How long can they get away with the “it’s anonymous” cover story as they identify, analyze, track and target our online interests and behaviors? Excerpt from Media magazine: “behavioral segmentation refers to a media seller’s packaging of groups of cookies who have visited sites (other than the client’s own) that suggest a need or receptivity for the client’s category of product. For example, all cookies that have visited automotive-related sites over the last 60 days may be packaged as a segment of people likely to be in the market for a new car…Predictive targeting uses more than behavior data…It uses mathematical algorithms to predict what a user will most likely interact with, and then learns and is adjusted based on the actual results...It is based on cataloging what a user has done in the past.”

source: Taking Measure: Savor the Flavor. John Nardone. May 2008

At last week’s FTC hearing on mobile marketing, we pressed several industry representatives to confirm that the data tracking, profiling and targeting system we now have online is being migrated to mobile. That’s what eventually we were able to get at least one mobile marketing panelist to confirm.

Meanwhile, we have learned that Google has made presentations to advertisers about its mobile marketing capabilities. It appears that mobile cookies are part of their targeting marketing plan. Google told advertisers that “Google provides mobile conversion tracking on phones that support cookies. Google can measure clicks, impressions and conversions for all campaigns.”

Google needs to explain to the public how its cookies and mobile ad tracking and targeting will work, including what safeguards it plans. By the way, we also think it’s interesting to place Google mobile in the context of its DoubleClick subsidiary. DoubleClick mobile “is an ad delivery system for mobile websites that delivers dynamic, interactive ads to mobile web pages based on specific criteria as determined by you. It supports a wide range of devices and boasts a full management and reporting suite. Now publishers can deploy mobile advertising with the same confidence and control as online display ads…Report on impressions, clicks, jump pages and third-party metrics…Full reporting for all dynamically displayed ads.”

Google’s Android does, it turns out, dream of electric ads via cookies.

Among the questions we will raise with policymakers is what any alliance between Google and Yahoo! will also mean for their respective mobile search advertising businesses. Privacy is certainly a concern here, as companies such as Google migrate the user tracking and targeting model which fuels the traditional PC-focused online ad business.

Here’s what Yahoo! says in can do with its Mobile Ad Services: “Yahoo!’s Mobile Ad Services make it possible to reach your target customers wherever they are, seamlessly following them from the PC to the mobile Internet. A wide variety of ad formats, targeting options, and calls-to-action are available – as well as resources to help you put effective programs in place if you’re new to mobile advertising…
Eye-catching display ads can be targeted using the same wide array of options as traditional Web banners (e.g. context, demographics, behavioral) – and can incorporate location, which has greater importance when marketing to consumers who are ‘on the go’.”

Update [via 5/12/08 Advertising Age. sub required likely]: “Google has managed to command a lead in mobile search, though nothing like the massive share it has in the PC-based internet world. According to M:Metrics data, Google had a 38.3% share as of August 2007. (Yahoo is the next closest with 25.4%.)”

source: WiMax Could Bring Dramatic Changes, Wherever You Are. Abbey Klaassen. Ad Age. May 12, 2008

Eyeblaster is a rich media online advertising technology company which filed a S-1 with the SEC last March (for an initial public offering). Here’s the section on privacy:

“Privacy concerns could lead to legislative and other limitations on our ability to collect usage data from Internet users, including limitations on our use of cookie or conversion tag technology and user profiling, which is crucial to our ability to provide our solutions and services to our customers.

Our ability to conduct targeted advertising campaigns and compile data that we use to formulate campaign strategies for our customers depends on the use of “cookies” and “conversion tags” to track Internet users and their online behavior, which allows us to build anonymous user profiles and measure an advertising campaign’s effectiveness. A cookie is a small file of information stored on a user’s computer that allows us to recognize that user’s browser when we serve advertisements. A conversion tag functions similarly to a banner advertisement, except that the conversion tag is not visible. Our conversion tags may be placed on specific pages of clients of our customers’ or prospective customers’ websites. Government authorities inside the United States concerned with the privacy of Internet users have suggested limiting or eliminating the use of cookies, conversion tags or user profiling. Bills aimed at regulating the collection and use of personal data from Internet users are currently pending in U.S. Congress and many state legislatures. Attempts to regulate spyware may be drafted in such a way as to include technology like cookies and conversion tags in the definition of spyware, thereby creating restrictions that could reduce our ability to use them. In addition, the Federal Trade Commission and the Department of Commerce have conducted hearings regarding user profiling, the collection of non-personally identifiable information and online privacy.

