Baby Steps for Online Privacy: Why the FTC Self-Regulatory Principles For Online Behavioral Advertising Fails to Protect the Public

Statement of Jeff Chester, Exec. Director, Center for Digital Democracy:

The Federal Trade Commission is supposed to serve as the nation’s leading consumer protection agency.  But for too long it has buried its mandate in the `digital’ sand, as far as ensuring U.S. consumer privacy is protected online.    The commission embraced a narrow intellectual framework as it examined online marketing and data collection for this proceeding.  Since 2001, the Bush FTC has made industry self-regulation for privacy and online marketing the only acceptable approach when considering any policy safeguards (although the Clinton FTC was also inadequate in this regard as well).  Consequently, FTC staff—placed in a sort of intellectual straitjacket—was hampered in their efforts to propose meaningful safeguards.

Advertisers and marketers have developed an array of sophisticated and ever-evolving data collection and profiling applications, honed from the latest developments in such fields as semantics, artificial intelligence, auction theory, social network analysis, data-mining, and statistical modeling.  Unknown to many members of the public, a vast commercial surveillance system is at the core of most search engines, online video channels, videogames, mobile services and social networks.  We are being digitally shadowed across the online medium, our actions monitored and analyzed.

Behavioral targeting (BT), the online marketing technique that analyzes how an individual user acts online so they can be sent more precise marketing messages, is just one tool in the interactive advertisers’ arsenal.  Today, we are witnessing a dramatic growth in the capabilities of marketers to track and assess our activities and communication habits on the Internet.  Social media monitoring, so-called “rich-media” immersive marketing, new forms of viral and virtual advertising and product placement, and a renewed interest (and growing investment in) neuromarketing, all contribute to the panoply of approaches that also includes BT.  Behavioral targeting itself has also grown more complex.  That modest little “cookie” data file on our browsers, which created the potential for behavioral ads, now permits a more diverse set of approaches for delivering targeted advertising.

We don’t believe that the FTC has sufficiently analyzed the current state of interactive marketing and data collection.  Otherwise, it would have been able to articulate a better definition of behavioral targeting that would illustrate why legislative safeguards are now required.  It should have not exempted “First Party” sites from the Principles; users need to know and approve what kinds of data collection for targeting are being done at that specific online location.

The commission should have created specific policies for so-called sensitive data, especially in the financial, health, and children/adolescent area.  By urging a conversation between industry and consumer groups to “develop more specific standards,” the commission has effectively and needlessly delayed the enactment of meaningful safeguards.

On the positive side, the FTC has finally recognized that given today’s contemporary marketing practices, the distinction between so-called personally identifiable information (PII) and non-PII is no longer relevant.  The commission is finally catching up with the work of the Article 29 Working Party in the EU (the organization of privacy commissioners from member states), which has made significant advances in this area.

We acknowledge that many on the FTC staff worked diligently to develop these principles.  We personally thank them for their commitment to the public interest.  Both Commissioners Leibowitz and Harbour played especially critical roles by supporting a serious examination of these issues.  We urge everyone to review their separate statements issued today.  Today’s release of the privacy principles continues the conversation.  But meaningful action is required.  We cannot leave the American public—now pressed by all manner of financial and other pressures—to remain vulnerable to the data collection and targeting lures of interactive marketing.

Is the White House Collecting Data on the Public via YouTube?

According to CNET, the White House has again changed its privacy policy regarding persistent cookies and online videos.  Now all video providers, it appears–not just YouTube–has received a formal exemption of the federal prohibition on persistent cookies.

But beyond the cookie issue–which shouldn’t be placed at all when the public watches a government video–are questions regarding statistical and tracking data.  Is Google/YouTube providing the White House with any analytics and user information [such as through YouTube Insight]?  For example, YouTube allows “brand channels” to know “the gender and age” of viewers; “identify the ways…users find your videos;” “Hot spots viewing information, which identifies viewing trends  for each moment in a video.” YouTube also permits brand channel video providers to track users via a “one 1px by 1px third-party tracking tag, which lets the channel owners use view-through tracking to better understand a user’s behavior after the user leaves the channel page.”

