The Berkman Center is well-known for its work on digital media issues.Â But it has often failed to address–in its research and public work–the negative consequences of online marketing and interactive advertising.Â Berkman is partially funded by leading online marketers–including Google and Microsoft.Â When Berkman conducts research on such issues as children’s online marketing and privacy [an issue I am involved with], it should always prominently disclose on the first publication page its funding conflicts–including whether Berkman staff work with online marketers.Â Berkman should tell Congress and the FTC about such conflicts when it submits research and testimony.
For example, Berkman’s faculty co-director John Palfrey works for a venture investing firm that financially backs behavioral targeting and other online marketing companies.Â Professor Palfrey does disclose on his blog that in addition to his Harvard duties, he is also a “Venture Executive” at Highland Capital Partners.Â Highland’s “Internet and Digital Team,” which Prof. Palfrey serves on, has one current investment in Affine Systems, a video targeting company. Affine’s Video Platform explains it enables marketers to engage in behavioral targeting:Â “Affine integrates behavioral data from exchanges and exclusive third-party partnerships. This data is used to audit and optimize campaigns as they run. Detailed analytics are collected, and valuable retargeting data is generated with every campaign.”Â [“What makes the Video Targeting Platform special is the amount of insight it provides…by taking advantage of the data provided by Affine’s data partners, you can even target specific demographic or psychographic groups, and reduce the waste that is currently expected from online video buys.”].Â Highland also invests in search engine and interactive TV companies serving the China market and many others. [Given the investments in China’s online market by Mr. Palfrey’s company, it also raises questions about Berkman’s Global Network Initiative role evaluating how companies like Google and Yahoo operating in China and elsewhere address human rights].Â Previous online marketing (and behavioral targeted related) investments made by Highland included the youth online targeting company Bolt, Coremetrics, and mobile ad targeting company Quattro.
The well-known online analyst and commentator Dana Boyd is a Fellow at Berkman, and has made it clear she also works for Microsoft Research.Â But given Microsoft Advertising global efforts to extend the power of online marketing and personalized data collection, including its online ad research lab in Beijing, its support for neuromarketing in digital ads, and its extensive behavioral and online targeting apparatus–including for junk food targeting youth in its gaming divisions, we hope Ms. Boyd will more closely examine her employers work in the area.
The FTC and EU will need to develop safeguards on the use and role of neuromarketing techniques in advertising, especially when deployed for online campaigns.Â Here’s an excerpt from a Yahoo post on the power of neuromarketing:
“…how do you measure the emotional connection in your advertising? Are some advertising mediums better than others in making that emotional connection? To answer these questions, Yahoo! partnered with NeuroFocus, a market leader in neurological market research. Yahoo! measured the brain waves of 74 people in real-time as they viewed online, print, and television executions of three ad campaigns from Pepsi, Infiniti, and Yahoo!…The simple answer is, consumers canâ€™t hide their brain waves. By measuring the direct response of advertising at the brain level, we are able to observe and quantify pre-cognitive reactions
before reporting biases set in.
In this study, we specifically measured emotional engagement, purchase intent, and overall effectiveness. Ad responses were measured on a 10 point scale, with the median ad performance around 5.0.
We found that the ads from all three brands performed above average across all platforms. However, when ads are optimized for the Internet, they maximize emotional connection and drive higher purchase intent. In fact, by designing ads that fully leverage the interactive strengths of the online platform, advertisers can even outperform TV in emotional engagement…When ads are optimized for the Internet, they maximize emotional connection and drive higher purchase intent
By taking full advantage of the unique capabilities of the Internet platform, the Infiniti ad scored higher on emotional engagement, purchase intent, and overall effectiveness than both the television and print version of this ad.”
from:Â Making the Emotional Connection:Â Advanced neurological research reveals deeper insights into ad effectiveness by medium.Â Yahoo.Â May 17, 2010.
]How would customers–even for donuts– feel if they knew their information was collected so they could be profiled, tracked and targeted.Â Read this excerpt from a new case study released by Yahoo!
Data becomes important in not only knowing what the customer wants, but also for getting them through the door. So Dunkinâ€™ Donuts went online with a national Yahoo! campaign to gather data to drive in store sales; a strategy that franchisees can also use at the local level…The company primarily gathers its purchase behavior data through its Dunkinâ€™ Donuts Perks Card (DD Perks), a rechargeable loyalty card that tracks data such as transaction amounts and time of day for purchases. Dunkinâ€™ Donuts analyzes this data along with the information it gathers about its customers through website enrollments, gift card registrations, and point-of-purchase promotions to drive sales…Dunkinâ€™ Donuts turned to Yahoo! because online marketing provided more accountability and engagement for the campaign…â€œYou will know exactly how many people enrolled and how much you spent. You also know that itâ€™s an efficient spend because you know those people are engaged, they opted in to get that communication, so theyâ€™re more likely to pay attention. Online is a persuasive tool, rather than a blunt instrument like broadcast,â€ says Tryder [David E. Tryder, Director of Interactive & Relationship Marketing at Dunkinâ€™ Donuts].Â Yahoo! helped Dunkinâ€™ Donuts run a 41 day display campaign with promotions to encourage customers to enroll in its DD Perks program. Yahoo! Account Manager Steven Schmitt worked with Dunkinâ€™ Donuts to implement behavioral targeting and to continually optimize the campaign to increase its performance.Â The campaign garnered over 16,000 sign-ups and through continual optimization, enrollment increased 300% between the first 14 days and the last 14 days of the campaign…With demographic, geographic, and behavioral targeting, Yahoo! can help Field Marketing Managers and franchisees go online and provide that relevant and local messaging for consumers.
