The Federal Trade Commission has partnered with Visa and the Better Business Bureau to issue an alert warning consumers about misleading offers for "free" trial subscriptions online that can quickly -- and quietly -- turn into expensive commitments.
The FTC's Bureau of Consumer Protection Director, David Vladeck, held a press conference last week with officials from the BBB and Visa executives to call attention to offers that contain a so-called "negative option." Such offers require the consumer to opt out of a hidden agreement in order to avoid getting charged.
"Free trial marketing can be convenient for consumers -- if the terms are clearly spelled out beforehand," Vladeck said. "Legitimate marketers don't hide critical information about costs or cancellation policies to get their customers to agree to future charges."
The FTC reached a settlement in November with a company called Commerce Planet that offered consumers a "free online auction kit" that would teach them to make money selling items on sites like eBay. The FTC charged that Commerce Planet did not make it clear that by signing up to receive the auction kit, customers were also signing up for the company's $59.95 per month "Online Supplier" program if they didn't cancel within a few days of the order.
In August, the commission shut down a number of sites that were offering free help getting consumers grant money from the government. Consumers found themselves on the hook for up to $70 a month for services from health insurance plans to identity theft protection if they didn't opt out quickly.
The alert issued by the FTC included tips for protecting against such scams, including being aware of pre-checked boxes when signing up for free offers and reading the fine print of every offer closely. Visa also set up a Web site, where consumers can go for more option.
Monday, December 21, 2009
Friday, December 18, 2009
Facebook Privacy Changes Break the Law, Privacy Groups Tell FTC
A coalition of privacy groups asked regulators Thursday to investigate controversial new privacy settings on Facebook, saying recent changes in how the massive social networking site treats customer data violate federal consumer protection laws.
The complaint, filed by the Electronic Privacy Information Center (EPIC), says the changes significantly cut back customer privacy controls by forcing into the public eye certain information that they could previously restrict. Under the new policy, a user’s profile picture, current city, gender and friend and fan page lists are automatically public for all users, with little option to limit who is able to see this information. Additionally, Facebook set more defaults to its public setting, hoping users will start sharing information, such as their status updates, with the entire internet rather than limited sets of hand selected family members or friends — a clear effort to compete with Twitter by serving more real time customer data.
The changes “violate user expectations, diminish user privacy, and contradict. Facebook’s own representations,” EPIC charges (.pdf). The complaint asks the Federal Trade Commission to “determine the extent of the harm to consumer privacy and safety, require Facebook to restore privacy settings that were previously available…, require Facebook to give users meaningful control over personal information, and seek appropriate injunctive and compensatory relief.”
The challenge raises the stakes for Facebook, the world’s largest social-networking site, which has been trying to ride out a vocal backlash against what some see as a blatant attempt to push users into sharing publicly and often. It will also serve as a test case for the FTC under the Obama Administration, forcing the agency to show whether it will remain focused on scams with provable harms, or become a more interventionist player in the market as the FCC has become with telecommunications companies.
EPIC was joined in its complaint by a coalition of interest groups, including the Center for Digital Democracy, the American Library Association and the Privacy Rights Clearinghouse.
EPIC’s director Marc Rotenberg described the complaint as the most significant one facing the FTC, which is now headed by Jon Leibowitz. He is considered to be more sympathetic to privacy issues, and the FTC just signaled as much by holding a series of open-ended privacy hearings earlier this month.
“More than 100 million people in the United States subscribe to the Facebook service,” Rotenberg said. “The company should not be allowed to turn down the privacy dial on so many American consumers.”
But Facebook spokesman Andrew Noyes says the company discussed the changes with the FTC, privacy groups and the public ahead of time.
“We’ve had productive discussions with dozens of organizations around the world about the recent changes and we¹re disappointed that EPIC has chosen to share their concerns with the FTC while refusing to talk to us about them,” said Noyes, a longtime DC tech policy reporter who joined Facebook this fall. “The new tools offer users the opportunity to decide on privacy with every photo, link or status update they wish to post, so the process of personalizing privacy on Facebook will continue.”
The complaint comes just a day after privacy groups had a behind-the-scenes briefing with Facebook lawyers. Those included Tim Sparapani, who joined Facebook in the spring after working for several years as the ACLU’s top lobbyist battling government spying bills.
In the presentation, Facebook told the groups that as of Monday 220 million users had used its privacy settings transition wizard. Of those, about 40 percent are changing the defaults settings, while about 50 percent are opting to stick with Facebook’s new, more public default choices.
The Center for Digital Democracy’s Jeff Chester called Facebook’s definition of privacy “self-serving and narrow” and that the company’s intention is to get users to share as much as possible, in part to allow for more targeted advertising.
“They don’t disclose that consumer data is being used for very sophisticated marketing and targeting,” Chester said. “The Obama administration will have to be the cop on the beat.”
