Jeff Chester Reports on Digital Media and the Public Interest
That quote is attributed to David Verklin, CEO of Canoe Ventures, when he spoke at a recent industry marketing event. As noted by Inside the Marketers Studio, Mr. Verklin said that:
I think the TV can do a pretty good job at targeting. “We can certainly compete with a cookie.†Can tie it back to set top boxes, loyalty cards. 90% of grocery shopping happens with loyalty cards.
Today’s announcement by FTC Chair Jon Leibowitz that he has appointed highly regarded public interest legal scholar and litigator David C. Vladeck as the new Director of the Bureau of Consumer Protection is terrific news. Mr. Vladeck has spent decades as a dedicated public interest attorney at Public Citizen. More recently, he has co-directed the critically important Institute for Public Representation at Georgetown University (where he is also a professor of law).
We expect Mr. Vladeck will vigorously pursue, with Chairman Leibowitz’s support, a serious consumer protection agenda. Think about mortgages and other financial products, health marketing, privacy, online advertising, food marketing to children and adolescents–all of these issues and more will now get the intellectual and strategic attention they deserve.  Chairman Leibowitz deserves praise for selecting Mr. Vladeck. The Chairman also heeded the call last month from leading consumer and privacy groups, including Consumers Union, CSPI, USPIRG, Privacy Times, and my CDD, that he appoint someone truly dedicated to consumer protection. We are looking forward to a new era at the FTC.
When will members of the Congressional Internet Caucus wake up and address the role its special interest dominated “Advisory” Committee is playing? The Caucus is holding a “State of the Mobile Net” conference on April 23. It’s doubtful Congress will be receiving the unbiased information they need, given that the sponsors of the event are the leading companies engaged in mobile marketing and data collection. As typical of the “business model” crafted by the Center for Democracy and Technology connected group known as the Internet Education Foundation, the event prominently acknowledges its “Platinum” sponsors: the CTIA lobby group, Google, Microsoft and Verizon. “Gold” sponsors are AT&T, Nokia, T-Mobile. There is also a category called “promotional” sponsors which lists Yahoo and several others.
It’s highly unlikely that the meeting will discuss the real issues challenging consumer privacy and welfare on the mobile Internet (including, we expect, the recent CDD/USPIRG complaint filed at the FTC– which has helped launch an investigation into that market).  The Advisory Caucus is run by the Internet Education Foundation, whose board members include representatives from Google, Verizon, Comcast, Microsoft, Recording Industry of America, and the Consumer Electronics Association. So the line-up of speakers is crafted to make sure that corporate donor feathers–and their willingness to continue to financially contribute–aren’t ruffled. On the privacy panel for the event we have, of course, a representative from CDT.  There are also mobile marketers–including Yahoo and loopt. There is the DLA Piper law firm that advocates for industry and a lone academic. Consumers and citizens deserve better from Congress.
PS: As an example of how incredibly biased the Advisory Committee to the Congressional Net Caucus is, look at the description and speaker line-up of its recent briefing on online advertising. A supposed “unbiased” event, it featured industry lobbyists and several groups funded by online marketers! Incredibly shameful!
Advisory Committee to the Congressional Internet Caucus
Anatomy of Online Advertising: Understanding the Privacy Debate
March 30, 2009…The purpose of the briefing is to provide an unbiased foundation for understanding the various privacy issues that Congress will debate in the context of online advertising.
Panelists:
* Paula Bruening, Hunton & Williams
* Maureen Cooney, TRUSTe
* Michael Engelhardt, Adobe Systems
* Tim Lordan, Congressional Internet Caucus Advisory Committee
* Jules Polonetsky, Future of Privacy
* Heather West, Center for Democracy & Technology
* Mike Zaneis, Interactive Advertising Bureau
Last week in Brussels at a EU Consumers Summit, Google and other interactive ad companies pointed to the new Interactive Advertising Bureau/UK “Good Practice Principles for online behavioural advertising” as a model for meaningful self-regulation. The companies that have endorsed the principles include AOL/Platform A, AudienceScience, Google, Microsoft Advertising, NebuAd, Phorm, Specific Media, Yahoo! SARL, and Wunderloop.  The message sent to EU regulators was, in essence, don’t really worry about threats to privacy from online profiling and behavioural targeting. But a review of the Principles suggest that there is a serious lack of “truth in advertising” when it comes to being truly candid about data collection and interactive marketing. These Principles are insufficient–and are really a political attempt to foreclose on meaningful consumer policy safeguards.
