Can Social Media Find a Business Model That Protects Privacy?

It’s clear that many of those trying to monetize third-party applications are pushing the privacy envelope. For example, at yesterday’s “Social Media Business School” event in San Francisco, one panel on “Performance Advertising” discussed “[H]ow to turn clicks and leads and other forms of user response into cash.”

Social media leaders better change the ” P” in the acronym CPA (cost per action) to mean Privacy.

Report from the field–Social Media

In San Francisco, the talk about social media and advertising is all about bringing the power of “virality” to help sell movies, cars and the big brands. There’s an audience of eager, mostly under 30, developers who want to cash in and be part of the ad business.

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Will Al Gore’s Alliance for Climate Protection and its $300m ad budget address the role of advertising and the climate crisis?

We think there’s something ironic about the $300 million ad “We” campaign just launched by Al Gore and several environmental groups to address climate change. We agree that threats to the environment are grave, and require immediate action. But unless Gore’s ads also critique the growing challenge to the environment coming from the advertising industry itself, we doubt whether there will be meaningful change. Marketers are unleashing the most powerful techniques to encourage greater and greater personal consumption. Madison Avenue is expanding the boundaries of what marketing can do by creating what it calls its “Marketing and Media Ecosystem.” From behavioral targeting based on the collection and tracking of our online activities, to “immersive” branded virtual content, to “viral” campaigns using broadband videos, the ad industry has embarked on a full-court press to get the public to eat more junk food, buy more cars, charge more on credit cards and take out new loans, etc.

The campaign, according to press reports, is hoping to encourage “influentials” to press for laws and policies. It’s a noble effort, although is using the same techniques marketers have embraced to target teens and other opinion makers to get friends to buy or like brands and products (called “brand ambassadors” by some). The Gore campaign should include a serious call for the public to be concerned about the consequences from the global and digitally-driven interactive marketing machine. Among the policies it should ask its influentials to support, are safeguards protecting consumer privacy and ensuring that marketing in the digital “ecosystem” is done in a way that truly supports an earth in balance.

PS: Before any of the $300 million is given to buy time via broadcasters, cable companies, ad agencies, and online marketers, the Alliance for Climate Protection should first be required to conduct an environmental impact analysis of how these media each contribute to the climate change threat–and what they should do about it.

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TV advertising, as we discussed in our book, is going interactive. The same privacy problems we now have with online–and will also have with mobile–are being migrated to television. Here’s an excerpt from a trade story on a meeting just held by the advertising industry to discuss interactive and highly targeted TV commercials [our emphasis]:

…Google executive Dan Gertsacov demonstrated the latest iteration of the search giant’s so-called “Goolge TV Ads” program, which is [sic] marries an online, auction-based system for buying TV advertising with Google’s methods for analyzing the clickstream data produced by TV digital set-top devices to give advertisers and agencies the ability to buy and evaluate TV the way they would online search.

The first iteration of the system enabled advertisers to buy TV time based on networks and dayparts. The iteration shown at Carat Wednesday revealed that advertisers and media buyers can now procure TV advertising time based on key words or terms, much the way they would buy online search.

A computer laptop marketer, for example, can now type in the word “laptop” and find a schedule of TV shows referencing computer laptops that they might place ads into.”

source: Carat Meeting Reveals Addressable TV Roll Out, Google ‘Key Word’ TV Buying System. Joe Mandese. Media Daily News. March 27, 2008. reg required.