We assume the White House will answer such questions (such as whether they receive brand channel-like services), respond favorably to the FOIA request from Chris Soghoian, and ensure that the site reflects the highest possible consumer privacy standards.

Google’s “Biometric” Research: Ads on YouTube Give “Halo Effect” to Brands

Google suited up people with special biometric monitoring equipment to test how well YouTube ads affect them.  According to New Media Age [excerpt]: “YouTube users are 1.5 times more attentive and engaged in advertising than TV viewers, according to research conducted in partnership with General Motors Europe, Motorola, media agency MindShare and the Online Testing Exchange (OTX).  The research used eye tracking and biometric data to reveal the brand impact of advertising on YouTube. It found recall and attribution for an ad viewed was up to 14% higher than watching the same ad on TV. Viewing a silent ad on YouTube in addition to a normal TV ad also improved ad recall and attribution.

Ads on YouTube can impact the perceptions of elusive audiences like young men and infrequent TV viewers. They also have a halo effect and increase brand perceptions such as innovative, cool, dynamic and unconventional.”

Google measured such metrics as heart rate, physical movement, respiration rate, and skin conductance.

NMA: Ads on YouTube have higher impact than on TV.  Danielle Long.  NMA. December 18, 2008 [sub. required]

Commercial Domestic Surveillance: The new White House Website, YouTube & Privacy

In a post for CNET yesterday, privacy expert Chris Soghoian revealed that President Obama’s White House “has quietly exempted YouTube from strict rules relating to the use of cookies on federal agency Web sites.”   Federal rules prohibit the use of what are called “persistent cookies,” that can track an online users activities and behavior.  Soghoian cites the new White House privacy policy that states, “A waiver has been issued by the White House Counsel’s office to allow for the use of this persistent cookie.”  Google’s YouTube received this exemption, notes the White House site, “to help maintain the integrity of video statistics.”

Now the White House has made a quick change, according to a post written today by Soghoian.  “Obama’s web team rolled out a technical fix that severely limits YouTube’s ability to track most visitors to the White House website,” he writes. “By late Thursday evening, each embedded YouTube video had been replaced with an image of a video player, which a user must click on before the real YouTube player will be loaded. The result of this change is that YouTube is now only able to use cookies to track users who click on the “play” button on an embedded YouTube video — the majority of people who scroll through a page without clicking play will not be tracked.”  But he also describes the new approach as a “band-aid. Those users who do click the play button will be secretly tracked as they navigate the White House website — and if those users have visited YouTube or any other Google run website in the past, the fact that they watched an Obama video will be added to the existing massive pile of data the company has compiled on each web surfer.”

But for those White House web site visitors who do click on the YouTube videos, they will likely become part of the data analysis which could be generated via Google’s YouTube Insight.  That’s a video analytics tool providing “detailed statistics” on video use.  One Google executive offered a commercial example of the tools’ features: “YouTube’s geographical insights could help marketers determine ad effectiveness and campaign optimization. For instance, he said, different versions of a movie trailer might perform better in different regions.”  Other YouTube analytical data available  includes a “demographics tab that displays view count information broken down by age group (such as ages 18-24), gender, or a combination of the two, to help you get a better understanding of the makeup of your YouTube audience. We show you general information about your viewers in anonymous and aggregate form, based on the birth date and gender information that users share with us when they create YouTube accounts.”  (Google says “individual users can’t be personally identified.”  But the company has embraced a narrow definition of what privacy protections users should expect, the so-called APEC standard).