While the Electronic Frontier Foundation did not sign onto the complaint, EFF lawyer Kevin Bankston described his group’s concerns as similar.
“The complaint raises important questions about Facebook’s privacy practices that echo EFF’s own concerns, and I expect that the FTC will seriously consider opening an investigation,” Bankston said.
Bankston wrote an influential critique of the changes last week, but his concerns were largely dismissed by a Facebook spokesman who called Bankston part of a tiny minority who used a feature blocking third-party developers from accessing any of their data when a friend installs an application.
But Bankston is hardly alone in his criticism.
Facebook’s own posts on the privacy changes have more than 2,000 comments, most negative. Meanwhile, purely grassroots protest groups such as “Against The New Facebook Privacy Settings!” and “Facebook! Fix the Privacy Settings” have formed inside Facebook, demanding that Facebook roll back the changes.
While the FTC is a complaint-driven agency, it does not disclose when or if it opens investigations. A previous FTC complaint by EPIC regarding the data marketing industry led to record fines.
A Facebook spokesman did not return a call seeking comment by press time
The complaint, filed by the Electronic Privacy Information Center (EPIC), says the changes significantly cut back customer privacy controls by forcing into the public eye certain information that they could previously restrict. Under the new policy, a user’s profile picture, current city, gender and friend and fan page lists are automatically public for all users, with little option to limit who is able to see this information. Additionally, Facebook set more defaults to its public setting, hoping users will start sharing information, such as their status updates, with the entire internet rather than limited sets of hand selected family members or friends — a clear effort to compete with Twitter by serving more real time customer data.
The changes “violate user expectations, diminish user privacy, and contradict. Facebook’s own representations,” EPIC charges (.pdf). The complaint asks the Federal Trade Commission to “determine the extent of the harm to consumer privacy and safety, require Facebook to restore privacy settings that were previously available…, require Facebook to give users meaningful control over personal information, and seek appropriate injunctive and compensatory relief.”
The challenge raises the stakes for Facebook, the world’s largest social-networking site, which has been trying to ride out a vocal backlash against what some see as a blatant attempt to push users into sharing publicly and often. It will also serve as a test case for the FTC under the Obama Administration, forcing the agency to show whether it will remain focused on scams with provable harms, or become a more interventionist player in the market as the FCC has become with telecommunications companies.
EPIC was joined in its complaint by a coalition of interest groups, including the Center for Digital Democracy, the American Library Association and the Privacy Rights Clearinghouse.
EPIC’s director Marc Rotenberg described the complaint as the most significant one facing the FTC, which is now headed by Jon Leibowitz. He is considered to be more sympathetic to privacy issues, and the FTC just signaled as much by holding a series of open-ended privacy hearings earlier this month.
“More than 100 million people in the United States subscribe to the Facebook service,” Rotenberg said. “The company should not be allowed to turn down the privacy dial on so many American consumers.”
But Facebook spokesman Andrew Noyes says the company discussed the changes with the FTC, privacy groups and the public ahead of time.
“We’ve had productive discussions with dozens of organizations around the world about the recent changes and we¹re disappointed that EPIC has chosen to share their concerns with the FTC while refusing to talk to us about them,” said Noyes, a longtime DC tech policy reporter who joined Facebook this fall. “The new tools offer users the opportunity to decide on privacy with every photo, link or status update they wish to post, so the process of personalizing privacy on Facebook will continue.”
The complaint comes just a day after privacy groups had a behind-the-scenes briefing with Facebook lawyers. Those included Tim Sparapani, who joined Facebook in the spring after working for several years as the ACLU’s top lobbyist battling government spying bills.
In the presentation, Facebook told the groups that as of Monday 220 million users had used its privacy settings transition wizard. Of those, about 40 percent are changing the defaults settings, while about 50 percent are opting to stick with Facebook’s new, more public default choices.
The Center for Digital Democracy’s Jeff Chester called Facebook’s definition of privacy “self-serving and narrow” and that the company’s intention is to get users to share as much as possible, in part to allow for more targeted advertising.
“They don’t disclose that consumer data is being used for very sophisticated marketing and targeting,” Chester said. “The Obama administration will have to be the cop on the beat.”
While the Electronic Frontier Foundation did not sign onto the complaint, EFF lawyer Kevin Bankston described his group’s concerns as similar.
“The complaint raises important questions about Facebook’s privacy practices that echo EFF’s own concerns, and I expect that the FTC will seriously consider opening an investigation,” Bankston said.
Bankston wrote an influential critique of the changes last week, but his concerns were largely dismissed by a Facebook spokesman who called Bankston part of a tiny minority who used a feature blocking third-party developers from accessing any of their data when a friend installs an application.
But Bankston is hardly alone in his criticism.
Facebook’s own posts on the privacy changes have more than 2,000 comments, most negative. Meanwhile, purely grassroots protest groups such as “Against The New Facebook Privacy Settings!” and “Facebook! Fix the Privacy Settings” have formed inside Facebook, demanding that Facebook roll back the changes.