Our foreign operations may also be adversely affected by regulatory action outside the United States. For example, the European Union has adopted a directive addressing data privacy that limits the collection, disclosure and use of information regarding European Internet users. In addition, the European Union has enacted an electronic communications directive that imposes certain restrictions on the use of cookies and conversion tags and also places restrictions on the sending of unsolicited communications. Each European Union member country was required to enact legislation to comply with the provisions of the electronic communications directive by October 31, 2003 (though not all have done so). Germany has also enacted additional laws limiting the use of user profiling, and other countries, both in and out of the European Union, may impose similar limitations…

If our ability to use cookies or conversion tags or to build user profiles were substantially restricted due to the foregoing, or for any other reason, we would have to generate and use other technology or methods that allow the gathering of user profile data in order to provide our services to our customers. This change in technology or methods could require significant reengineering time and resources, and may not be complete in time to avoid negative consequences to our business. In addition, alternative technology or methods might not be available on commercially reasonable terms, if at all. If the use of cookies and conversion tags are prohibited and we are not able to efficiently and cost effectively create new technology, our business, financial condition and results of operations would be materially adversely affected.”

Yesterday, we were contacted by a reporter asking our position on the possible Google/Yahoo! search advertising deal (we are opposed to such an arrangement, on both competition and privacy grounds). When we read the story online, we learned that one of the groups sending a letter to the DoJ was the Black Leadership Forum. That raised our concern, since we know that the Black Leadership Forum has had relationships with phone and cable companies. It has also, in the past at least, worked with Issue Dynamics (a company which helps phone, cable and other interests “organize” support from not-for-profit groups. I cite Issue Dynamic’s role with the Black Leadership Forum on page 75 of my book.).

We have not read the letter to the DoJ. Nor do we know of any financial or other relationship between the Forum and any of the many interests who are fighting Google (phone and cable companies, for example, are opposed to Google’s positions on network neutrality). But we believe that all financial relationships, even from the recent past, need to be identified. I know this is Washington, where too many people “lease out,” as we say around my office. But there are important issues at stake with the new media marketplace. Reporters will need to do more to identify whether there are financial and other relationships with groups from Google, Microsoft, phone and cable, etc. But the real focus should be to examine the state of competition in the online ad market–and what it means for the future of communications in the digital democratic era.

excerpt: “A behavioral targeting firm called Media6degrees said it’s engineered a workaround to the dual problems of data and relationship glut. Rather than look at a person’s friend list, the company uses a combination of cookies and ad server logs to pinpoint a person’s interests and generate anonymous profiles of her real friends… Media6degrees found an Internet analogy in referral information stored in ad server logs. Those logs can be made to cough up specific social networking profile pages an individual has visited recently by analyzing referring URL structures, which is potentially actionable information when juxtaposed with an action taken by the ad-clicker… Affinity groups of presumably anonymous individuals are created by grouping individuals who have visited the same set of profiles.”

But how does the firm get access to those server logs?… it partners with a network of advertisers that each volunteer to place a cookie on the browsers of Web users visiting its sites. Participating advertisers and site owners receive a small CPM to distribute its pixel.

“If you put up a media pixel on your site, we can not only help you retarget an individual who came to that site, but we can help you identify micro-affinity groups…”

source: New Firm Combines Social and Behavioral Ad Targeting. Zachary Rogers. ClickZ.com May 6, 2008

The mobile marketing ecosystem, as its called by the industry, poses significant consumer protection and privacy concerns. Next week, the FTC is holding a two-day town hall meeting on mobile marketing. The commission has invited me to participate on the mobile advertising and marketing panel. The public and many policymakers are entirely unaware of what’s soon coming. The FTC and policymakers must do a better job both educating the public and asking them to speak out about how the marketing system should be structured. Safeguards will be required, including for youth. I will try and deliver a “click to call to action” overview.