Indeed, when one examines the new online “consumer guide” which accompanies the Principles, one has a kind of Alice in Wonderland moment. That’s because instead of being candid about the real purpose of behavioral advertising–and the system of interactive marketing it is a part of–the IAB paints an unreal and deliberately cheery picture where data collection, profiling, tracking, and targeting are just harmless techniques designed to give you a better Internet experience.  UK consumers–and policymakers–deserve something more forthright.
First, the IAB conveniently ignores the context in which behavioural targeting is just one data collection technique. As they know, online marketers are creating what they term a “media and marketing ecosystem.” A truly honest “Good Practice Principles” would address all the principal ways online marketers target consumers. That would include, as IAB/UK knows well, such approaches as social media marketing, in-game targeting, online video, neuromarketing, engagement, etc. A real code would address issues related to the use of behavioural data targeting and other techniques when used for such areas as finance (mortgages, loans, credit cards); health products; and targeting adolescents.
The IAB/UK also fails to reconcile how it describes behavioural targeting to its members and what it says to consumers and policymakers. For example, the group’s glossary defines behavioural targeting as: “A form of online marketing that uses advertising technology to target web users based on their previous behaviour. Advertising creative and content can be tailored to be of more relevance to a particular user by capturing their previous decision making behaviour (eg: filling out preferences or visiting certain areas of a site frequently) and looking for patterns.“ But its new “Good Practice” consumer guide says that “Online behavioural advertising is a way of serving advertisements on the websites you visit and making them more relevant to you and your interests. Shared interests are grouped together based upon previous web browsing activity and web users are then served advertising which matches their shared interests. In this way, advertising can be made as relevant and useful as possible.”
Incredibly, the IAB/UK claims that “the information used for targeting adverts is not personal, in that it does not identify you – the user – in the real world. Data about your browsing activity is collected and analysed anonymously.” Such an argument flies in the face of what the signatories of the “Good Practice Principles” really tell their online ad customers. For example, Yahoo in the UK explains that its “acclaimed behavioural targeting tool allows advertisers to deliver specific targeted ads to consumers at the point of purchase.” Yahoo has used behavioural targeting in the UK to help sell mortgages and other financial products. Microsoft’s UK Ad Solutions tells customers it can provide a variety of behavioural targeting tools so it “can deliver messaging to the people who are actively looking to engage with what you’re offering…With Re-messaging we can narrow our audience by finding the people who have already visited you. It means we can ensure they always stay in touch and help create continual engagement with your brand…Profile Targeting can help you find the people you’re looking for by who they are, where they are and when you want to be seen by them.” Time Warner’s Platform A/AOL says “Through our Behavioural Network, we can target your most valuable visitors across our network, earning you additional revenues, or simply fulfil your own campaign obligations. By establishing certain user traits or demographics within your audience, we are able to target those individuals with the most relevant advertising (tied into their common characteristics), or simply reach those same users in a different environment.” Or Audience Science’s UK office that explains “While other behavioural targeting technologies simply track page visits, the AudienceScience platform analyzes multiple indicators of intent:
• Which pages and sections they have visited
• What static and dynamic content they have read
• What they say about themselves in registration data
• Which search terms they use
• What IP data indicates about them, including geography, SIC code, Fortune 500 rank, specific Internet domains,  and more
Because AudienceScience processes so many indicators of intent, it enables you to create precisely targeted audience segments for advertisers.” And Google, which knows that the UK is “arguably the most advanced online marketplace in the world” has carefully explained to its UK customers all the data they collect and make available for powerful online targeting.