Perking up Dunkinâ€™ Donuts Perks.Â Â Yahoo Advertising.Â May 18, 2010
The Interactive Ad Bureau [whose board members include Google, Fox, NBC, Comcast] is working with the marketing and data collection lobby to oppose proposed Obama Administration legislation that would enable the FTC to protect consumers.Â It’s clear from the comments below in Reuters, that the IAB is siding with those that don’t want to really address the youth obesity crisis.Â If the FTC is allowed to conduct the same rulemaking procedures that the FCC and other agencies already do, it might actually be able to better protect consumers, including kids.Â Shame on the IAB and its lobbyist colleagues for being on the side of those against the public health of our nation’s children.Â By preventing the FTC to engage in consumer protection, the IAB, ANA and others are supporting the same deregulatory scheme which led to the current financial disaster for so many Americans and our economy.Â Here’s the Reuters excerpt:
“A more powerful FTC could boost its oversight of advertising of sugary and salty snacks to children, the online collection of personal data by advertisers and green advertising, said Dan Jaffe of the Association of National Advertisers…This (financial reform/CFPA bill) is a fast moving train,” said Zaneis. “The FTC provisions that are likely to be added onto the CFPA bill really are industry’s no. 1 legislative priority.”
Here’s a brief excerpt from the “The mobiThinking guide to mobile advertising networks 2010.”Â 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 â€“ 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.
Washington, DC, December 6, 2009 â€“ On Monday December 7, 2009, consumer representatives and privacy experts speaking at the first of three Federal Trade Commission (FTC) Exploring Privacy Roundtable Series will call on the agency to adopt new policies to protect consumer privacy in todayâ€™s digitized world. Consumer and privacy groups, as well as academics and policymakers, have increasingly looked to the FTC to ensure that Americans have control over how their information is collected and used.
The groups have asked the Commission to issue a comprehensive set of Fair Information Principles for the digital era, and to abandon its previous notice and choice model, which is not effective for consumer privacy protection.
Specifically, at the Roundtable on Monday, consumer panelists and privacy experts will call on the FTC to stop relying on industry privacy self-regulation because of its long history of failure. Last September, a number of consumer groups provided Congressional leaders and the FTC a detailed blueprint of pro-active measures designed to protect privacy, available at: http://www.democraticmedia.org/release/privacy-release-20090901.
These measures include giving individuals the right to see, have a copy of, and delete any information about them; ensuring that the use of consumer data for any credit, employment, insurance, or governmental purpose or for redlining is prohibited; and ensuring that websites should only initially collect and use data from consumers for a 24-hour period, with the exception of information categorized as sensitive, which should not be collected at all. The groups have also requested that the FTC establish a Do Not Track registry.
Quotes from Mondayâ€™s panelists:
Marc Rotenberg, EPIC: â€œThere is an urgent need for the Federal Trade Commission to address the growing threat to consumer privacy.Â The Commission must hold accountable those companies that collect and use personal information. Self-regulation has clearly failed.â€
Jeff Chester, Center for Digital Democracy: â€œConsumers increasingly confront a sophisticated and pervasive data collection apparatus that can profile, track and target them online. The Obama FTC must quickly act to protect the privacy of Americans,including information related to their finances, health, and ethnicity.â€
Susan Grant, Consumer Federation of America: â€œItâ€™s time to recognize privacy as a fundamental human right and create a public policy framework that requires that right to be respected,â€ said Susan Grant, Director of Consumer Protection at Consumer Federation of America. â€œRather than stifling innovation, this will spur innovative ways to make the marketplace work better for consumers and businesses.â€
Pam Dixon, World Privacy Forum: â€œSelf-regulation of commercial data brokers has been utterly ineffective to protect consumers. Itâ€™s not just bad actors who sell personal information ranging from mental health information, medical status, income, religious and ethnic status, and the like. The sale of personal information is a routine business model for many in corporate America, and neither consumers nor policymakers are aware of the amount of trafficking in personal information. Itâ€™s time to tame the wild west with laws that incorporate the principles of the Fair Credit Reporting Act to ensure transparency, accountability, and consumer control.â€
Written statements and other materials for the roundtable panelists are available at the following links:
The Center for Digital Democracy will ask both the FCC and FTC to ensure that consumer privacy is protected as part of the regulatory review of the Comcast/NBCU partnership.Â Comcast is currently deploying interactive TV applications, including for advertising, on its cable systems.Â Â The nation’s largest cable company and broadband ISPÂ has played a leading role in developing next-generation â€œadvanced advertisingâ€ services through the Canoe Ventures interactive TV cable consortium, as well as with CableLabs (Comcast chair Brian Roberts is the chair of the board of CableLabs, the industry’s R&D center).Â For advanced advertising, information on household viewing, including from individuals, will be collected from set-top boxes that can be combined with outside databases to form viewer ad targeting profiles.Â Â Highly personal ads will be created, practically instantaneously, for real-time delivery based on these profiles. Cable and other video providers are creating a â€œreal-time decision-making systemâ€ for marketing that analyzes user data–including income, ethnicity, and viewing and behavior patterns–to help determine the precise ad to be delivered. Comcast is reportedly planningÂ â€œa gigantic database called â€œTV Warehouse,â€ able to store a full year of statistics gathered from digital set-tops in more than 16 million households nationwideâ€¦ having a massive 500 Terabytes of storage, would then feed up to a database even broader in scope operated by Canoe Venturesâ€¦â€
As the nationâ€™s biggest â€œvideo providerâ€ and â€œlargest residential Internet service provider,â€ Comcast has access to detailed financial information on its TV and broadband subscribers.Â It also has a treasure trove of consumer data on viewing behaviors online and with TV.Â Comcast can also use its dominate position as the leading high-speed ISP and cable TV provider to extract additional consumer information from its programming partners.Â Â Regulators will need to ensure effective safeguards on network neutrality, programming access and competition, and consumer privacyâ€”especially for â€œadvanced advertising.”