Granted, the IAB’s Washington, D.C. lobbying shop, opened last year, is a small operation. Now the IAB is in the process of hiring a second person for the office. No doubt IAB wants to protect the data collection and micro-targeting digital turf of its members. Former Tacoda and Time Warner exec. Dave Morgan perhaps revealed why the political stakes are so high for IAB members such as Google, AT&T, Comcast, Time Warner, Disney, CBS, NY Times, Washington Post, etc. in Media Post. As Morgan explained, “.. Everybody now knows that data is the fuel for growth. Everyone is starting to mine it and make it available to third parties…The big four (Google, Microsoft, Yahoo and AOL’s Platform A) are all opening up their networks and systems to leverage third-party data; so are the ad servers like WPP’s 24/7 Real Media; and so are the ad networks…We’re moving into a wild, wild west in monetizing real-time marketing data, and we’re going to need many more people that know how to do this…As we see this data take on more value and play a bigger role in our industry, the public policy implications are going to become much more pronounced.”

Time Warner’s AOL, which now owns Bebo, will be focusing the site to better target the 13-24 year old demographic. Now part of the Platform A online ad system, Bebo will help support AOL’s European plans, enhancing its ability to “engage” youthful users. As reported by paidcontent.org, “Bebo’s engagement marketing will be melded with AOL’s Platform A.” Bebo’s Joanna Shields explained that “[I]n the UK, the 13-24 year olds are watching less and less television… if you’re trying to reach the young demographic, you have to reach them in the language in which they’re interacting with these sites.” Paidcontent noted that Ms. Shields “touted the redesign of AOL to make the various sites more appealing to youth, which has caused an increase in engagement.”

Bebo is at the core of AOL/Platform A’s international expansion plans. By combining Platform A’s data collection and targeting apparatus with Bebo’s appealing content for youth, paidcontent suggested that Time Warner hoped that “…the opportunity to monetize the site may be superior than what it’s been at other social nets.”

We have long believed that the New York Times needs to explain to readers and users the range of digital marketing technologies and strategies it deploys. The Times (and its Times Digital) uses behavioral targeting and is currently working with Revenue Science. Revenue Science proudly proclaims that the “behaviors of more than 120 million individuals are tracked and aggregated from across the Internet.” Claiming it relies on “powerful Boolean logic” to propel its tracking and targeting effort, Revenue Science explains that it places users into discrete targeting segments “… based on multiple criteria that demonstrate interest or intent to buy. For example, to qualify for our automotive audience, users might read multiple articles and take specific actions such as filling out a loan calculator. Revenue Science uses Boolean logic to find and segment multilayered behaviors to reach the right audience…Revenue Science Targeting Marketplace connects people to engaging advertising with the most advanced behavioral and targeting capabilities available, and the marketers that choose Revenue Science benefit from advanced data intelligence to reach the right people, at the right time, every time.”

The Times Co. has been a leader in the online marketing arena for almost two decades now (as we explain in our book). Online is an important revenue segment for the Times Co. (as it must and should be for all newspapers). The Times “web analytics group” is looking for a “senior web analytics manager.” We think what such a person and the group does raises privacy and related issues. Here is an excerpt from the job announcement: “The New York Times web analytics group is responsible for measuring and understanding the largest and most influential online newspaper audience in the world… As a senior web analytics manager, you will be expected to:

• Deeply understand the NYTimes.com audience and their behavior
• Support the analytic needs of the company by using WebTrends and other analytical tools to understand trends in web traffic…
Work with the NYT customer insight group to coordinate and focus quantitative and qualitative analysis related to audience behavior…”

Ultimately, web analytics, tracking and targeting techniques will have an impact on journalism-some good, others not-so-good.  When an online publication understands exactly what the most desirable demographic–or even individual–wants in terms of news, it will have an impact on news budgets, we believe. So think more entertainment and less serious journalism down the road. Not at places like the Times, we hope, but certainly at many other publications.  But for newspapers to remain a credible source of information during this crucial transition phase for journalism, they must address the privacy and online marketing “ecosystem” they have embraced.