The Notice, Choice and Education “Good Practice” scheme relies on an ineffective opt-out. Instead of real disclosure and consumer/citizen control, we have a band-aid approach to privacy online. The IAB also resorts to a disingenuous scare tactic when it suggests that without online marketing, the ability of the Internet to provide “content online for free” would be harmed. No one has said there shouldn’t be advertising–what’s been said is that it must be done in a way which respects privacy, the citizen, and the consumer.  Clearly, the new IAB/UK code isn’t a model that can be relied on to protect the public. UK regulators must play a more proactive role to ensure privacy and consumer welfare online is meaningfully protected.
The debate over behavioural targeting, profiling and interactive advertising is heating up in the European Union. We just spoke at a EU event on the topic. More later on that meeting (which featured Google, Microsoft, Nokia and others, all wearing their Brussels best). Google and others pointed to a new code on behavioural targeting created by the UK’s Interactive Ad Bureau, which they suggest is a model (and is designed to foreclose on real privacy safeguards). I will be writing about this code in the next post. But here’s what the chairman of the IAB UK, Richard Eyre, said about protecting privacy online and the Internet’s future [via Brand Republic. March 31, 2009]. Excerpts:
Richard Eyre, chairman of the Internet Advertising Bureau, has said he accepts the European Union’s decision to investigate behavioural targeting as “logical” but hopes that the current self-regulatory process “will satisfy everyone”.
excerpt from online marketing blog [our bold]:
The Benefits of Facebook Connect
For marketers:
First, it facilitates getting mentioned in Facebook users’s news feeds, which has been the holy grail for marketers because it raises awareness of your business and delivers an implied endorsement.
Second, it provides a treasure trove of user data, allowing über-targeting. You can literally customize the content of your page based on the visitor’s Facebook data, such as his age, gender, location, likes, dislikes, relationship status, even networks, groups, and pages he’s joined – or “fanned.†As a simple example, if you know a visitor is a fan of the band U2, you can highlight your U2-theme stationery, T-shirts, dog bones.
The Wall Street Journal and other publications report that Google and ad giant WPP will announce today the $4.6 million grants it will award for academic research designed to “improve understanding and practices in online marketing, and to better understand the relationship between online and offline media.” Among the research efforts given funds are projects that will “analyze internet users’ surfing habits to determine their thinking styles, such as whether they are most influenced by verbal or visual messages or if they are more holistic or analytical, and how to tailor ads accordingly” and an “analysis into how online ads effect blood flow to different areas of the brain. This research would seek to show the role that emotions play in decision making.” Â Academics from MIT, Stanford, and Harvard will receive funds, among others. (And for those of us concerned about the role online advertising and data collection is playing in China–and impacts human rights and environmental sustainability–one of the new grants will fund “how Chinese web users respond to different online-ad formats, such as display and search ads”).
As we will tell the European Commission at the end of the month, at a workshop they have organized to discuss interactive advertising and consumer protection, the evolving role of neuromarketing with online advertising raises a number of troubling concerns–and should trigger a serious policy review.  We have not yet seen a final list of the grantees. But Google should be funding independent research that will honestly explore the impact and ethics of online marketing. They should be ensuring that the ethical issues of online marketing–such as the concerns raised by their new behavioural profiling and targeting system–receive a honest scholarly review.
The growing controversy over the role pharmaceutical companies are playing with scholarly research on drugs, we think, has implications here. We believe all the academic institutions receiving these grants must vet them to ensure they truly address the real impact online ad techniques have on individuals and society.