While the FTC is a complaint-driven agency, it does not disclose when or if it opens investigations. A previous FTC complaint by EPIC regarding the data marketing industry led to record fines.
A Facebook spokesman did not return a call seeking comment by press time
Privacy Groups To FTC: 'We Want Old Facebook Settings Back'
Consumer advocates have asked the Federal Trade Commission to order Facebook to bring back its former privacy settings.
In a complaint filed Thursday, the Electronic Privacy Information Center and nine other groups allege that Facebook's controversial new privacy settings "violate user expectations, diminish user privacy, and contradict Facebook's own representations." The advocacy organizations, including The Center for Digital Democracy, Consumer Federation of America and the American Library Association, say that Facebook's change in terms are a deceptive and unfair business practice.
"We fully respect that some people want to be fully public, which is fine, but other people need gradations of privacy and Facebook has made it more difficult for people who need those gradations to keep them," said Marc Rotenberg, executive director of the EPIC.
Last week, Facebook unveiled new privacy settings that for the first time, classify a host of data as "publicly available information." Included in that category are users' names, profile pictures, cities, networks, lists of friends and pages people are fans of.
Facebook users can still avoid displaying their friends lists, but the controls to do so are no longer located with the other privacy settings. Instead, people who want to keep the names of their friends from appearing must go to the profile section, click on an icon next to their friend list, and uncheck the "show my friends on my profile" box.
Even when Facebook users complete that procedure, application developers nonetheless have access to all "publicly available information" about users.
Privacy advocates say these changes potentially harm people because information about their friends can be used for questionable purposes. For instance, the complaint references MIT's "gaydar" research, which involved figuring out who was gay based on their Facebook friends.
Another area of contention involves the default settings. When Facebook rolled out its revised privacy controls, it asked members to review their settings, but also changed most defaults to share-with-everyone. The upshot was that some members who previously restricted access to their pictures, status updates and other information are now giving all Web users access to it.
Rotenberg says this shift wasn't fair to Facebook's members. "It's a little bit like opting out of a list, and then having the company opt you back in and saying, 'Well you can just opt out again,'" he says.
Privacy advocate Jeff Chester, executive director of The Center for Digital Democracy, says he's particularly troubled by Facebook's share-everything default standard. "Facebook is boldly redefining the concept of privacy for all Americans," he said. "Facebook is consciously devaluing the notion of privacy for its own interests."
A Facebook spokesperson said the company met with outside parties, including the FTC, before revising its privacy settings. "We've had productive discussions with dozens of organizations around the world about the recent changes and we're disappointed that EPIC has chosen to share their concerns with the FTC while refusing to talk to us about them," a spokesperson said.
Rotenberg said that his organization met with Facebook on Wednesday for over an hour. "I walked out of the meeting and concluded that they didn't understand," Rotenberg said.
In a complaint filed Thursday, the Electronic Privacy Information Center and nine other groups allege that Facebook's controversial new privacy settings "violate user expectations, diminish user privacy, and contradict Facebook's own representations." The advocacy organizations, including The Center for Digital Democracy, Consumer Federation of America and the American Library Association, say that Facebook's change in terms are a deceptive and unfair business practice.
"We fully respect that some people want to be fully public, which is fine, but other people need gradations of privacy and Facebook has made it more difficult for people who need those gradations to keep them," said Marc Rotenberg, executive director of the EPIC.
Last week, Facebook unveiled new privacy settings that for the first time, classify a host of data as "publicly available information." Included in that category are users' names, profile pictures, cities, networks, lists of friends and pages people are fans of.
Facebook users can still avoid displaying their friends lists, but the controls to do so are no longer located with the other privacy settings. Instead, people who want to keep the names of their friends from appearing must go to the profile section, click on an icon next to their friend list, and uncheck the "show my friends on my profile" box.
Even when Facebook users complete that procedure, application developers nonetheless have access to all "publicly available information" about users.
Privacy advocates say these changes potentially harm people because information about their friends can be used for questionable purposes. For instance, the complaint references MIT's "gaydar" research, which involved figuring out who was gay based on their Facebook friends.
Another area of contention involves the default settings. When Facebook rolled out its revised privacy controls, it asked members to review their settings, but also changed most defaults to share-with-everyone. The upshot was that some members who previously restricted access to their pictures, status updates and other information are now giving all Web users access to it.
Rotenberg says this shift wasn't fair to Facebook's members. "It's a little bit like opting out of a list, and then having the company opt you back in and saying, 'Well you can just opt out again,'" he says.
Privacy advocate Jeff Chester, executive director of The Center for Digital Democracy, says he's particularly troubled by Facebook's share-everything default standard. "Facebook is boldly redefining the concept of privacy for all Americans," he said. "Facebook is consciously devaluing the notion of privacy for its own interests."
