Behavioral Targeting Comes to Online Display Ads

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.

YouTube Makes itself Big Brand Marketer Friendly

We suggest YouTube will be transformed as it seeks financial favors from big advertisers. Such brands will be given favorable treatment. Google’s YouTube is now in the process of building up its advertising sales staff. Here’s an excerpt from its job announcement for ad sales Reps to be based in Santa Monica, New York, Boston, Detroit, and Chicago [my italics]:

“Join the country’s leading and fastest growing advertising sales organization. YouTube, a Google company, is looking for an Advertising Sales Representative to work in our Detroit office within our sales organization.

Founded in February 2005, YouTube is a consumer media company for people to watch and share original videos worldwide through a Web experience. YouTube originally started as a personal video sharing service, and has grown into an entertainment destination with people watching more than 70 million videos on the site daily.

Main responsibility is to drive revenue for the YouTube business unit and consult with brand advertisers and interactive agencies on how to leverage the YouTube platform and participate in the YouTube community.”

YouTube and other social networks need to serve the public interest. They will likely, however, become commercial communities foremost. But that’s not a real community. So, YouTube, MySpace, Facebook and the crop of social networks on broadband (including mobile) must make their business model transparent. They need to make public what major advertisers get, in terms of access to users, data, placement, etc. Google should be playing a leadership role here, as well as Microsoft, Yahoo! and other key services.  They also should promise to always provide free and prominent civic space for candidates, issues, and public interest content.

Why is the Knight Foundation Giving a $700K Grant to Viacom? So MTV Can Sell Ads and Collect Data?

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.

Two Books to Read about Behavioral Targeting and Interactive Marketing

Nothing like getting it from those that practice it. I urge all regulators, public interest consumer advocates, journalists, and others concerned about their privacy (let alone other key civil society issues) to read:

Fishing From a Barrel: Using Behavioral Targeting to Reach the Right People With he Right Ads at the Right Time. Rob Graham. Learningcraft Press.

The Online Advertising Playbook. Joe Plummer, Steve Rappaport, Taddy Hall, and Robert Barocci. Wiley.

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Congressional Dems Helping Media Consolidation?

When heavyweights like Sen. Dick Durbin, Rep. Rahm Emanuel and others in the Illinois Congressional delegation write to the FCC Chairman about the Tribune Company’s request for media ownership waivers, it’s not so subtle message is: help this giant constituent out, asap!” The May 18th letter, urged Chairman Martin and the other Commissions to act “expeditiously and to avoid administrative delay.” “We believe that prompt consideration of the merits of the Tribune Company applications is in the public interest and would be very grateful if you would give this matter your personal attention and act upon these applications in a timely fashion.” They were joined by former Speaker Rep. Denny Hastert (a total of 14 out of 19 members of the state’s delegation signed the letter). Broadcasting & Cable magazine explained [reg. may be required] that “Tribune has to file for transfer of control applications for its TV stations as it moves to take the company private. Some of those stations have been operating under a waiver of the FCC’s newspaper-broadcast cross-ownership rule.”

While the letter says the lawmakers don’t take a position on the merger-related request, it serves as placing pressure on the FCC to help out Tribune. Such a request, of course, should receive a complete and in-depth review by the agency, and not be rushed through. But the Durbin/Emanuel/Hastert letter suggests that many from both political parties–as usual–are inclined to help out powerful media companies. The letter from Durbin and the Dems should have said: FCC, we’re worried about media consolidation and you better take your time and do this right!

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Beyond Tipping Point, Acxiom Deal Shows Data-Driven Deal-making Gone Wild (FTC,

Just for the record, the proposed buy-out of Acxiom illustrates what a unique moment we face. It’s a crossroads for the future of the digital media, as it relates to competition, privacy, content creation. It’s also a test for regulators & the Democratic-controlled Congress. Who will come first—the public interest or vested wealthy ones?

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Online Advertising–and then there were only two

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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Chronicles of New Media Consolidation: Three Companies Control Ad-serving market

From Technofile Europe: “This deal basically completes the elimination of independent ad-serving technologies with any market share. Ad serving on the Internet is now controlled by Microsoft (Atlas), Google (Dart) and AOL (Ad-Tech)…Consolidation in the ad serving technology market — And then there were only three ad servers: aQuantive (acq Accipiter), DoubleClick (acq Falk eSolutions), AOL (acq Ad-Tech).”

A Reason to Fear GoogleClick, Microquantive (hoo?), YahoRight(bebo?), TimeWarnThird Screen, WPP/Real, etc.

These are the media mergers public interest advocates and those concerned about Internet freedom should be focused on. The big deals are about controlling the future of much of the digital world. Nearly $11 billion has recently been spent in “deal activity” notes Online Media Daily. One key issue is privacy–since the business model behind all these acquisitions is the sweeping up and targeted use of our data. Here’s what one marketing analyst wrote about these online ad mergers and its implications for our data-driven marketing world:

“Microsoft, Yahoo and Google each has huge databases of consumer and business names filled with profiles, preferences, opt-ins and online activity histories. Imagine integrating the data they hold with content they create or license to create turnkey 1-to-1 and one-to-many multi-channel digital communications streams. The possibilities are astounding, assuming they can get beyond their own internal politics and product silos and withstand increased anxiety about Big Brotherism.”