Update: Google & WPP made the academic research announcement–eleven grants awarded. Here are some to ponder–and raise questions:
* “Targeting Ads to Match Individual Cognitive Styles: A Market Testâ€; Glen Urban, Professor, MIT Sloan School of Management;
* “How do consumers determine what is relevant? A psychometric and neuroscientific study of online search and advertising effectivenessâ€; Antoine Bechara, Professor of Psychology and Neuroscience, Department of Psychology/Brain & Creativity Institute, University of Southern California and Martin Reimann, Fellow, Department of Psychology/Brain & Creativity, University of Southern California;
*“Unpuzzling the Synergy of Display and Search Advertising:Insights from Data Mining of Chinese Internet Usersâ€; Hairong Li, Department of Advertising, Public Relations, and Retailing, Michigan State University and Shuguang Zhao, Media Survey Lab, Tsinghua University;
*â€Are Brand Attitudes Contagious? Consumer Response to Organic Search Trendsâ€; Donna L. Hoffman, Professor, A. Gary Anderson Graduate School of Management, University of California Riverside and Thomas P. Novak, A. Gary Anderson Graduate School of Management, University of California Riverside;
*“Marketing on the Map: Visual Search and Consumer Decision Makingâ€; Nicolas Lurie, Assistant Professor of Marketing, College of Management, Georgia Institute of Technology, College of Management and Sam Ransbotham, Assistant Professor of Information Systems, Carroll School of Management, Boston College.
Here’s an excerpt from what Google is telling its AdSense clients:
Advertisers spend more money on campaigns that reach the right audience; helping them do that should drive more revenue to your websites. This week we’re announcing plans to provide interest-based advertising across AdSense publisher sites…With this enhancement they’ll also be able to reach users based on their previous interactions with them, such as visits to the advertiser website, as well as reach users on the basis of their interests (such as “sports enthusiasts” or “travel enthusiasts”)…To develop interest categories, we’ll recognize the types of webpages users visit across the AdSense network. As an example, if they visit a number of sports pages, we’ll add them to the “sports enthusiast” interest category.
Google has finally fully entered the behavioral targeting business, although they are trying to disguise it through an Orwellian change of language by calling it “interest-based” advertising. The world’s largest and most dominant online ad system is expanding its data collection and targeting activities whenever we search, view videos or read blogs. This isn’t really about, as Google’s blog suggests, “more interesting” ads for consumers. It’s about a further expansion of Google’s already considerable data-mining and interactive marketing and data-tracking/targeting arsenal, which now also includes using neuroscience for its YouTube ads. Google is further endorsing a global culture with data collection, profiling and targeting at its core. No matter how Google attempts to frame it as “better for you ads,” digital advertising is designed to influence our behaviors in non-transparent ways.
This announcement, which was done so Google can better incorporate all the behavioral targeting technologies it acquired when it bought online ad targeting giant DoubleClick, is also designed to help head-off the enactment of privacy laws in the US and EU (Google isn’t alone here. Microsoft, Yahoo and others are in a global race in attempt to preserve the data collection status quo under the cover of industry self-regulation). Giving consumers access to their (incomplete and likely to constantly be revised with even more targeting categories) profile has to be viewed with such a perspective–it serves as a smokescreen so Google can broaden its data collection and targeting (and become even more dominant in the global online ad business). Instead of having the default be no data collection without prior expressed informed consent, Google has created the system as an flawed opt-out. Missing from what users should know and control in their profile are the applications online marketers use to develop the ad so it can more effectively target (and collect data), including: neuromarketing, viral videos, rich immersive media, social networks, online product placement, etc.
Yesterday, Google should have called on Congress, the EU and other governments to enact meaningful consumer privacy safeguards. While it is entirely to be expected that as the world’s largest online ad company Google would fully embrace behavioral targeting, it’s also unfortunate. Eventually–and we hope soon–responsible shareholders, such as socially conscious investment funds, and global regulators will hold Google–and other online marketers–more accountable to the public.
But stay tuned for the next entry, on what Google, Microsoft and Yahoo have done to evade privacy safeguards for behavioural targeting in the UK!
TRUSTe, a group which has helped industry stave off regulatory privacy safeguards, released a survey today that–surprise!–says people really aren’t that concerned about behavioral targeting. We have reviewed the survey questions they asked–and they failed to really inform those interviewed about how behavioral targeting truly works (including the context for interactive advertising).
This kind of research raises questions about TRUSTe’s ability to engage in serious scholarship. If they are going to conduct any future research, they need to engage the services of independent academic experts with a knowledge of the field, and who aren’t connected to industry.
The so-called survey released today has to be viewed as part of the online ad lobby effort to ward off federal and state consumer protection/privacy rules.