A Facebook spokesperson said the company met with outside parties, including the FTC, before revising its privacy settings. "We've had productive discussions with dozens of organizations around the world about the recent changes and we're disappointed that EPIC has chosen to share their concerns with the FTC while refusing to talk to us about them," a spokesperson said.
Rotenberg said that his organization met with Facebook on Wednesday for over an hour. "I walked out of the meeting and concluded that they didn't understand," Rotenberg said.
Thursday, December 17, 2009
AGs urge FTC to require stricter advertising disclosures
WASHINGTON (Legal Newsline)-The Federal Trade Commission needs to do more to strengthen consumer protections to prevent deceptive marketing of so-called free credit reports, 42 state attorneys general said in a letter to regulators.
While the bipartisan group of attorneys general said they support several of the changes proposed by the FTC, they would like to see regulators adopt more stringent disclosures.
"We believe that advertising restrictions and mandatory disclosures are necessary to ensure that consumers are not misled or confused by advertisements and offers for 'free' credit reports and are able to easily obtain their free annual credit reports," the letter sent this week said.
Federal law allows consumers to obtain one free credit report from each of the three major bureaus: Equifax, TransUnion and Experian. Consumers may request a report at www.annualcreditreport.com or by calling 1-877-322-8228.
But there are sound-alike Web sites where consumers can be misled, the attorneys general said in their Dec. 7 letter. They point out www.freecreditreport.com, which is owned by Experian, as an example.
"Consumers file complaints stating they did not understand that by accessing their free credit report, they had signed up for a service that automatically charged a specific amount per month for credit monitoring," the attorneys general wrote.
The Federal Trade Commission is proposing that television and radio commercials for "free" credit reports must disclose: "This is not the free credit report provided for by federal law."
The states, however, want advertisers to go a step further, and include the statement: "This report is only free if you make a purchase."
Print and Web ads would require similar disclosures and list the phone number and Web site for requesting the government-mandated free reports.
The attorneys general and the FTC also want to ban hyperlinks to commercial Web sites from www.annualcreditreport.com and prohibit marketing for paid services or products until after a consumer has received the free credit report.
Washington Attorney General is among the letter's 43 signatories. He said in a statement that more needs to be done to protect consumers.
"Credit reports are crucial in helping consumers detect whether they've become victims of identity theft or credit fraud," McKenna said. "Credit reporting agencies are required to provide you a free copy of your report, but some see this as an opportunity to sell additional products. Under the law, 'free' means 'at no cost,' not 'free with a purchase.'"
The AGs' letter was sent by the National Association of Attorneys General, of which McKenna, a Republican, is the vice president.
Signatories on the letter in addition to McKenna were the attorneys general of: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Guam, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont and West Virginia
While the bipartisan group of attorneys general said they support several of the changes proposed by the FTC, they would like to see regulators adopt more stringent disclosures.
"We believe that advertising restrictions and mandatory disclosures are necessary to ensure that consumers are not misled or confused by advertisements and offers for 'free' credit reports and are able to easily obtain their free annual credit reports," the letter sent this week said.
Federal law allows consumers to obtain one free credit report from each of the three major bureaus: Equifax, TransUnion and Experian. Consumers may request a report at www.annualcreditreport.com or by calling 1-877-322-8228.
But there are sound-alike Web sites where consumers can be misled, the attorneys general said in their Dec. 7 letter. They point out www.freecreditreport.com, which is owned by Experian, as an example.
"Consumers file complaints stating they did not understand that by accessing their free credit report, they had signed up for a service that automatically charged a specific amount per month for credit monitoring," the attorneys general wrote.
The Federal Trade Commission is proposing that television and radio commercials for "free" credit reports must disclose: "This is not the free credit report provided for by federal law."
The states, however, want advertisers to go a step further, and include the statement: "This report is only free if you make a purchase."
Print and Web ads would require similar disclosures and list the phone number and Web site for requesting the government-mandated free reports.
The attorneys general and the FTC also want to ban hyperlinks to commercial Web sites from www.annualcreditreport.com and prohibit marketing for paid services or products until after a consumer has received the free credit report.
Washington Attorney General is among the letter's 43 signatories. He said in a statement that more needs to be done to protect consumers.
"Credit reports are crucial in helping consumers detect whether they've become victims of identity theft or credit fraud," McKenna said. "Credit reporting agencies are required to provide you a free copy of your report, but some see this as an opportunity to sell additional products. Under the law, 'free' means 'at no cost,' not 'free with a purchase.'"
The AGs' letter was sent by the National Association of Attorneys General, of which McKenna, a Republican, is the vice president.