Persistent cookies, explains U.S. Military Academy computer science professor Greg Conti, “can exist for many years…repeatedly identifying the user to the issuing web site…persistent cookies are specifically designed to uniquely identify users on return visits to web sites…In terms of anonymity, this is bad.  Advertisers have found innovative ways to exploit cookies to track users as they visit web sites that contain ads or other content.”  [source is Professor Conti’s terrific book, Googling Security:  How Much Does Google Know About You?  Addison-Wesley.  2009.  Page 73]

Of course, Google/YouTube’s cookie placed via a White House visit sets the stage for the company to further track and analyze citizens/ users.  Given YouTube’s ever-growing expansion as a commercial video advertising service, its ability to harness the White House data cookie will undoubtedly prove useful for the company.

The revised White House privacy policy does offer users a way to view the videos “without the use of persistent cookies” through the extra step of clicking the “link to download the video file… provided just below the video.” But we think opt-out is the incorrect approach.

The Obama White House should set the standard for protecting privacy in the digital era.  They should maintain the prohibition on persistent tracking cookies.  Nor should they permit any commercial operator, including Google’s YouTube, to engage in federally-sanctioned data collection.  We know the new Obama Administration has many important issues to address.  But they also need to develop a sophisticated critique of the online advertising industry, ensuring privacy and consumer protection.  The Obama Administration should be able to articulate a balanced perspective– that can take advantage and foster the democratic potential of digital media, while also meaningfully addressing the harms.

Google Lobbying: Why Congress Should Not Use the new YouTube Senate and House Video Hubs

Google is taking a lobbying tactic developed in part by CSPAN years ago–offer members of Congress a free service so they can be seen by the public.  That kind of electronic or digital campaign contribution helps insure that Congress will think twice about biting (or regulating) the video hand that feeds.  Google’s new YouTube Senate and House Hub channels raise a number of concerns and policy questions.

For example, what happens to the user data as people click on the Congressional YouTube channels?  Does Google get to collect, analyze and use such data for its growing political online advertising business?  Beyond privacy, should Congress be endorsing a private for-profit venture as the principal access point voters and constituents need to use?  Does the use of YouTube create a potential conflict of interest for members of Congress who will need to regulate Google–on such things as competition (the DoJ recently described Google as a monopoly); privacy, consumer protection, etc (remember, Google sells all kinds of ads for mortgages, credit cards, junk food, health remedies, etc.).

It’s not a coincidence perhaps that Google’s YouTube congressional channel announcement comes at the same time the company is expanding its online ad business for politics.  As Ad Age reports this week,“The end of an election season usually means dismantling the campaign apparatus until the next cycle. But not at Google; not this year…Rather than packing it all away until 2010, it’s hoping to build a year-round political-advertising business one House seat and hot-button issue at a time.  “There are 500,000 elected officials in the U.S. With the advances we’ve made in geo-targeting, we think this will be part of every political campaign in the country, as well as issue campaigns,” said Peter Greenberger, Google’s director of election and issue advocacy…Google doesn’t yet offer targeting based on congressional districts, but with ZIP code and city targeting, politicians and advocacy groups can cobble together a reasonable approximation of a congressional district.”

The in-coming Obama Administration has had the support of Google’s CEO, and company officials have played a role in the transition.  But the new administration should develop a digital outreach approach to the public which is public–and non-commercial–in nature.  It shouldn’t show any favoritism, even if Google is the leading search and video service.  It should be a a government via dot com.

see: “Election  is Over, but Google Still Chasing Political Spending.”  Michael Learmonth.  Advertising Age.  January 12, 2009.

The “Revised” Network Advertising Initiative Principles: Ghost-written by Bernard Madoff?

That was really what we felt reading the “NAI Response to Public Comments” released yesterday.  It accompanied the 2008 principles announcement by the self-regulatory trade online marketing trade group.  The “response” is worth reading, because it really reveals the inability of the group to meaningfully address how to protect consumers online.  You would think that an organization which has Microsoft, Google, Yahoo, Time Warner and many others as paying members could at least clearly state what happens to our data in the online marketing process.  But the real goal of the NAI is to prevent the enactment of serious state and federal privacy policies that would protect consumers. My group put out a statement yesterday discussing the new principles.