PS:  Here’s another addition.  Google will track and analyze targeting done via TV and its impact online [excerpt]:

Both [Michael] Steib and [Dan]Gertsacov spoke about Google TV Ads’ ability to offer insight into how a campaign functions simultaneously on TV and online. Steib mentioned the potential for gauging what transpires online–with site visits and transactions–soon after a TV spot runs.”

source: Google Crawls Stations, Tells Broadcasters ‘TV Ads’ Makes Good AdSense.  David Goetzl.  Media Daily News.  March 28, 2008
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Google as “media company” & favoring its own sites–a report from a search engine trade show

John Battelle was on a panel at the recent Search Engine Strategies (SES) conference in New York. Here’s an excerpt from his blog post–which I hope you will read in full [our emphasis]: Google’s brand promise – to be neutral, to be above monetary interest – is in conflict with, well, the rest of Google’s brand promise, to be a superstar stock, to grow faster than any company in the history of the world. And all of that is in conflict with …. Google’s brand promise, to get consumers to the best answer, fastest, regardless of who owns the content. Because…sometimes, that content is now owned by Google…Why when you search for stocks does Google Finance come first? Let’s be honest here. It’s not because some neutral algorithm chose Google Finance. It’s because Google owns that data. Google’s representative admitted as much on our panel today. And, given that, can one reasonably ask why, according to Comscore’s data, the preponderance of results that come up in Google’s universal search are YouTube? Might it be because they are they best results? Sure. Might it also be because Google owns YouTube, which is madly trying to monetize the second, third, and fourth click with new models that it hopes to heck are going to pay off?

Simpson, Thatcher &

Here’s an excerpt from an article in GCP, the “Online Magazine for Global Competition Policy” by Peter C. Thomas, entitled “Lifting the Fog: Google/DoubleClick Demystified.”
“In the end, both the FTC and the Commission cut through the fog of the complaints surrounding the proposed merger to get to the right answer, namely that Google and DoubleClick operate in different, already competitive markets, and that their complementary services, when combined, will not harm competition in any relevant market.”

But readers should follow the asterisk next to Mr. Thomas’s byline, which reads [our emphasis]: “∗ The author is the Managing Partner of Simpson Thacher & Bartlett LLP’s Washington, D.C. office…Simpson Thacher represented Hellman & Friedman and DoubleClick in the acquisition by Google.”

We love objectivity!

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Time Warner/AOL, Google & Microsoft Ganging Up to Kill NY Consumer Privacy Bill?

Here’s what DM (Direct Marketing) News reports, via excerpt:
“Microsoft, Google and AOL are getting ready to meet with New York assembly­man Richard Brodsky, a Demo­crat from Westchester County, to discuss a privacy bill that he is developing, which could have strong implications for the online advertising industry…Brodsky’s office is meeting with these Internet giants to discuss and help finalize the pro­posal, which was based in part on the best practice guidelines set by the Network Advertising Initiative, a group of online mar­keting and analytics companies. Yahoo met with the Assembly­man last fall…

The bill first came to life last June in response to Google’s offer to acquire DoubleClick, which, after a series of reviews, has been approved.

“Assemblyman Brodsky was not satisfied with the focus of privacy that the [Federal Trade Commission] was looking at and wanted to make sure that a big company like Google cannot track a consumer’s behavior and then target them with advertis­ing based on these ads,” Sopris [an aide to Bordsky] explained.

Google, Yahoo and Micro­soft did not return phone calls for comment. AOL declined to comment on the proposed bill until it meets with Brodsky.

The IAB is pushing for consumer and legislator education about how online ad­vertising technologies work and the ben­efits that it can have for consumers.

“While it claims to be looking out for consumers, this bill is not consumer friendly,” Zaneis [a lobbyist for the Interactive Advertising Bureau] said. “Advertising is the engine that drives the Internet today. It pays for free services and content for consumers.”

*****

PS from Digital Destiny: Here’s a link to email Assemblyman Brodsky. Don’t let the online ad companies erode your privacy rights.

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We are glad that the privacy officlals “over there” are going to help bring about some serious new policies (let alone informed discourse) on the “impact of new technologies” and privacy. On its 2008-9 work plan, is “ensuring data protection in relation to new technologies,” including “search engines, On-line social networks (especially for children and teenagers), Behavioural profiling, data mining (on-line or off-line), [&] digital broadcasting.” We expect that Working Party’s investigation will contribute to a serious public analysis of the threats to privacy from behavioral targeting.