Signatories on the letter in addition to McKenna were the attorneys general of: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Guam, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont and West Virginia
Government Working Group Recommends Nutritional Marketing Standards
Guidelines would prevent marketing of some foods to children
By John Eggerton -- Broadcasting & Cable, 12/16/2009 11:11:21 AM
According to new proposed government guidelines, cereals with more than 13 grams of added sugar could not be marketed to kids and food that could be marketed to children would have to contain at least 50% of one or more of the following: fruit, vegetable, whole grain, fat-free or low-fat milk or yogurt, fish, extra lean meat or poultry, eggs, nuts and seeds, or beans
As expected, an interagency group comprising representatives of the FTC, Food and Drug Administration, Centers for Disease Control and Prevention, and the U.S. Department of Agriculture, submitted recommendations on new nutrition guidelines for marketing food to kids.
That announcement came late Tuesday following an FTC hearing on food marketing to kids.
Exempt from any restrictions on marketing would be fruits, vegetables, juices, non-or low-fat milk, yogurt, whole grains and water.
The working group still has to decide what media the guidelines should apply to and must give the public an opportunity to comment. The group must produce a final report for Congress by July 15, 2010.
By John Eggerton -- Broadcasting & Cable, 12/16/2009 11:11:21 AM
According to new proposed government guidelines, cereals with more than 13 grams of added sugar could not be marketed to kids and food that could be marketed to children would have to contain at least 50% of one or more of the following: fruit, vegetable, whole grain, fat-free or low-fat milk or yogurt, fish, extra lean meat or poultry, eggs, nuts and seeds, or beans
As expected, an interagency group comprising representatives of the FTC, Food and Drug Administration, Centers for Disease Control and Prevention, and the U.S. Department of Agriculture, submitted recommendations on new nutrition guidelines for marketing food to kids.
That announcement came late Tuesday following an FTC hearing on food marketing to kids.
Exempt from any restrictions on marketing would be fruits, vegetables, juices, non-or low-fat milk, yogurt, whole grains and water.
The working group still has to decide what media the guidelines should apply to and must give the public an opportunity to comment. The group must produce a final report for Congress by July 15, 2010.
Federal Group Proposes Curbs on Marketing Food to Kids
WASHINGTON -- A working group made up of officials from several federal regulatory agencies Tuesday proposed restricting marketing of foods and beverages that contain significant amounts of sugar, sodium and saturated fat, in response to concerns about childhood obesity.
Food marketing to children should be limited to foods that provide a "meaningful contribution to a healthful diet," the proposals say.
The recommendations of the group, which was created by Congress, reflect concerns that current marketing practices are influencing children's eating habits.
Federal Trade Commission Chairman Jon Leibowitz and public health advocates have expressed concern that the food industry isn't doing enough to limit the marketing of unhealthy foods to children.
David C. Vladeck, director of the FTC's consumer protection bureau, stressed that the proposals aren't regulations and aren't binding.
Still, he said companies should pay attention because if they don't take the lead on changing food marketing practices, "Congress may decide for all of us."
The recommendations will be sent to Congress next year, after a public comment period.
The Grocery Manufacturers Association, which represents makers of packaged foods, said its members have voluntarily reduced the number of advertisements aimed at children while increasingly shifting the advertising aimed at them to more healthful products.
"GMA and its members have a longstanding commitment to help arrest and reverse obesity trends around the world," Mary Sophos, GMA's senior vice president and chief government affairs officer, said in a statement. "Our efforts are having an impact and we will continue to do our part."
The foods and beverages that could be affected if the proposed marketing restrictions became law include most sodas, candies, cookies, cereals and some types of yogurt, said Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest.
Dan Jaffe, a government relations official from the Association of National Advertisers, said the standards, if adopted, would be complicated to follow. The proposals "will affect a lot of our members and will have a broad impact on the advertising community," he said.
The group that made the recommendations includes officials from the FTC, the U.S. Food and Drug Administration and the Centers for Disease Control and Prevention.
Before the recommendations were announced, Mr. Leibowitz, the FTC chairman, praised the more than 16 companies, including McDonald's Corp., Burger King Holdings Inc. and General Mills Inc., that have pledged to shift food ads aimed at children to include healthier foods.
He criticized other companies that heavily market foods to children but haven't signed similar pledges.
Elaine Kolish, director of the Children's Food and Beverage Advertising Initiative at the Council of Better Business Bureaus, said industry self-regulation is working.
"The companies have done exactly what they've pledged to do, and more. The goal post may be moving, and I recognize this," she said.
—Ilan Brat contributed to this article.
Food marketing to children should be limited to foods that provide a "meaningful contribution to a healthful diet," the proposals say.
The recommendations of the group, which was created by Congress, reflect concerns that current marketing practices are influencing children's eating habits.
Federal Trade Commission Chairman Jon Leibowitz and public health advocates have expressed concern that the food industry isn't doing enough to limit the marketing of unhealthy foods to children.
David C. Vladeck, director of the FTC's consumer protection bureau, stressed that the proposals aren't regulations and aren't binding.
Still, he said companies should pay attention because if they don't take the lead on changing food marketing practices, "Congress may decide for all of us."
