Commercial Alert’s Work on Stealth Word-of-Mouth Marketing: Getting the FTC to Wake Up

Congratulations to the group Commercial Alert for pushing the Federal Trade Commission to act, even timidly, on one of the most egregious marketing ploys. “Word-of-mouth” marketing uses people–including kids–to push products to friends and others. Such product pushers receive all kinds of compensation, including feeling they are among an “in-crowd.” That’s what companies actually say to these kids. It was Commercial Alert’s petition that got the FTC to admit greater disclosure is required. Such marketing tactics are part of the emerging “360” degree field of “engagement” that advertisers and brands are building. Wherever we go, online and off, we will be the targets of marketing (including what is known as WOM). But at least now, as as a result of the Commercial Alert work, stealth product pushers better fess up. Perhaps we will even see some changes in how the companies engaged in such sorry practices, especially using kids/teens, operate. If not, these companies will find themselves on the wrong side of branding.
Gary Ruskin and his colleagues deserve our thanks.

CDT Works to Undermine the Public Interest in Broadband/ Allies with PFF

The Center for Democracy and Technology (CDT) has long served as part of the political support system for the telecom and media industries. While many view CDT as a privacy group, a great deal of what the organization does benefits its corporate supporters—which have been some of the biggest media and data collection companies in the country. They have included Axciom, Doubleclick, Time Warner, AT&T, Microsoft, Yahoo!, Google and Intel.

Now, CDT has joined forces with one of the key corporate funded groups that has been leading the charge against network neutrality: the Progress and Freedom Foundation. PFF, co-founded by Newt Gingrich, is also supported by numerous corporate media/telecom interests, including Murdoch’s News Corp. (Fox), AT&T, BellSouth, Comcast, Clear Channel, GE/NBC, Google and Microsoft.

Yesterday, the two groups jointly filed amicus briefs in federal courts supporting News Corp./Fox and NBC’s efforts to undermine the ability of the FCC to regulate communications. The TV networks are fighting the FCC’s recent decisions on broadcast indecency. But the CDT/PFF filing wasn’t only about over-turning the FCC’s foolhardy and inappropriate efforts on so-called indecent content. The message CDT and PFF gave to the courts was they should rein in any effort by the FCC to ensure that the public interest be served in the digital media era. The filing claims that convergence of various media, including the Internet, make any policy role for the FCC related to diversity of content a threat to free speech itself. A very convenient argument that must warm the hearts of both CDT’s and PFF’s corporate funders, because they are precisely the companies who wish to avoid having a public interest regulatory regime in broadband.

Missing from the brief is any discussion of the regulatory areas for broadband (including PC, mobile, and digital TV [IPTV] platforms) that will require federal policy, including a key role for the FCC. Among them, ensuring an open, non-discriminatory content distribution policy for the Internet—network neutrality. Other rules that will require FCC action in the broadband era include ensuring “free” and “equal” time for political speech; diversity of content ownership, including by women and persons of color; localism; public service; privacy; and advertising regulation. There will need to be ad safeguards, for example, protecting children from interactive marketing that promotes obesity as well as with prescription drug ads targeting seniors via immersive “one-to-one” media techniques.

CDT and PFF argue that the new media environment provides the public with greater choice, another reason they urge the courts to limit FCC authority. But what’s really happening with digital media is that we are facing a system where the “choices” are being meaningfully reduced by the market. Wherever the public goes, the forces of conglomerate media and advertising will confront them. Consider, for example, News Corp.‘s MySpace now running Fox programming. (It’s interestingly, by the way, that neither CDT nor PFF told the courts that they have a financial relationship with some of the interests involved in the indecency debate).

We have long opposed FCC efforts to “regulate” indecency, including being critical of FCC Commissioner Michael Copps (whom we otherwise strongly admire). The indecency effort by the FCC has helped let it become vulnerable to this attack by the media conglomerates, and their supporters, who have a longstanding political agenda aimed at sweeping away all regulation and safeguards. Fox, NBC, Viacom, Disney and the rest want a U.S. media system where they can own as many media outlets as they want, not have to do any public service, nor worry about regulators concerned about threats to privacy and interactive marketing abuses.