It’s no secret that many U.S. companies are engaged in behavioral targeting in the EU. It’s time they were held accountable.

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Bravo for New York Assemblyman Richard Brodsky and his Privacy Bill Protecting Consumers Online

New York State Assemblyman Richard Brodsky understands that the digital marketing industry–aided and abetted by too many complicit online publishers–have created a system unfair to consumers. Our data is continually harvested as we are monitored online (and soon via cell phones and even TV). Ad servers take our information about the pages we visit, the shopping carts we use or abandon, the search terms we use (think health, mortgages, etc.), the videos we watch or click off–and much more–so we can be profiled, tracked across the Web, targeted, and then confronted with a variety of marketing messages all designed to have us change our behaviors (to like this product or that, feel someway about a brand, engage in a purchase, or a relationship–including giving up even more personal info). Our data becomes the key part of what the online ad industry calls a “Marketing & Media Ecosystem.” But if we don’t have serious privacy and consumer protections, this “ecosystem” will erode our privacy, consumer rights, and help undermine the role of the Internet as a democratic medium of discourse.

The lobbyists at the Interactive Advertising Bureau (whose board includes Google, Microsoft, Yahoo!, the New York Times, Comcast, AT&T, News Corp/Fox) make the spurious claim that Brodsky’s bill (and similar privacy proposals) threaten the Internet–because, they argue, such safeguards would reduce the advertising that supports much of online content. That is absurd. No one is saying there can’t be advertising–we are just saying it needs to be done ethically. The public requires a digital media system that empowers the individual. Let each person decide what kind of data can be collected and how it can be used (after carefully–but concisely– explaining the consequences of micro-targeting). There should be real limits on how long the data can be retained as well.

The real “ecology” for the future of online communications is a healthy balance between commercial and ad supported ventures and a vibrant public sphere. The IAB is relying on tired lobbyist phrasebook warnings about threats to the Internet if advertising has to abide by consumer protection rules. Frankly, we are amazed that the IAB–with its membership representing most of the major online publishers–can’t adopt a more statesperson-like approach.

Mr. Brodsky’s bill needs to be strengthened, so consumers are empowered to decide what data can be collected, via an opt-in system. It must also protect New York residents from the egregious data collection excesses that we have witnessed with the online mortgage and financial sector, and the emerging health information field. So Bravo to Assemblyman Brodsky for his leadership role in helping protect consumers from a digital marketplace that has evolved based on the unfair and deceptive system of interactive data collection.

CEO from NebuAd demonsrates why New York, other states and Feds must protect consumer privacy on digital networks

We raised concerns about NebuAd last November. The growing use of behavioral targeting collection of data via ISPs requires immediate intervention by policymakers. Thanks to an article written today by NebuAd’s CEO, there’s more evidence supporting a compelling need for policymakers to act and protect consumers.
Here’s an excerpt [our emphasis]: “Web-wide behavioral advertising
This is the type of solution being offered by my company, NebuAd, as well as others, such as Adzilla. The web-wide behavioral advertising companies are able to leverage a large proportion of user surfing habits and their searches. So while portals such as Yahoo may collect information on a fraction of user surfing behavior, web-wide behavioral advertising companies are able to observe most of a user’s surfing behavior. Having such rich information allows companies in this space to build much larger, and define more meaningful audience segments, which in turn will enable advertisers to tailor their offerings to their specific desired audiences.

Moreover, having instant access to user surfing behaviors means that profiles can be developed quickly — really quickly. Web-wide behavioral targeting can develop detailed profiles in a single surfing session, something it would take “traditional” BT players weeks or even months to do. And as profiles are developed almost instantaneously you get a clear picture of what the user wants now — not what he was interested in a while back. Ultimately advertisers want results, and this means they need to reach web users with a relevant ad at the exact moment they are in the market for their goods and services.”

source: “3 Factors Improving BT’s Aim.” Bob Dykes. imediaconnection.com. March 20, 2008