Digital Destiny

Google just acquired Angstro and hired its co-founder Rohit Khare. Khare will help Google create its new social network.  Last December, Khare warned about the growing lack of privacy online [excerpt]: “When RockYou can stash 32 million passwords in the clear; when RapLeaf can index 600 million email accounts; and when Intelius can go public by buying 100 million profile pages; then our social networks have traded away our privacy for mere “privacy theater.”…none of the social networks that we’ve integrated with has an API for reading email addresses — but all of them have no problem asking you to “Invite your friends!”  After all, most social networks remain hypocritical enough to phish passwords to other social networks themselves as soon as they ask you to “Invite your friends” for their own viral growth!
Putting aside the hypocrisy of phishing passwords to scrape those friends’ email addresses in the first place, the subtler flaw is that social networks are more than happy to search their member database for those addresses to share a list of suggested friends. That’s how a Rapleaf could take a mailing list, pretend that those are all friends of theirs, and slowly accumulate a “reverse phonebook” that maps emails to social network profiles.”

Given Google’s own problems addressing consumer privacy, we will be watching closely to see if Khare’s concerns are reflected in what “Google Me” (or whatever their social network gets called) really addresses the problem.  That will need to include enabling users to control the data used for digital marketing and advertising, as far as we’re concerned.

From the Connected Marketing Week in SF, via ClickZ:  Google is simultaneously attempting to fill the role of ad exchange, ad network, DSP (through its Invite Media acquisition), and media agency…Michael Rubenstein, president of AppNexus and the former head of Google’s ad exchange efforts, said Google has been admirably fair and transparent. But he said that could change.”Google is putting together the pieces to form a dynasty,” he said. “So far they’re behaving pretty well as far as keeping the ecosystem open to everybody, probably because they need to. But we’ll see what happens over time as they accumulate more market power.”

Just a quick reminder to network neutrality supporters that Google has made a multi-billion dollar investment in its ability to deliver mobile ads.  That’s a key reason for its “let’s make a digital deal” with Verizon.  For example, in 2007 Google acquired  Doubleclick:“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…DoubleClick Mobile enables you to manage and report on your mobile advertising campaign through every click. We’ve made it easy to set campaign dates, define mobile specific targeting criteria and get full reports on all mobile campaigns…records information on third-party destination sites…DoubleClick Mobile features support for a variety of ad networks to enable you to sell more of your inventory and maximize possible yield…”

This year Google acquired Admob:  “AdMob offers brand advertisers the ability to reach the addressable mobile audiences. Our innovative ad units will carry your brand messaging onto the top mobile sites. As one of the leading brand mobile advertising marketplaces, we have the products and the people to help you meet your campaign needs…Mobile advertising provides you with targeted access to mobile users, and is easy to buy and measure…AdMob stores and analyzes data from each ad request to serve the most relevant ad possible. AdMob Mobile Metrics offers a snapshot of this data to provide insight into trends in the mobile ecosystem.”

And don’t forget Google Adsense for mobile:  “AdSense for Mobile helps you earn money by displaying relevant Google ads alongside your mobile web pages or within your mobile applications.”  Or YouTube Mobile.

PS:  eMarketer got it right.  The Google/Verizon deal is about preserving mobile as a controlled digital territory: “By 2014, eMarketer expects the number of mobile internet users in the US to reach 142 million, a near tripling of 2008 levels. The total pool of internet users, which includes mobile and wired access, will increase over the same time period from 203 million to 250 million. By 2013, more than half of all US internet users will be accessing the web through a mobile network, either alone or in addition to wired usage.”

Neither Google or Verizon should be privately negotiating the future of the Internet by private, closed-door, dealmaking.  Both companies have a tremendous conflict of interest–because they are involved in distributing multimedia content and collecting user data to target consumers across the Internet, mobile and digital TV platforms.  To exempt wireless from any safeguards is a good example of how self-serving this deal is–everyone knows that mobile will operate the same way the wired Internet does–in terms of behavioral targeting, for example.  That’s why the “deal” announced has loopholes that will benefit their special interests over others online.  What’s needed are strong federal safeguards that keep the Internet open and free from under the influence of the most powerful online giants…This deal was written with purposeful “digital” loopholes so companies like Verizon and Google, and other well-endowed players,  can dominate the future of the Internet.  It potentially would enable them to create the kind of special first class web distribution service that undermines the goals of network neutrality.  Instead of the Internet, we have a special interest web.

Google recently made an announcement that will require likely greater bandwidth for Google’s YouTube.  According to its July 9, 2010 post, “Today at the VidCon 2010 conference, we announced support for videos shot in 4K, meaning that now we support original video resolution from 360p all the way up to 4K…We’re excited about this latest step in the evolution of online video.” Also perhaps relevant to its Verizon dealmaking is Google’s move towards long-form ad supported videos on YouTube, to better position itself as a commercial video provider. If they want to ensure they are first in the `que’ with other entertainment companies, then reversing its position on network neutrality is part of their business plans.  They are ultimately in the same show biz/advertising space as everyone else is.   Btw, given that the media/telecom companies really don’t see a difference when marketing and distributing across multiple platforms, inc, mobile, it’s outrageous mobile would be exempt from network neutrality rules.  But perhaps blame it on Google’s Admob acquisition and its [and everyone else’s] plans for mobile location ad targeting!

