In the rapidly expanding world of online advertising, a few mega-giants are dramatically expanding their power, including the ability to track consumers' online movements, to collect and analyze personal data resulting from those travels, and to craft ever-more-sophisticated digital marketing campaigns based on that analysis. The recent spate of mergers and acquisitions in the online advertising industry—led by Google's $3.1 billion takeover of DoubleClick in April and Microsoft's $6 billion buyout of aQuantive in May—threatens to undermine privacy, competition, and diversity on the Internet. Permitting the further growth of these data-dependent unrestrained giants is a threat to personal privacy online. Increasing digital media consolidation will also have a negative impact on the diversity of public interest content essential for a civil society (e.g., news, public affairs, and cultural programming).

The importance of search technologies to the online ecosystem cannot be overstressed. Search platforms like Google—which controls over 75 percent of the U.S. market—serve as the launching pad for hundreds of millions of online journeys every day, and"search plays a role in roughly half of all online purchases, according to DoubleClick's research. One problem with the online search process, however, is that it is essentially a two-way mirror: while we seek information on various topics, and click from site to site in quest of answers to our queries, companies like Google and Yahoo (and their legions of advertising clients) are watching our every move, compiling data, inferring tastes and interests, and assembling extensive profiles that will shape the content that will come our way in the future. The amount of data covertly changing hands in this fashion is staggering, as a recent Red Herring article on DoubleClick's digital holdings makes clear:

"Without a doubt, DoubleClick's historical data is very valuable," says Jupiter Research analyst Emily Riley. "Every time you're online, every page visit, and every ad you see comes with the possibility that a cookie is placed on your machine. DoubleClick has all the data." How much data? Ms. Riley's back-of-the-envelope calculation puts it into the fifteen figures: with more than 100 million web users viewing a quarter million pages a year, it hits the 2.6 quadrillion mark—and that's just U.S. users. If DoubleClick's ad network touched even half of those interactions, it amounts to the kind of database advertisers would drool over. "What it does is complete the picture for Google about what's happening on publishers' web sites," Ms. Riley says.

While much has been made of the looming Google/DoubleClick threat to its competitors—"a potentially frightening situation for [ad] agencies," according to Online Media Daily, as "a rather sinister master plan begins to unfold"—much less has been written of the larger threat posed by Google—to the culture of the Internet itself. In this context, Precursor analyst Scott Cleland makes an apt comparison to Microsoft:

Just as Microsoft vertically-leveraged (bundled/tied) its operating system dominance to dominate the office applications market via the Windows platform, Google apparently looks to vertically-leverage (bundle/tie) its keyword search dominance with DoubleClick's leadership in online banner/video display advertising, and with its Google-YouTube dominance in video search…. This vertical combination reportedly could give Google-DoubleClick upwards of 80% of the overall market for advertisements provided to third-party websites. Just like Microsoft became the default office applications platform for email, e-calendars, word processing, spreadsheets, and PowerPoint, for any user, Google has obvious designs on becoming the default Internet advertising broker/platform for: keywords, website display ads, and TV, radio, newspaper/magazine advertising for the average large advertiser.

While the mainstream media generally avoid any substantive discussion of this new digital landscape, the trade press has duly noted the potential impact of Google's and Microsoft's recent moves. As Search Insider pointed out, for example, "If Microsoft gains access to all the data, across all the engines, for aQuantive's entire client roster of search clients, it will be sitting on a treasure trove of information that it's never seen before—and which should have Google feeling very nervous. The same is true, of course, for the information that DoubleClick's Performics can provide to Google. To a network, an agency is a wealth of competitive data—a fact about which all of the networks are undoubtedly aware." Regarding Google's DoubleClick acquisition, similarly, Direct Marketing News noted that "[t]his deal gives Google access to publishers outside of its current AdSense network and to behavioral data that will help them with ad targeting."

Indeed, such targeting, unbeknownst to the vast majority of those who traverse the Net, is at the heart of the new personalized marketing paradigm. As DoubleClick tells its clients, touting its "Boomerang" one-to-one targeting technology:

Behavioral targeting is the most effective form of targeting available. It allows you to re-target the most desirable audience of all: browsers who have already shown an interest in your product or service. With Boomerang, you can now engage that audience in a dialogue, providing timely and relevant messages triggered by their online actions. Boomerang delivers true behavior-driven advertising, so you can reach pre-qualified prospects and customers more quickly and easily.

 

Google will incorporate Doubleclick’s Boomerang and related technologies into its massive data collection and tracking system (which also tracks users of online video, such as YouTube).

Ultimately, however, the threat posed by Google and Microsoft in particular and the converged advertising environment in general extends far beyond commerce, reaching to the very culture of the Internet. The danger is that in the quest for the most desirable demographic (and the higher advertising revenues that these audiences bring), less marketable material—including the public affairs and cultural programming on which a civil society depends—will be driven further into the margins of online culture. Just as the old media's fixation on circulation figures, box office receipts, and Nielsen ratings have impinged on creativity and independence, so will the new media's ad-driven pursuit of the highest returns on investment yield similar results—lowest-common-denominator programming designed, once again, to deliver "eyeballs to advertisers." The manner in which content creation and distribution is "monetized" (to use a favorite word of digital venture capitalists) will largely be determined by its ability to generate profits, raising critical competition issues for a medium once heralded for its ability to support a full range of diverse content. The impact of Google/DoubleClick and related mergers in online marketing, in short, must be assessed in light of their effect on the Internet as a robust marketplace of ideas, and not merely as another shopping mall.

Recommendations:

• Individuals and nonprofit organizations should press their elected representatives and other officials to engage in a serious examination of the aforementioned deals and what they mean for the future of the Internet and online media. Appropriate safeguards should be sought.
• Nonprofit and community organizations should use these deals to help educate the public about what such mergers mean for the future of democratic content in a civil society, as well as their implications for privacy.
• The nonprofit sector should develop a collaborative strategy to address these mergers and the related issues they raise.