The advertising industry is engaged in a growing research effort to push the boundaries of marketing. It wishes, for example, to reach deeply into our unconscious mind in order to generate a range of behavioral responses. Marketers are exploring how the new tools of digital advertising can influence consumer emotions.
For example, Google is now engaged in consumer neuroscience research to make its YouTube ads more effective. But Google wants more academic help so it can improve its digital marketing prowess. So Google and global ad giant WPP have joined forces to create “a new research program to improve understanding and practices in online marketing, and to better understand the relationship between online and offline media.” The program will be run by a trio of scholars, including Google’s own Hal Varian, Professor John Quelch, senior associate dean of Harvard Business School (who is a a non-executive director of WPP), and Professor Glen Urban, former dean of the Sloan School of Management at the Massachusetts Institute of Technology. Varian told DM News that â€œWe want to encourage more research about how online and offline media work together to influence consumer choices. We think that such research will contribute to more effective and more measurable advertising performance.â€ DM News also reported that Mark Read, CEO of WPP Digital and WPP’s director of strategy explained that â€œ[T]he industry, our clients and our companies will benefit from the application of some of the world’s finest academic research minds into how online media influences consumers.”
Don’t expect, by the way, any grants to be awarded that examine the ethical dimensions of interactive marketing; or new threats to personal privacy and autonomy; the implications of Google’s growing global control over online ad revenues on publishing; or the negative environmental and social consequences of promoting a digital marketing system which could lead to over-consumption.
Here are some of the research questions Google hopes will draw academics into its program:
- How does a brand establish a framework for assessing how much should be spent online? How much advertising should be directed at brand development versus specific click generation?…
- How do you set digital advertising budgets and tactics when in intensively competitive product categories?…
- What are good guidelines for moving traditional video spots from broadcast to broadband?
- What is the causal relationship between brand health and search success? And what is the link between search and sales? How does search contribute to word of mouth recommendation?
- How can banner ads be more effective?
- How do you model the consumer response to digital advertising in social networks or mobile media?
- What do we know and what more do we need to know about on-line audiences?
- How can advertisers be welcome in social networks?
- Recipients will be invited to attend a conference in Fall 2009 (Sept/Oct) where they can share their preliminary findings.
Ad Age reports that Google sales exec Tim Armstrong “is calling for a town hall meeting with the Association of National Advertisers.” [sub. may be required]. The ad association has come out against the proposed Google/Yahoo search ad combine. But such a meeting shouldn’t be a closed door `only the ad biz’ event. By now, Google’s key execs should recognize that the search and online ad market is connected to such issues as privacy, the state of competition, and the future of funding diverse content online. This isn’t an issue that should be constructed by Google as an insider deal. The full range of public policy issues must be debated–including the participation of independent advocates and academic experts to discuss privacy and related concerns. Let Google, the advertisers, critics, supporters, and those in-between have their say–and make it available prominently on YouTube.
The Network Advertising Initiative’s (NAI) real role is to protect the ability of its members (Google, Yahoo!, AOL, etc.) to collect huge amounts of profiling and targeting data from each of us. NAI claims it’s promoting self-regulation on data privacy through its principles and guidelines. But NAI has long been a toothless group, and is basically a public relations vehicle helping to cover the data crime and more-than-misdemeanors of the industry.
So it’s not surprising that last week, the NAI announced that while it supported an “opt-in” for the kind of behavioral targeting planned by the phone and cable companies, it didn’t believe such a safeguard was required for its data-collected membership. In a statement, NAI Executive Director Trevor Hughes said that his group “believes that opt-out continues to be an appropriate choice mechanism for traditional web-based behavioral advertising and this is part of our sliding scale framework.” That’s the political position taken, of course, by his members. They are the biggest behavioral targeters on the planet.
The NAI is a weak group which reflects the cynical view of the online ad industry.Â NAI members hope that they can fool policymakers into believing consumer privacy can be safeguarded by the data wolves running the privacy hen house. The battle lines for the next Congress, the FTC and FCC are being drawn. Opt-out is a feckless approach to digital ad privacy. Responsible companies should be in the lead calling for meaningful opt-in. Note to NAI members:Â Deregulation and industry self-governance–how shall I put it–doesn’t seem to have worked that well so far!
It’s too disquieting a time in the U.S. to dismiss what a lobbyist for the Interactive Advertising Bureau said as merely silly. The IAB lobbyist is quoted in today’s Washington Post saying: “If Congress required ‘opt in’ today, Congress would be back in tomorrow writing an Internet bailout bill. Every advertising platform and business model would be put at risk.” [reg. required]
Why is the IAB afraid of honest consumer disclosure and consumer control? If online ad leaders can’t imagine a world where the industry still makes lots of money–while simultaneously respecting consumer privacy–perhaps they should choose another profession (say investment banking!).
