I co-authored a report released yesterday. For those concerned about the obesity crisis, it’s a useful resource. It also offers a good overview about the forces shaping the global media system. It’s available here.
Month: May 2007
Regulators Must Stop Microsoft/aQuantive as well as GoogleClick
Todayâ€™s announcement that Microsoft is swallowing the immense aQuantive digital marketing apparatus is no surprise. Having lost the leading third-party online display giant Doubleclick to its archrival Google, Microsoft is desperate to remain relevant in online marketing. The $6b acquisition of aQuantive provides Microsoft and its adCenter platform with the digital marketing clout of Atlas. Atlas products include services designed to super-charge brand-marketing friendly ads utilizing rich media, broadband video, search, etc.
The deal is more proof that the FTC better wake-up and do something about the consolidation of the online advertising market. That agency canâ€™t address the hypocrisy though of Microsoft lobbyists. They have beseeched advocates, including this blogger, to stop the Google-Doubleclick merger. All along we knew that Microsoft was desperately seeking a deal, including with Yahoo!
We will discuss the deal later in this column. But it underscores what weâ€™ve been saying, including in our November 2006 complaint to the FTC. Thereâ€™s major and troubling consolidation occurring in the online ad market. If we want to see competition and content diversity thrive online, regulators need to act. Perhaps our friends in Europe at least will. They certainly need to examine the landscape over the last few weeks. Yahoo! acquires the remaining interest of Right Media for $680m; Time Warner’s AOL buys German-based adTech and Third Screen Media; and ad giant WPP snatches up 24/7 Real Media online ad firm for $649m. Something, we suggest, is going on. Is the FTC listening?
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Generation Digital: MIT Publishes Sample Chapters of New Book
Kathryn C. Montgomery new book–Generation Digital: Politics, Commerce, and Childhood in the Age of the Internet–will soon be in bookstores. MIT Press has just placed a sample chapter and other information online.
Disclosure: Kathy’s my wife. But nepotism aside, she is one of the most articulate and insightful writers about new media.
Microsoft and IM. Using “Cause Related Engagement” to Validate Interactive Advertising & Data Collection
A series of questions need to be broadly addressed about the proper dimensions for interactive digital marketing, including privacy, individual autonomy, economic fairness, and ecological balance. But some NGO’s (see list) are so so eager to partake of the interactive advertising spoils, they partner with (or permit) digital marketers to engage in practices which should be questioned–not condoned.
Take the “I’m Making a Difference” campaign from Microsoft. The company has tied-in its digital advertising campaigns with “cause” marketing efforts. As Microsoft marketer Mich Mathews explained this week at its Strategic Account Summit:
“…people are driven to get engaged in topics they feel very personally passionate about. So another path that we’ve been exploring is this thing called cause-related engagement. We’re using better technology in our communication services to help people speak up for social causes that they care about. What you’re seeing here, is a new initiative from Windows Live. We start a conversation using IM, Microsoft shares a portion of the program’s advertising revenue with some of the world’s most effective organizations that are dedicated to social causes.
With every instant message, customers help address the issues that they’re feeling most passionate about. It could be poverty, child protection, disease, environmental issues. All you have to do here is sign up and start an instant message conversation, then every ad you see in your message window contributes to the grand total that we’re going to send to the cause. This program is really inspiring people to get involved and make a difference.
Now, even though the campaign to date has largely been un-media, it’s already gone as great pass-along, which illustrates the power of mixing great content with a compelling cause. And in the first months we’ve had hundreds of thousands of new sign ups to Messenger and an increase in page views per user, which, of course, is great for our advertisers, and even greater news for those charities who are involved.”
But before charities and nonprofits agree to be involved with such efforts, they need to fully vet both the privacy issues and the overall impact digital marketing will have on society. If we are to have a global digital medium that fully supports a civil society, NGO’s must be leaders in shaping the new media environment. That means being conscious and responsible–and not just blithely accepting the money.
GoogleClick and Threats to Online Market Competition
excerpt from “Consolidation And The Shape of Online Publishing.” Online Media Daily
“With DoubleClick, Google not only bought an ad exchange opportunity, but the installed base of the two-pronged DART franchise – with its Publisher and Advertiser flavors. This move stretches the definition of the publisher role farther than ever before. Combining DART, an ad exchange, and Google’s heritage of advertiser direct creates a potentially frightening situation for agencies. Add to that Google’s entry to offline media, including TV, radio and print, and a rather sinister master plan begins to unfold.
The move is part of a trend toward giving the seller more power throughout the value chain. With 2006 revenues of $7.14 billion, Google already claims a quarter of the online ad revenue worldwide. Moving from search to display and the offline ad channels, it appears that Google is assembling the ultimate media one-stop-shop for advertisers – a Wal-Mart of Media, so to speak.
This gets even more intriguing when you consider why ad servers were developed initially: To manage and audit multiple advertisers… Now the auditor becomes the audited supplier.”
Amit Rahav. May 9, 2007
Microsoftâ€™s Vision for the Internetâ€™s Future: Not a Pretty Picture
â€œWe can tell you who sawâ€¦we let you target thatâ€¦we will let you serve that on daypartingâ€¦â€ Yusuf Mendi, Microsoftâ€™s Senior VP and â€œChief Advertising Strategistâ€ delivered such wordsâ€”and more— yesterday. We urge you to watch and listen to his presentation. One learns that Microsoft is willing to help its wealthiest customers to better â€œpopâ€ their brands. This includes helping them `knowâ€™ â€œwho the user is and target to the user.â€ Mendi told the group that he knows they donâ€™t want to target only â€œraw tonnage.â€ So, for Microsoft, the â€œquality of the userâ€ can be better defined by the â€œ25 behavioral segmentsâ€ that can be targeted to the â€œ280 million people who use Hotmailâ€ at least once a month. The 280 million Messenger users can be targeted with rich media marketing technologies that sense their mouse hovering and interacting with an ad. For Microsoft, the â€œend to end IP experienceâ€ is all about transforming the global digital platform into one powerful brandwashing system.