Here’s an excerpt from today’s Ad Age article on Google’s new higher resolution and more bandwidth system for YouTube:  “YouTube recently announced support for “4k video,” meaning video files with a dimensional size up to 4096 x 2304 pixels — in other words, much larger than your computer can handle.  Online video is booming, and marketers are still trying to figure out how to create the optimal user experience and achieve the best results for their campaigns…YouTube mentions that watching videos in 4k requires an “ultra-fast high-speed broadband connection,” but this is actually the least-important requirement. While users on slower broadband connections can always wait for enough of the video to download and buffer before watching it (though why would a marketer force consumers to do that?)…

Google’s 10Q second quarter report just filed at the SEC has an interesting reflection on how the online ad giant views the privacy issue.  It wrote that:

Regulatory authorities around the world are considering a number of legislative proposals concerning data protection. In addition, the interpretation and application of data protection laws in Europe and elsewhere are still uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data practices, which could have an adverse effect on our business. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.

And a somewhat related angle–Google’s focus on generating more ad dollars online.   Brandweek reports, in an article on all the venture investment going into expanding online targeting that:

Neal Mohan, the vp of product management at Google who leads its display ad efforts, believes the display ad market could be five times the size it is today, if the system for buying ads was more efficient and the performance measurement was better.

“It can be done, frankly, a lot better than it is today,” Mohan said, noting Google now has “hundreds” of engineers working on display advertising technology.

Online industry reaction to the Wall Street Journal privacy series, and generally, illustrate a basic disconnect in how they view the privacy concerns raised by digital profiling, tracking and targeting.  Leading online marketers frequently claim that behavioral targeting and related data-focused techniques are actually good for the consumer.  The problem, they argue, is that consumers lack basic information about the process.  Presumably, they believe, if we really understood how it worked, we would be relieved.  In truth, of course, the opposite is true.  The more one knows about the processes underlying what the online ad industry claims is a digital marketing “ecosystem,” the more a consumer and citizen should be alarmed.

In the UK, EU and in the U.S., companies like Google and Microsoft are working together on PR campaigns to convince both the public and policymakers all is well with behavioral profiling for marketing.  One Google executive in the UK recently told New Media Age that “The use of behavioural targeting is growing and is a massive benefit for advertisers wishing to serve more relevant ads. It also helps pay for content and services. But there is user confusion about how it works…Lack of understanding is the biggest problem facing behavioural targeting in the UK. There’s a knowledge gap between those who work in the industry and are familiar with terms such as cookies, remarketing and aggregated data, and users who search the web for information and goods. It’s our job, along with the rest of industry, to inform those users about how online advertising works and the choices they have.” 

But in reality, the industry–including Google–has failed to be candid with consumers and policymakers about all the data collection practices that are deployed-such as by Google subsidiaries Doubleclick, Admob, & Teracent, for example.

Microsoft is also very bullish about behavioral targeting–especially since it’s in a global digital fight with Google to deliver data-enriched ad targeting for the biggest brands.  In the same New Media Age issue [22 July 2010], Zuzanna Gierlinska, head of Microsoft Media Network at Microsoft Advertising explains that:  “We’re not saying you should use targeting - whether that’s behavioural targeting or re-messaging - just to push conversion.  But it can have a strong brand uplift. People come into a channel, see a nice creative with high-impact imagery and then go away. But that message stays with them.”  The article goes on to explain that: It’s this ability to talk to people on an ongoing basis, and give them a better experience, that’s the key to why combining re-messaging and behavioural targeting with a standard brand buy works, argues Gierlinska. For example, with re-messaging, users are already a warm lead, while behavioural targeting tightens the focus on users who are demonstrating an interest… This positive experience benefits both conversion and brand uplift among the target audience. “Targeting benefits everyone,” Gierlinska says. “It benefits the publisher because it’s not wasting impressions or serving ads to just anyone. It benefits the advertiser because it has efficiencies with its media buy. But it’s also really beneficial to the users because they’re getting relevant messaging that’s timely and ideally helping their productivity in what they’re doing online, rather than just being served random messages.”

Much of how the industry addresses the behavioral targeting and its related data mining application are rationalizations [maybe all their therapists are on vacation or Freudians!  Just kidding].  But it reflects a failure by industry leaders to recognize a serious problem that affects the public.  That’s the same kind of `it’s all good for us, regardless of what we do’ behavior that led to the recent–and ongoing–global financial collapse.

