coming from the responses sent to the House Energy and Commerce Committee so far are that trials of deep packet inspection ad tracking/targeting were launched without meaningfully informing subscribers, and that the companies really failed to fully disclose all the data collection and targeting they routinely do.

On the second point, a strategy by several companies was to gloss over what they collect from behavioral targeting. You would never know reading AOL’s letter, for example, that it acquired behavioral targeting leader Tacoda last year [which is now integrated into AOL’s “Platform A” system]. AOL’s letter to the Hill is a fairy tale version of the targeting it can do. To see a video produced for AOL’s that is more honest about its ability to collect and target, see its “Holy Grail of Online Advertising” animated promo.

Charter Cable, which was working with NebuAd until advocates and Congress raised the alarm, suggests for whatever online ad services it does on its website, it relies “on third-parties, such as Yahoo and Google to perform these functions.” But it promotes its site saying that: “More leads. Better leads. Precise geographic and demographic targeting. Unparralled branding power. isn’t just another vehicle site. is a powerful new way to combine the targeting precision of Cable TV and the internet to create a powerful sales building program.” Comcast answers the Congress by repeatedly claiming that it doesn’t target individuals online. It could have included in its letter what it says to potential advertisers, that: “On a monthly basis, receives over 3 billion page views, 15 million unique users, average visit length of over 14.9 minutes and over 60 million video streams. Mail Center has over 20 million registered accounts, 7 million logins per day and over 2 billion page views a month.” None of the cable companies, of course, said a word about their coordinated moves into personalized interactive television ad targeting (Project Canoe). Insight cable could have included in its letter a section from its privacy policy, which says that:“Our Website may post banner ads or other forms of advertisements and/or links from third party advertisers that are not owned or operated by Insight or Insight Entities. These third party advertisers may independently solicit and collect personal information, or send their own tracking devices to our visitors. Other third party Internet programs or applications may also cause additional advertisements or banner ads to appear on top of our web pages. Insight does not have control over the placement of such advertisements or the tracking devices utilized through these applications. When you visit a third party advertiser’s Website, you will be subject to the privacy policy and terms of usage agreement of that Website operator.”

Of course, the tests by CableOne, CenturyTel, and Knology reveal the failure of the current disclosure process. Customers shouldn’t be required to read complex and confusing legal updates about privacy policy. The lack of candor from Google, Yahoo, Verizon, Comcast, etc. should be addressed by the companies quickly supplying new information to Congress about their complete data collection and targeting practices and plans.

The IAB (US) “mobilizes” to Fight Against Consumer Protections for Online Media

Watch this online video of Randall Rothenberg speaking before a June Federated Media Publishing event. In Mr. Rothenberg’s worldview, demon critics of advertising (such as myself) are deliberately trying to undermine democratic digital media. This would be absurd, if it wasn’t so sad. Mr. Rothenberg is using scare tactics to whip up his members into a frenzy-all so they can fight off laws and regulations designed to provide consumers real control over their data and information. Luckily, Mr. Rothenberg will be on the losing side of this battle to protect consumers in the digital era. Regulators on both sides of the Atlantic understand how the digital marketing ecosystem raises serious concerns about privacy and consumer welfare. We have to say we are disappointed in John Battelle, the CEO of Federated (who wrote a very good book entitled The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture). Mr. Battelle should know that the online marketing system requires a series of safeguards which protects citizens and consumers. There is a balance to be struck here. Online advertisers have unleashed some of the most powerful tools designed to track, analyze, and target individuals–whether on social networks, or watching broadband video, or using mobile devices. We have never said there shouldn’t be advertising. We understand the important role it must play, including for the underwriting of online content. But the online ad system should not be designed and controlled solely by ad networks, online publishers, trade groups and online ad lobbying groups. It must be structured in a way which promotes as much freedom for individuals.

Google’s new online ad-suppported animated venture:“We feel that we have recreated the mass media”

That’s the headline here–“We feel that we have recreated the mass media,” said Kim Malone Scott, director of sales and operations for AdSense in a New York Times article on Google backing a “Calvalcade of Cartoon Comedy” for online. Google is likely using its resources which can track how long users are likely to watch a video, and how they interact with a slew of interactive advertising pitches. They can measure each click too, so they can better determine what works for the commercial sell.