Mr. Mendi told the audience that Microsoft is â€œopen for businessâ€ to help â€œredefineâ€ the Internetâ€™s future. Such a futureâ€”given to us by Microsoft, Google, Yahoo!, major ad agencies and marketersâ€”raises a series of disturbing questions and should be a cause for alarm and debate. The foremost role for digital media should be to promote civil society (thatâ€™s not the â€œcauseâ€ marketing cases Microsoft and others have embraced as the â€œTrojan Horseâ€ to convince everyone to endorse the idea about data collection and targeted interactive marketing). Shaping the most powerful platforms so it can better collect our data and then drive our behaviors—without our full awareness and informed consentâ€”is not a responsible act. Thatâ€™s why itâ€™s time for a much more robust debate about where this is headedâ€”before itâ€™s too late.
We will be come back to Mr. Gates and the Summit.
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Consolidation in the Online Ad Market: Beware of the Consequences to Privacy, Competition & Content Creation
From AdWeek (excerpt): “Acquisitions last week by Yahoo and Microsoft are part of a wave of consolidations that industry insiders expect will eventually result in a handful of massive ad operating systems. The Internet giants, along with Google and other contenders, see an opportunity to get out in front of an expected flood of brand ad budgets online by offering one-stop systems to manage search, display, video and other campaign formats. These systems would fulfill a role similar to that of TV networks in the early days of broadcast, aggregating audiences that are spread across the Web, mobile and other channels. The Internet giants, along with Google and other contenders, see an opportunity to get out in front of an expected flood of brand ad budgets online by offering one-stop systems to manage search, display, video and other campaign formats…”There’s a bias toward big right now,” said David Kenny, CEO of Digitas, part of Publicis Groupe. “As large companies move to [Internet] brand advertising, video, mobile and social networking, scale matters…”
“We have a vision of a next-generation advertising platform,” said Joe Doran, general manager of Microsoft’s digital advertising solutions unit. “We think of this as one broad platform for all digital media.”
From: “The Big Just Got Bigger in Online Advertising.” Brian Morrissey. Ad Week. May 7, 2007.
Microsoft’s Mobile Marketing Data Ploy
Mobile marketing is the emerging threat to our privacy, with a range of behavioral targeting and other data collection techniques. While there are privacy problems throughout the field, we think Microsoft’s recent purchase of European-based ScreenTonic is a good example of what to expect. Europe is a prime mobile marketing testing ground. Here’s an excerpt from an interview conducted by Advertising Age with Joe Doran, general manager of Microsoft Digital Advertising Solutions:
“Ad Age: What kind of targeting data will Microsoft and ScreenTonic be able to offer marketers?
Mr. Doran: ScreenTonic does basic targeting based on handset by carrier and by the site [where the consumer is] actually at today. Based on information we can comb from the carrier and the operator, we could get enhanced data for advertiser, such as gender or geo-location. It’s probably not as robust as we would want it to be, but it’s as good as what everybody is doing in geo-based targeting on mobile advertising today….
Ad Age: How will mobile be sold and measured?
Mr. Doran: For display advertising — which is where ScreenTonic really fits — that will primarily be placed and sold on CPM [cost per thousand viewer] basis. There will be performance-based media just as there is all over digital marketing today…High content, highly contextually targeted, high value placements will drive high value CPMs.”
From: Microsoft Explains Mobile Ad Network Purchase.” Alice Z. Cuneo and Abbey Klaassen. Ad Age. May 4, 2007 (sub. required).
CDT Fails to `Get
At the recent Computers, Freedom and Privacy conference, I was on a panel about behavioral targeting organized by CDT. I was a last-minute panelist, placed on there by conference organizers who were uncomfortable about CDT’s plans for the event. CDT has blogged about the panel, suggesting much more needs to be known before the FTC acts. That’s hogwash. CDD and USPIRG have provided the FTC–and the public–with sufficient information for action. Clearly, CDT is playing its usual role helping the industry head-off any serious consequences for the systemic invasion of privacy which online marketing has unleashed.
Interestingly, at the event, lobbyists for several of the big data mining companies came up to me and asked what kinds of safeguards might work. They know that BT and what’s going on raises serious and disturbing issues related to privacy. That’s why privacy advocates have to really protect the public through policy safeguards asap.
PS: For CDT to suggest there was even a debate between the representative from the Interactive Advertising Bureau and myself does a disservice to readers. The IAB really could not offer any defense of the practice, except to say that without advertising most online content would no longer be “free.” As the lone privacy advocate on the panel, I provided examples–from industry documents–about how our privacy is threatened.
Regulators Need to Examine Yahoo! Takeover of Right Media
Just for the record. Yahoo!s acquisition for the rest of Right Media for $680 million is another reason why the Federal Trade Commission–and the Congress–must get a better understanding of the digital ad market. So-called “open exchanges” provide market power for companies such as Yahoo! and Google. The future of the interactive ad market will help determine diversity of content online (eventually on all platforms). The deal is part of the growing consolidation in the interactive ad market, something we formally complained to the FTC about in our filing last November (as part of CDD/PIRG privacy concerns). These exchanges ultimately are trading access to us, via our data. This acquisition–along with the penultimate merger between Google and Doubleclick–must undergo serious scrutiny from policymakers.