The emerging broadband era in the U.S. will see us face further consolidation of ownership of media outlets, including the Internet, as well as an increase in overall commercialization. The cry that Wall Street has for broadband is “monetization.” But our electronic media system must also serve democracy—not just the interests of those who want to make money. Civic participation, public interest civic media, and safeguards from content and services designed to manipulate us must be addressed. There is a role for the FCC in all this. (We shouldn’t throw-out as “bathwater” the potential of our broadband media to serve democracy and a role for the FCC because we are upset about it catering to zealous social conservatives who don’t like some programming).

Finally, shame on CDT for joining up with PFF. PFF is an opponent of the network neutrality policy for the Internet. It has also long opposed any meaningful role for the FCC. But, perhaps that’s the point. If PFF gets it way, its backers–and many of CDT’s–will be free to do as they please, regardless of the consequences to our democracy.

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Online Ad and Data Collection Watch

My group has launched a new project to keep the public better informed about the latest threats to our privacy. Click here to visit Online AdWatch. It will regularly highlight new developments in the interactive ad marketplace across the PC, mobile, and digital TV platforms. Send me your favorite examples of technologies, applications and market strategies that should be included.

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Political Games Advertisers Play: A GOP Protection Racket

The nation’s biggest advertisers and marketers have developed an effective political operation in Washington. Madison Avenue and its clients have been able to ward off calls for policies, for example, that would protect our privacy. How the Association of National Advertisers (ANA) and the American Association of Advertising Agencies (AAAA) conduct its lobbying efforts have largely been off the radar screen. After all, the press cannot examine itself (since the ad lobby is ultimately tied to the fate and fortunes of broadcasting, cable, newspaper, and much of online).

So we thought it was worth pointing out a telling comment in a recent Advertising Age story written by its indefatigable and enterprising D.C. bureau chief Ira Teinowitz. In his story titled “What Democratic Control May Mean for Marketers” (Oct. 16, 2006), he quotes AAAA VP Dick O’Brien. A change in control, said O’Brien, would mean that “[T]he sort of protection we have had on the House Commerce Committee will disappear.”

While not a bombshell, such admissions help tell the story of how all too often, Commerce chair Joe Barton and Telecom subcommittee chair Fred Upton have worked to help the big buck special interest agenda (think Bells, cable and no network neutrality for broadband). While we don’t believe the Democrats are Saints, at least once in a while they will yell and scream. The Ad industry, in our opinion, needs to lose its protection racket defense.

Stupid Ads Running at [Non-commercial!] PBS: “Ancient Tea that Dissolves Belly Fat”

Hey, folks at Nova—or better yet Frontline. Better launch an investigation into the health claims originating from PBS. One of the site’s “sponsored” ads asks: “Hate Your Body Fat? Drop 1 Jean Size Every 7 Days. The Tea that Dissolves Belly Fat!”

AncientOkinawanTea’s site, which one is transported to from, claims that it “Boosts Energy and Mental Well-Being.” “Reduces Cancer Risk.” “Strengthens Your Immune System.” “Each cup of Ancient Okinawan Slimming Tea melts away stubborn bodyfat, reduces wrinkles, boosts brain power and enhances your health. Scientific Research proves it!….Not available in stores. Hurry, going fast! Normally $95.99. Today Only $37.”

The tea, so it is claimed, can help one shrink “8 Jean Sizes in 8 Weeks.” We think someone has been putting it in the water cooler at PBS HQ. But it’s their brains that have shrunk—so they cannot imagine a PBS digital environment without ads.

What Google-YouTube Means for the Public Interest

Here’s a new piece I wrote for The Nation magazine online that summarizes my concerns about what is happening with our digital media system–and what we should do about it.