The recommendations will be sent to Congress next year, after a public comment period.
The Grocery Manufacturers Association, which represents makers of packaged foods, said its members have voluntarily reduced the number of advertisements aimed at children while increasingly shifting the advertising aimed at them to more healthful products.
"GMA and its members have a longstanding commitment to help arrest and reverse obesity trends around the world," Mary Sophos, GMA's senior vice president and chief government affairs officer, said in a statement. "Our efforts are having an impact and we will continue to do our part."
The foods and beverages that could be affected if the proposed marketing restrictions became law include most sodas, candies, cookies, cereals and some types of yogurt, said Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest.
Dan Jaffe, a government relations official from the Association of National Advertisers, said the standards, if adopted, would be complicated to follow. The proposals "will affect a lot of our members and will have a broad impact on the advertising community," he said.
The group that made the recommendations includes officials from the FTC, the U.S. Food and Drug Administration and the Centers for Disease Control and Prevention.
Before the recommendations were announced, Mr. Leibowitz, the FTC chairman, praised the more than 16 companies, including McDonald's Corp., Burger King Holdings Inc. and General Mills Inc., that have pledged to shift food ads aimed at children to include healthier foods.
He criticized other companies that heavily market foods to children but haven't signed similar pledges.
Elaine Kolish, director of the Children's Food and Beverage Advertising Initiative at the Council of Better Business Bureaus, said industry self-regulation is working.
"The companies have done exactly what they've pledged to do, and more. The goal post may be moving, and I recognize this," she said.
—Ilan Brat contributed to this article.
FTC Sues Intel Corp. For Creating Jobs ( I mean For Monolopy)
FTC Sues Intel Corp. For Monopoly Abuse – Intel Corp. is being sued by the government.The U.S. Federal Trade Commission has announced earlier today that they are suing Intel for “anticompetitive tactics”.FTC officials said:
Intel not only used improper tactics against Advanced Micro Devices Inc.—its longtime competitor in microprocessors—but add allegations that Intel improperly quashed competition from Nvidia Corp. in graphics processing units, or GPUs. Those chips control three-dimensional images in computer games as well as display video on computers, and are increasingly seen an alternative to microprocessors.
See the FTC Press Release
Intel not only used improper tactics against Advanced Micro Devices Inc.—its longtime competitor in microprocessors—but add allegations that Intel improperly quashed competition from Nvidia Corp. in graphics processing units, or GPUs. Those chips control three-dimensional images in computer games as well as display video on computers, and are increasingly seen an alternative to microprocessors.
See the FTC Press Release
Friday, December 11, 2009
Thursday, December 10, 2009
Report: Web Application Security Trends Report
Read the full report: Web Application Security Trends Report
Court Ruling Could Point To Hole In Google's PPC Ad Trademark Infringement Policy
Does a loophole exist in Google and in U.S. trademark policies? In one instance, the company Experian Information Solutions bought a variety of phrases containing two keywords trademarked by its competitor Fair Isaac Corporation. Experian didn't use the words in paid ads, but to drive search traffic to its PPC ads instead. Fair Isaac then sued Experian for trademark infringement, but the judge ruled in favor of the defendant, noting that in order to prove infringement Fair Isaac would have had to show that consumers were confused about the ad they clicked on.
It appears Google's policy may suggest companies can bid on, but not insert keywords in a paid click ad for competitive reasons, unless the two companies have a direct relationship. Since evidence of consumer confusion is what's needed to prove trademark infringement in a court of law, it's unlikely that could happen if the words didn't actually appear in the ad, argue two White & Case attorneys working for Experian.
The legal landscape in the United States remains unsettled, so companies shouldn't feel free to purchase competitors' trademark keywords and use them in ads, according to White & Case Attorney Christopher Glancy. "The fact of the matter is someone could still file a trademark suit and survive a motion to dismiss simply based on the purchase of the keywords, but this case does suggest the direction the law is moving," he says. "There ought to be a clean rule that says the purchase of a keyword, alone, is not trademark infringement, as the European Court Justice seems to deem."
The Advocate General of the European Court of Justice issued an opinion in September that keyword advertising is not trademark infringement under European Law, Glancy explains.
The Court of Justice has yet to rule on it, but the Advocate General's opinion submitted to the court suggests keyword advertising is no longer a trademark infringement and that the European Union will adopt this new policy, Glancy says. "This case may signal a similar direction in the United States," he says. "We now have three published decisions that have found no infringement [from] the mere purchase of the keyword."
As for Google, in the United States the search engine doesn't monitor the use of trademarked terms as keywords, according to a source. The source goes on to explain that Google does allow some ads to serve up with a trademark keyword in the ad text if the ad is from a reseller or from an informational site. (You can find the policy here.)
If further investigation finds the advertiser uses the trademark in the ad text as a competitive weapon, using it critically or negatively, Google will require the advertiser to remove the trademark and prevent them from using it in similar ad text in the future.