The credibility of Google, Microsoft, Yahoo and Time Warner are at stake.  They should be able to ensure that their own organization can honestly address the implications of online advertising.  But it’s time to abandon any call for self-regulation.  That has been a failure.  It’s clear that a growing number of consumer and privacy groups are calling for a legislative solution, as well as a more effective FTC.  Responsible online ad companies will support such regulation.

Vint Cerf, “Chief Internet Evangelist,” Touts Google’s Brand Building Potential

Everyone, it appears, is expected to help Google sell its advertising and brand-building services to new clients. Even when they have the title as a “father” of the Internet. See this video interview of Vint Cerf from a May 2008 event in Singapore. It illuminates a number of Google’s advertising and marketing strategies, including using the power of social media to “virally” promote brands. Here’s a transcript:

“Ogilvy Insights: How can brands tap into the social media phenomenon? An Ogilvy interview with Vinton G. Cerf, Google’s VP & Chief Internet Evangelist. Thursday 22 May, 2008 – Singapore.

Vinton G. Cerf: “Ok, so here’s an interesting phenomenon: We know that you don’t read every book that’s published, you don’t see every movie that’s produced, you don’t watch every television program and every radio program. Something is helping you decide what to look at, what to read.

Part of that something, we’ll call advertising information. And I want to make sure that we recognize that this is information. We call it advertising when we’re not interested in it. When we’re interested in it, it’s information. What Google wants to do is to make sure that the information that you get, that comes from advertising sources, is interesting to you, not disinteresting.

And so let’s think now as a brand; the brand thinker says “well, I need to get in front of as many people as possible so they are aware of my existence and why my products and services should be attractive to them. But the way people filter their interests is to listen to what other people have to say – their friends, their families, their teachers and so on. So we need to take advantage of that filtering mechanism. One way to do that is to make sure that those people whose opinion you listen to, that tell you what movies to watch, what books to read or what products to buy, know about my brand. Now, how to I go about doing that? Well one way is to do the traditional way of somehow plastering your logo up everywhere you possibly can, but that’s a shock dam… (not sure what he says here)

The more interesting this to do is to get your brand in front of someone who has some authority and interest in the products and services associated with that brand, so that person now becomes an anchor and whose opinion now counts in his or her circle of friends. So we now need to identify which people are the opinion makers in these various social groupings.

How can we do that? Well, Google in a way has a tool which helps us do that. Because the way we present advertising information is to put it up only if we think it is really of interest to that party. And in fact the thing that makes our advertising mechanism so valuable is that we are pretty good at getting an ad that someone will click on in front of that person. Their interest level is indicated by the fact that they clicked on the ad. I’m not gonna click on an ad I’m not interested in, that’s advertising. If I click on it, it’s information. So we have a built in filter to find the people who are interested in this particular brand or in the products associated with it.

So now what we need to do is to help the person who clicked on that ad, become an opinion maker. And one way to do that is to say; “Well, that if that person is part of a social network, then the fact that they clicked on the ad gives me an opportunity to give them a tool for making their interest in my brand known to their friends”. So when you look at OpenSocial, you discover mechanisms in there that allow people to tell their friends or draw attention to their friends to things that they have seen that they think their friends would be interested in. So the more that we can facilitate that communication, the more powerful this particular method of spreading knowledge of brands is gonna be.”

Google Expanding Video “Metrics” for Brands and Ad Agencies to help “Monetize” YouTube

From the UK’s New Media Age [excerpt]: “Google is the latest company to put its weight behind developing video ad metrics as part of its increased push to monetise its video properties, particularly YouTube.

nma can reveal the search giant is developing a planning tool for video ads to help brands and agencies understand before a campaign launches how effective it will be.

Likewise, it has also completed a project with research and consulting firm OTX that included looking at how to define consumer engagement withYouTube video ads…Additionally, it has ramped up work with its in-house rich-media specialist Tangozebra to develop new ad formats alongside external agencies and clients, while it’s also funding joint research projects with agencies to understand how web users are consuming online video.