CDD also will ask competition authorities to review Comcast’s relationship with Canoe Ventures, and its implications on content diversity.
That’s the title of comments filed at the U.S. Federal Trade Commission by my Center for Digital Democracy and U.S. PIRG.Â I also just gave a presentation with the same name at last week’s meeting of data protection commissioners in Madrid, Spain.Â Â It’s available here.
Here’s an excerpt: Â Today, consumers online face the rapid growth and ever-increasing sophistication of the various techniques advertisers employ for data collection, profiling, and targeting across all online platforms. The growth of ad and other optimization services for targeting, involving real-time bidding on ad exchanges; the expansion of data collection capabilities from the largest advertising agencies (with the participation of leading digital media content and marketing companies); the increasing capabilities of mobile marketers to target users via enhanced data collection; and a disturbing growth of social media surveillance practices for targeted marketing are just a few of the developments the commission must address. But despite technical innovation and what may appear to be dramatic changes in the online data collection/profiling/targeting market, the commission must recognize that the underlying paradigm threatening consumer privacy online has been constant since the early 1990â€™s. So-called â€œone-to-one marketing,â€ where advertisers collect as much as possible on individual consumers so they can be targeted online, remains the fundamental approach.
The advertising lobby has been working to undermine the FTC’s ability to serve the public interest.Â Advertisers are fearful that the FTC–finally awakened from a long digital slumber–will actually investigate the numerous problems linked especially to marketing (think prescription drugs, financial marketing of subprime loans, etc.).Â They are especially concerned that the FTC will effectively address privacy and consumer protection problems related to privacy, interactive advertising, children and adolescents, and “green” marketing.Â Here’s the letter which was sent late yesterday to Chairman Waxman and Ranking Member Barton:
October 28, 2009
Chairman Henry Waxman
Rep. Joe Barton, Ranking Member
Energy and Commerce Committee
Dear Chairman Waxman and Rep. Barton:
We write to support the provisions in H.R. 3126, the â€œConsumer Financial Protection Agency Act of 2009â€ (CFPA Act), designed to ensure that the Federal Trade Commission has the resources and authority to protect consumers from unfair and deceptive practices.
We believe that the FTC must play a more proactive role addressing critical consumer concerns, including privacy, online marketing, and food advertising to young people.Â Therefore, we fully support the legislative language in H.R.3126 that would enable the commission to conduct consumer protection rulemaking under the provisions of the Administrative Procedures Act (APA); provide it with aiding and abetting liability for violations of the Section 5 of the FTC Act involving unfair or deceptive practices; and enable it to seek civil penalty liability for unfair and deceptive practices found to violate Section 5.Â We also support providing the FTC independent litigating authority in civil penalty cases.
As you know, the FTCâ€™s ability to serve consumers has been hamstrung because of its â€œMagnuson-Mossâ€ rulemaking procedure.Â As a result, the FTC has not been able to effectively engage in a timely and effective rulemaking process.Â By providing the FTC with the same APA rulemaking authority enjoyed by other federal agencies, it will enable the commission to engage in consumer protection activities in a timely manner.
American Academy of Child and Adolescent Psychiatry
Campaign for Commercial Free Childhood
Center for Democracy and Technology
Center for Digital Democracy
Center for Science in the Public Interest
Consumer Federation of America
Electronic Frontier Foundation
Media Access Project
Privacy Rights Clearinghouse
Public Health Institute
World Privacy Forum
David Britt, CEO (retired) Sesame Workshop
Prof. Kelly Brownell, Yale University
Prof. Robert McChesney, University of Illinois at Urbana-Champaign
Prof. Kathryn C. Montgomery, American University
Prof. Joseph Turow, University of Pennsylvania
Prof. Ellen Wartella, UC Riverside