White & Case Attorney Jack Pace explains Experian began purchasing variations of the keywords Fair Isaac and FICO in 2002. Ads, which did not contain the words, ran on Google, Yahoo, MSN and Ask search engines. In 2005, the company curtailed its PPC campaign substantially, limiting the number of keywords it purchased. Experian continued to purchase a few keywords until mid-2007, but stopped because Fair Isaac had initiated the lawsuit.
The significance in the Experian District Court trial, which concluded on Nov. 20, suggests a growing understanding that keyword advertising, alone, does not likely cause consumer confusion. There must be something more. The U.S. District Judge issued a ruling on the keyword-advertising claim Nov. 25. The litigation, ranging from keyword trademark infringement, to antitrust claims, ran for about three years.
It appears Google's policy may suggest companies can bid on, but not insert keywords in a paid click ad for competitive reasons, unless the two companies have a direct relationship. Since evidence of consumer confusion is what's needed to prove trademark infringement in a court of law, it's unlikely that could happen if the words didn't actually appear in the ad, argue two White & Case attorneys working for Experian.
The legal landscape in the United States remains unsettled, so companies shouldn't feel free to purchase competitors' trademark keywords and use them in ads, according to White & Case Attorney Christopher Glancy. "The fact of the matter is someone could still file a trademark suit and survive a motion to dismiss simply based on the purchase of the keywords, but this case does suggest the direction the law is moving," he says. "There ought to be a clean rule that says the purchase of a keyword, alone, is not trademark infringement, as the European Court Justice seems to deem."
The Advocate General of the European Court of Justice issued an opinion in September that keyword advertising is not trademark infringement under European Law, Glancy explains.
The Court of Justice has yet to rule on it, but the Advocate General's opinion submitted to the court suggests keyword advertising is no longer a trademark infringement and that the European Union will adopt this new policy, Glancy says. "This case may signal a similar direction in the United States," he says. "We now have three published decisions that have found no infringement [from] the mere purchase of the keyword."
As for Google, in the United States the search engine doesn't monitor the use of trademarked terms as keywords, according to a source. The source goes on to explain that Google does allow some ads to serve up with a trademark keyword in the ad text if the ad is from a reseller or from an informational site. (You can find the policy here.)
If further investigation finds the advertiser uses the trademark in the ad text as a competitive weapon, using it critically or negatively, Google will require the advertiser to remove the trademark and prevent them from using it in similar ad text in the future.
White & Case Attorney Jack Pace explains Experian began purchasing variations of the keywords Fair Isaac and FICO in 2002. Ads, which did not contain the words, ran on Google, Yahoo, MSN and Ask search engines. In 2005, the company curtailed its PPC campaign substantially, limiting the number of keywords it purchased. Experian continued to purchase a few keywords until mid-2007, but stopped because Fair Isaac had initiated the lawsuit.
The significance in the Experian District Court trial, which concluded on Nov. 20, suggests a growing understanding that keyword advertising, alone, does not likely cause consumer confusion. There must be something more. The U.S. District Judge issued a ruling on the keyword-advertising claim Nov. 25. The litigation, ranging from keyword trademark infringement, to antitrust claims, ran for about three years.
Tuesday, December 8, 2009
Yahoo! Prices Member Privacy at $60, Army Advancing Armor Research
West Palm Beach, FL (AHN) - For some, it is a comfort to know that Yahoo will work with law enforcement if necessary to catch criminals, rifling through their private messages to get the job done. However, the cost for such an invasion -- $60.
For $20, Yahoo will turn over to authorities basic user ID information. Between $30 and $40, they will give contents of subscriber accounts, including e-mail. And for $60, authorities can obtain access to all the contents to an account, including logs of Yahoo Groups.
But Yahoo is not the only company cooperating with authorities in this manner. In 2008, government officials made 8 million requests for to Sprint to turn over GPS information.
Matthew Sullivan, Sprint Nextel, in a letter to All Headline News explains that figure:
"The '8 million' figure does not represent the number of customers whose location information was provided to law enforcement, nor does it represent the instances or cases in which law enforcement contacted Sprint seeking customer location information.
Instead, the figure represents the number of individual automated requests, or "pings", for specific location information, made to the Sprint network as part of a series of law enforcement investigations and public safety assistance requests during the past year.
The critical point is that a single case or investigation may generate thousands of individual requests to the network as the law enforcement or public safety agency attempts to track or locate an individual over the course of days or weeks.
As a result, the 8 million automated requests or pings were generated by thousands (not millions) of instances in which law enforcement or public safety agencies sought customer location information.
Several thousand instances over the course of a year should not be shocking given that Sprint has more than 47 million customers and requests from law enforcement and public safety agencies are due to a variety of circumstances: exigent or emergency situations (missing person cases), criminal investigations, or cases where a Sprint customer consents to sharing location information (car is stolen and owner realizes his phone is in the car so he allows law enforcement to track his phone).