But, of course, the analogy to the “mass media” is what is interesting. Google is leading the way to recreate the mass media in the digital age. They are right about that. But with such an ambitious plan comes responsibility–to ensure there is funding for serious and diverse independent news, investigative reporting, and quality cultural programming. Google should also help ensure that women and people of color–now cut out of ownership in media–actually own significant parts of the new digital content landscape. And there must also be a serious privacy policy which covers broadband video as well. Google, its advertisers, and partners shouldn’t automatically know what we watch and how we respond (without our permission–and with special rules for children and adolescents).

source for quote: Google and Creator of `Family Guy’ Strike a Deal. Brooks Barnes. NYT. June 30, 2008

The IAB Can’t Say the Word “Privacy” Before the U.S. Congress

On Wednesday, IAB president Randall Rothenberg testified before a House Small Business subcommittee. Incredibly, the written testimony failed to mention privacy. Nor did the testimony really convey the nature of interactive advertising today. We will be contacting the subcommittee to set the record straight. And the IAB has to do some serious soul-searching. As more people become informed about the data collection and targeting practices underlying digital marketing, they will expect that companies doing business online are engaged in ethical data collection practices. This will be especially true when it comes to protecting the privacy and consumer welfare of children and teens.

PS: This excerpt from Mr. Rothenberg’s testimony is another illustration of how out of touch the IAB has become. They can’t acknowledge the industry’s problems and offer reasonable solutions. The IAB is also going to hurt small business, once customers learn how their privacy is threatened (and how online advertising raises medical and financial data issues, for example). Perhaps someone will come along offering responsible leadership on this issue for small business. They aren’t getting it from the IAB’s lobbying campaign. Once again, no one is saying there shouldn’t be online advertising. But we are saying that privacy has to be protected–where consumers are in charge of what is collected. And that some practices–including data collection and targeting of children and adolescents as well as sectors such as medical information–require safeguards. But the IAB’s leadership has decided to use the “Chicken Little, Our Data Won’t Be Falling” scare tactic.

“A small but vocal coterie of forces opposed generally to marketing, advertising, and open media markets is attempting to advocate to limit the technology responsible for this internet advertising revolution.

Although these advocacy groups have provided no evidence of public harm, their efforts have begun resulting in regulatory proposals which, if enacted, would severely hinder the ability of small publishers to support themselves with advertising sales, and impair the ability of small businesses to use interactive advertising to market themselves.”

Congress and Anti-trust Officials Must Take Action on Google-Yahoo! Deal: Competition and Privacy Issues at Stake

The government must take swift action to prevent the creation of a digital combine that merges assets and services of the first and second leading online search advertising companies—Google and Yahoo!
Google is the country’s (and world’s) leading search firm. Yahoo is ranked number two and says it is the foremost online display advertising company. This combination potentially threatens user privacy, as more data (including behavioral and mobile) about consumers are shared or pooled by the two leading online giants. Competition in the online ad sector—already weakened by a series of takeovers and acquisitions—is seriously threatened. This deal will have a significant impact on the advertising industry, including agencies. Both Google and Yahoo also provide critical search advertising services for many of the nation’s leading newspapers. Congress will need to explore how this deal impacts journalism, especially at a crucial marketplace juncture for the traditional media industries. Yahoo is permitting Google to extend its reach into one its significant assets–paid search. Shareholders will also suffer, as Yahoo! will be viewed by advertisers as a less effective means to target consumers.

Statement on behalf of the Center for Digital Democracy

Tracking You Offline and Now On: Acxiom Database Targeting Products Integrated into ComScore

We are rushing headlong to the seamless integration of consumer tracking and targeting across all “platforms.” We believe the further blending of more traditional “offline” segmentation and targeting tools into the online marketing system raises disturbing privacy and consumer protection issues. Yesterday, Comscore announced that “the addition of Acxiom’s PersonicX segments to the comScore Segment Metrix service for the U.S. market. This powerful new offering is targeted at advertising agencies and marketers seeking higher performing online media plans… PersonicX is a household-level segmentation system developed by Acxiom and used by marketers that groups consumers into 70 different lifestage-based segments based on several demographic variables… Predictive of U.S. consumer behaviors, media preferences, shopping patterns, and financial needs, marketers rely on Acxiom’s PersonicX to target more specific segments in an offline environment than is possible using simple age breaks. comScore Segment Metrix – PersonicX now enables marketers to reach these targeted segments via online as well as offline media, helping marketers better hone their messaging strategy, value proposition, and media placement… said Tim Suther, Acxiom senior vice president for digital marketing services. “The unparalleled insight into the interests of various lifestage interests created as a result of this partnership will allow marketers to generate enhanced planning strategies driven by improved segmentation and better execution by using targeting approaches that accurately align their online and offline marketing efforts.”