The latter will focus on developing ad metrics for agencies and brands to better understand the impact of online video and rich-media ads, on top of analytics already provided by Google Insight. Jonathan Gillespie, Google head of media solutions and YouTube in the UK, said the research has a particular leaning towards planning tools.

“The whole point of doing this research is to fill a gap in our requirements,” he said. “The internet as a whole has been very good at delivering metrics after the effect. However, the front end and planning are things the internet hasn’t been particularly brilliant at.

“Therefore we’re developing a planning tool that will determine how we can best target audiences for advertisers on video while maintaining a good consumer experience,” Gillespie added.

source: “Google develops video ad planning tool to give insight.” Will Cooper. NMA. Nov. 6, 2008 [sub. required].

Google’s “Policy Fellowships”–Self-Serving Efforts to Help Ward Off Privacy and Online Marketing Protections?

Google has selected 15 organizations for its 2009 “Google Policy Fellowship.” Fellows are funded by Google and will work on “Internet and technology policy” issues over the summer. Take a look at some of the groups it selected and what they say the projects will be (and their positions on Internet issues). And then ask–is Google working to help undermine the public interest in communications policy? Think online privacy and interactive marketing as you read these following excerpts from a number of these groups:

“The Competitive Enterprise Institute is a 501(c)(3) non-profit public interest organization dedicated to advancing the principles of free enterprise and limited government. We believe that individuals are best helped not by government intervention, but by making their own choices in a free marketplace…Electronic privacy: CEI seeks to reframe the online privacy debate in terms of the potential benefits to consumers of greater information sharing, transparency, and marketing. Fellows will explore competing privacy policies and how they are evolving as the public grows more aware of privacy risks. This research will also encompass privacy-enhancing technologies that empower consumers to safeguard personal data on an individualized basis.”

“The Progress & Freedom Foundation (PFF) is a market-oriented think tank that studies the digital revolution and its implications for public policy… Online Advertising & Privacy Policy Issues: PFF defends online advertising as the lifeblood of online content and services, particularly for the “long tail,” and emphasizes a layered approach to privacy protection, including technological self-help, user education, industry self-regulation, and enforcement of existing laws, as a less restrictive—and generally more effective—alternative to increased regulation.”

“The Technology Policy Institute is a think tank that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world… Privacy and data security: benefits and costs to consumers of online information flows, and the effects of alternative privacy policies on consumers and the development of the Internet.”

“The Cato Institute’s research on telecommunications and information policy advances the Institute’s vision of free minds and free markets within the information policy, information technology, and telecommunications sectors of the American economy…Information Policy: Examining how increased data sensing, storage, transfer, processing, and use affect human values like privacy, fairness and Due Process, personal security, and seclusion. Articulating complex technological, social, and legal issues in ordinary language. Promoting the policies that protect these human values consistent with a free society and maximal human liberty.”

Google is also funding fellowships at other groups, including the partially Google funded Center for Democracy and Technology. The CDT connected Internet Education Foundation (which helps run the Congressional Internet Caucus, where Google is a corporate Advisory member) also will house a Google Fellow. There are a few public interest groups hosting Fellows that have an independent track record, including Media Access Project, EFF, and Public Knowledge. But awarding Fellowships to groups which will help it fight off responsible privacy and online marketing safeguards provides another insight into Google’s own political agenda.

Google’s YouTube– New Sponsored Search for Advertisers

The world’s most powerful search engine and online ad company has introduced a new feature on YouTube. Here’s an excerpt from the AP story: “… YouTube is letting advertisers promote their commercial clips alongside the search results at the Internet’s most popular video site… advertisers can now tie their commercials to specific words entered into YouTube’s search box…Some clips that might not rank high in the primary results of a YouTube search theoretically could appear on the first page as a “sponsored” video if a bidder is willing to pay a high enough price for a click and offers compelling content.”

source: YouTube channels Google with search-driven ads. Michael Liedtke. AP. November 12, 2008.