Seriously, online ad leaders need to acknowledge that reasonable federal rules are required that safeguard consumers (with meaningful policies especially protecting children and adolescents, as well as adult financial, health, and political data). The industry doesn’t need a bail-out. But its leaders should `opt-in’ to a responsible position for online consumer privacy protection.
NPR’s On the Media co-host and Ad Age columnist Bob Garfield provides policymakers and advocates with an arsenal of new material that support the passage of digital age consumer protection laws. In his Ad Age essay [“Your Data With Destiny.” sub required], Garfield has this incredibly revealing–and disturbing–quote from behavioral targeting industry leader Dave Morgan (Tacoda) [our emphasis]:
“Now we have the ability to automate serendipity,” says Dave Morgan, founder of Tacoda, the behavioral-marketing firm sold to AOL in 2007 for a reported $275 million. “Consumers may know things they think they want, but they don’t know for sure what they might want.”
Garfield writes that “In 2006 Tacoda did a project for Panasonic in which it scrutinized the online behavior of millions of internet users — not a sample of 1,200 subjects to project a result against the whole population within a statistical margin of error; this was actual millions. Then it broke down that population’s surfing behavior according to 400-some criteria: media choices, last site visited, search terms, etc. It then ranked all of those behaviors according to correlation with flat-screen-TV purchase…“We no longer have to rely on old cultural prophecies as to who is the right consumer for the right message,” Morgan says. “It no longer has to be microsample-based [Ã la Nielsen or Simmons]. We now have [total-population] data, and that changes everything. With [those] data, you can know essentially everything. You can find out all the things that are nonintuitive or counterintuitive that are excellent predictors. … There’s a lot of power in that.”
There’s more in the piece, including what eBay is doing. As the annual Advertising Week fest begins in New York, we hope the leaders of the ad industry will take time to reflect on what they are creating. You cannot have a largely invisible system which tracks and analyzes our online and interactive behaviors and relationships, and then engages in all manner of stealth efforts to get individuals (including adolescents and kids) to act, think or feel in some desired way. Such a system requires rules which make the transaction entirely transparent and controlled by the individual. The ad industry must show some responsibility here.
That’s from a story written by Silicon Alley Insider. As YouTube further transforms into more of a deep-pocketed brand friendly online video service, it will be important to identify how it tries to better serve advertisers (via data collection, targeting, placement, etc.). Here’s an excerpt from the story [our emphasis]:
“Take a good, long look at YouTube’s homepage. You may not recognize it soon…Advertising sources say YouTube is revamping the homepage to accommodate a huge new banner ad that will span the entire width of the page. The ad will [sic] is roughly the same height as the current video ad unit on the upper right of the page, and designed to accommodate high-definition video… Sources who have seen the unit describe it having multiple tabs that activate when rolled over by a cursor.
YouTube is …offering inaugural sponsors a deal to buy the new unit for roughly the same price as the old, or about $200,000 a day… Industry observers think that News. Corp.’s MySpace is getting more than a $1 million for takeover ads on its homepage.”
source: “YouTube Finally Figures Out How To Make Money: Big Ads On Its Homepage.” Michael Learmonth. Silicon Alley Insider. August 28, 2008
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.
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.
The stories on a judge’s order for Google to turn-over to Viacom data on YouTube users have largely ignored a key issue: why is Google–and almost every other leading broadband video provider tracking and analyzing our online viewing habits. It’s because–like with broadband generally and with television–the goal is to know exactly what we are viewing in order to better target us with advertising. In the case of broadband video, whether it is YouTube, Hulu, or Joost, for example, it’s about tracking our viewing so well we can be micro-targeted.
Google sees huge profits for YouTube doing this. They now call YouTube a “next-generation advertising platform,” something we think reflects how they really view the service. Google is pitching the branding and sellling of YouTube to advertisers. Google is now tracking YouTube views as it promotes to advertisers a scheme to take advantage of the “viral” marketing capabilities of YouTube. Finally, it’s also useful to consider how Google’s recently acquired DoubleClick also has a product tracking and analyzing broadband video. Users and policymakers should expect their online viewing will be private–and not to be spied upon. Whether by Viacom, the government, or Google itself.
Just a friendly reminder that the new media world is here–and that it should be the primary focus of public interest communications policy strategies. Via Variety (excerpt):
More signs of the Internet apocalypse for TV’s old guard: U.S. Web surfers viewed some 11 billion online videos in April, a gain of 33% from the same month last year.
According to just-released Web traffic stats from comScore, the most ominous stat is how ardently the next generation has taken to watching video on the Internet.
Online vid viewing is highest among 18- 34-year-olds, who averaged 287 minutes in April…And make no mistake, YouTube is CBS, NBC, ABC and Fox combined on the Internet.”
source: Net traffic signs suggest TV offramp: Web surfers ride YouTube, MySpace wave. Cynthia Littleton. Variety. June 23-29 2008 [print edition. sub required].