Some commentators–and groups funded by online marketers that target teens–are worried that proposals to the FTC and Congress that adolescent privacy be protected will somehow create a system that requires forms of age verification online.  The coalition of leading consumer, child advocacy, health and privacy organizations filing comments at the FTC last week aren’t calling for the parental permission paradigm used by the Children’s Online Privacy Protection Act [COPPA] be extended to teens.  But there are many online commercial services specifically targeting adolescents–that’s their target market.  It’s those sites and services specifically focused on adolescents that we want to have better privacy safeguards.   We want those sites to be governed by an opt-in regime that gives teen users meaningful control of how their information is collected and utilized.  Those sites should be required to engage in the Fair Information Principles known as  “data use minimization.”  Commercial sites targeting adolescents should make its data collection practices fully transparent and under the control by the teen (including a truly accessible privacy policy).  In another words, a privacy safeguard regime that really should be available for everyone.  Teens are ‘ground zero’ for much of digital marketing–for examples see our site: www.digitalads.org [especially the update section].  If you look at the reports on that site, you will see that the most recent scholarly thinking is that brain development in adolescents occurs much later than what was once thought.  They don’t have the ability to effectively understand the intent of highly sophisticated interactive marketing and the corresponding data collection which underlies contemporary digital advertising. That’s why empowering them so they can protect their privacy strengthens their rights.

Yesterday, the online ad lobby [IAB, ANA, DMA]–working with Chamber of Commerce–scored a major political victory by forcing the Financial reform bill conference committee to drop proposed provisions that would have strengthened the FTC.  Under the House bill, the FTC would have been given the same kind of regulatory authority most federal agencies have [APA rulemaking].  Marketers and advertisers are celebrating their win, because it keeps the FTC on a weakened and short political leash.  While consumer protection is significantly expanded because of the CFPB and new financial rules, the FTC is to remain largely hamstrung.  The online marketing and advertising lobby [including ANA, DMA–see below] were afraid that the newly invigorated FTC under Pres. Obama would require the industry to protect privacy online and also become more accountable to consumers engaged in e-commerce.   I heard IAB and Chamber are dancing in the streets! Congressmen Barney Frank, Henry Waxman and Sen. Rockefeller deserve praise for working hard to protect consumers, including their proposal on the FTC.

Here’s what two of the ad groups placed on their sites about the FTC issue:

Progress on FTC Enforcement Provisions in Wall Street Reform Conference

June 23, 2010

The marketing and media community has made substantial progress on defeating the broad expansion of FTC powers that is included in the House version of the Wall Street reform bill.  But we still need your assistance to keep these provisions out of the final bill.

Yesterday the Senate conferees presented an offer on the bill that rejected the new FTC powers that are in the House version.  Chairman Dodd indicated that while he may support changes in the Magnuson Moss rulemaking process, there is no Senate provision and these issues are too complex and important to be resolved in the context of the Wall Street reform bill.  Conferees hope to finish the conference this week so the final bill can be cleared for the President’s signature next month.

The House conferees may still continue to push for these provisions, so it is very important that marketers contact the Senate conferees to express our appreciation for their support and to urge them to remain strongly opposed to these new powers for the FTC in this bill.  Contact information for the Senate conferees is located here and our letter to Senate conferees is available here.  Please let the Senators know if you have plants or operations in their states.

ANA took part in a very important meeting yesterday with Senate Commerce Committee Chairman Jay Rockefeller on these issues.  We argued that these issues are very important to the entire marketing community and deserve careful consideration outside of the context of the Wall Street reform bill.  The Chairman strongly indicated that he will continue to push for changes in the Magnuson Moss rulemaking procedures this year.

If you have any questions about this matter, please contact Dan Jaffe (djaffe@ana.net) or Keith Scarborough (kscarborough@ana.net) in ANA’s Washington, DC office at (202) 296-1883.

http://www.ana.net/advocacy/content/2418

DMA Asks Financial Reform Conferees to Keep FTC Expansion Out of ‘Restoring American Financial Stability Act’

June 10, 2010 — The Direct Marketing Association (DMA) today was joined by 47 other trade associations and business coalitions in sending a letter to each of the conferees on H.R. 4173, the “Restoring American Financial Stability Act” (RAFSA), urging them to keep language that would dramatically expand the powers of the Federal Trade Commission (FTC) out of the final bill.

As the House and Senate conferees work to reconcile their versions of the financial regulatory legislation, the associations — which represent hundreds of thousands of US companies from a wide array of industry segments — expressed strong opposition to provisions in the House version of the bill that would expand the FTC’s rulemaking and enforcement authority over virtually every sector of the American economy.

“The balance struck in the Senate bill is the right one,” said Linda Woolley, DMA’s executive vice president, government affairs.  “That bill makes the most sense in the context of financial reform legislation, maintaining the FTC’s existing jurisdiction without expanding its rulemaking and enforcement authority over industries and sectors that had nothing to do with the financial crisis.  Issues of FTC expansion deserve their own due consideration and debate in the more appropriate context of an FTC reauthorization, as has been done in the past.”

DMA and the other associations strongly believe that granting the FTC broad new authority is not a necessary or relevant response to the causes of the recent recession and, therefore, asked the conferees to oppose the inclusion of any provisions that would expand FTC authority, rather than making changes to the Commission that would have a fundamental impact on the entire business community and the broader American economy.

For more information please visit www.dmaaction.org.
http://www.the-dma.org/cgi/dispannouncements?article=1449