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Google’s Grandiose Ad Ambitions

Look, we all know that Google is in the business of delivering eyeballs and clicks. That’s where it makes 99% or so of its revenue. But have they no sense of bounds for the evolving role of interactive marketing? According to Mediapost, Tim Armstrong, Google’s vice president for ad sales, said today that “[A]t the end of the day, we’d like to see Madison Avenue get bigger.” The online publication reported that “Google wants to combine Madison Avenue with Silicon Valley to forge what [Armstrong] hopes will be the largest marketing platform around.” Armstrong made these comments at Google’s new offices located in New York City’s Chelsea district.

There need to be meaningful safeguards to govern the new media marketing world. The folks at Google shouldn’t be so glib about creating a system of digital platforms where over-consumption permeates our identity—online and off.

Source: “Google Sets Sights On Madison Avenue.” Wendy Davis, Just an Online Minute via Mediapost. Oct. 2, 2006

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Microsoft’s Massive Interactive Ad Venture (with a editorial reminder for the Washington Post)

Bill and Melinda Gates receive just praise for their eponymous charitable foundation. But like so many other philanthropists, the money comes via disreputable practices. Little is ever mentioned when discussing the Gates Foundation that its resources were built on a coldly executed monopolistic business strategy. The European Commission is still trying to undo the impact of Microsoft’s monopoly. Like many other robber barons turned philanthropist, perhaps Mr. Gates has made a later-in-one’s life conversion. He is now widely viewed—by the press and others—as a saint, not a sinner.

But Microsoft’s recent acquisition of Massive—the leading provider of online advertising for video games—illustrates his company’s continued lack of a moral vision. Massive sells to a wide array of advertisers and marketers the eyeballs—and really the subconscious minds—of teens and other gamers. Video games become populated with all kinds of commercial messages to help push the marketing goals of “Entertainment, Automotive, Telecom, Packaged Goods, Technology and Retail,” explains Massive. These ads are placed before users in “real-time” and can be readily updated and revised to suit an advertisers marketing strategy. You can be sure users are tracked and profiled.

Here’s what Massive also tells advertisers: “Massive’s patent-pending ad serving technology and unique ad units guarantee that advertisers get precise, measurable exposure in their campaign. The dynamic nature of the Massive Network gives advertisers the opportunity to target gamers with different messages based upon geography and time of day. The advertising creative and campaign can be highly customized and changed quickly to meet evolving market conditions and brand priorities. Ad messages are customized to contextually fit each game environment and then served to locations within the game that are pre-selected by Massive and the game’s creative developers.”

“Types of ad units include (but are not limited to):

* Billboards and Posters
* Vehicles
* Pizza Boxes
* Soda Cans
* Screensavers
* TV Screens”

Microsoft is currently engaged in a desperate effort to catch up to Yahoo! and Google in the interactive advertising game. Massive is seen as a prime way to extend the software giant’s interactive ad clout. But, by facilitating the ability of marketers to encourage young people and others to consume more beer, pizza, and fattening soft drinks, Microsoft is making an unhealthy and inappropriate contribution to our culture. It won’t do the public any good if—say twenty years from now—Bill and Melinda Gates begin suddenly spending foundation money to combat obesity-related illnesses. They would have already helped encouraged millions of game users to identify with such products.

This week’s announcement that Microsoft’s Massive will be distributing Electronic Arts (EA) games for its Xbox, including “first person shooter” Battlefield 2142, is a good illustration why folks working for Gates should hide their heads in shame. Here’s what an EA executive said about the deal: “Consumers are increasingly engaged in deep, virtual worlds and advertisers need adapted ways to reach these audiences.”

Oy Vey!

And now for the Washington Post. The news article [9/1/06] reporting on the EA deal was very polite—and didn’t explore much the concerns over Microsoft’s use of interactive ads for games. Perhaps that’s because folks know that Melinda Gates is on the board of the Washington Post Company. Post Co. reporters and editors always need to disclose their corporate connection to Microsoft and the Gates family.

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