In all cases Sprint requires a valid legal request appropriate for the circumstances, meaning the request must be accompanied by either a subpoena, court order or customer consent. In all cases, Sprint complies with applicable state and federal laws."
For $20, Yahoo will turn over to authorities basic user ID information. Between $30 and $40, they will give contents of subscriber accounts, including e-mail. And for $60, authorities can obtain access to all the contents to an account, including logs of Yahoo Groups.
But Yahoo is not the only company cooperating with authorities in this manner. In 2008, government officials made 8 million requests for to Sprint to turn over GPS information.
Matthew Sullivan, Sprint Nextel, in a letter to All Headline News explains that figure:
"The '8 million' figure does not represent the number of customers whose location information was provided to law enforcement, nor does it represent the instances or cases in which law enforcement contacted Sprint seeking customer location information.
Instead, the figure represents the number of individual automated requests, or "pings", for specific location information, made to the Sprint network as part of a series of law enforcement investigations and public safety assistance requests during the past year.
The critical point is that a single case or investigation may generate thousands of individual requests to the network as the law enforcement or public safety agency attempts to track or locate an individual over the course of days or weeks.
As a result, the 8 million automated requests or pings were generated by thousands (not millions) of instances in which law enforcement or public safety agencies sought customer location information.
Several thousand instances over the course of a year should not be shocking given that Sprint has more than 47 million customers and requests from law enforcement and public safety agencies are due to a variety of circumstances: exigent or emergency situations (missing person cases), criminal investigations, or cases where a Sprint customer consents to sharing location information (car is stolen and owner realizes his phone is in the car so he allows law enforcement to track his phone).
In all cases Sprint requires a valid legal request appropriate for the circumstances, meaning the request must be accompanied by either a subpoena, court order or customer consent. In all cases, Sprint complies with applicable state and federal laws."
Monday, December 7, 2009
One-Third May Be Open To Behavioral Tracking
Nearly a third (32%) of Americans say they would be open to having their Web-surfing and television viewing habits monitored in order to receive ads more relevant to their interests -- as long as the data collected could not identify them as individuals, according to a global study of consumer media habits and advertising attitudes conducted by market research firm Synovate.
Another 8% said they would be open to such monitoring with "few, if any, concerns."
However, 35% said they would reject such technology because they would be concerned about monitoring services collecting data about them, and 9% said that they are not interested in changing the ads to which they are exposed.
On a worldwide basis, 11% expressed acceptance with few or no concerns, 26% indicated openness if individual identities were protected, 27% indicated rejection on the basis of privacy concerns, and 16% said they are not interested in changing the ads to which they are exposed.
The survey was conducted in September among consumers in the U.S. and 10 other countries. The U.S. survey took place online, and the 500 respondents comprised a representative national sample, according to Synovate.
The results confirm that consumers are taking steps to avoid advertising, and that this behavior varies by medium. For instance, 41% report that they are avoiding Web sites with intrusive ads or pop-ups more frequently than they did a year ago (9% are doing this less frequently, and 37% have not changed the frequency of this behavior). Even more (44%) are more frequently skipping ads when watching TV or listening to radio (5% are doing this less frequently, and 46% have not changed this behavior).
Here's a summary of U.S. consumer responses when asked about their frequency of engaging with brands/advertising via the Internet and social media during the past year:
But according to this survey -- remembering that it was conducted online -- Americans are even more attached to the Internet: 58% said they can't live without it, and 31% said they'd miss it a great deal if it wasn't there. Just 10% said they like it but don't need it, and 1% that they could easily live without it.
More than one-third (35%) said they can't live without their mobile phones, and another 28% would greatly miss them.
In comparison, 25% of Americans said they would greatly miss newspapers, and 10% that they can't live without them, while 23% and 6%, respectively, expressed those opinions about magazines.
Looking at perceptions about the amount of advertising in various media, 71% of Americans said there are too many ads on TV -- although 26% actually said that the number is about right, and 1% would be "happier to see or hear more ads."
Print media came out more favorably. Just 30% and 54% said that there are too many ads in newspapers and magazines, respectively, while 61% and 40% said that the number of ads is just right in newspapers and magazines, respectively. Four percent would like to see more ads in newspapers, and 2% would like to see more in magazines.
As for the new advertising frontier of mobile phones, 39% feel that the current number of ads is about right, versus 28% who already view advertising as too intrusive. Nearly a third (31%) were undecided.
How many would be willing to be exposed to more ads if they were paid for it? For both TV and the Internet, more than half (52%) said they would agree to be exposed to more ads, while 40% would not be willing. Slightly more - 54% -- would be willing to view more ads on their cell phones if they were paid to do so, although 31% said they would not be willing.
Looking at ad content, novelty appears to be more important than perkiness to U.S. consumers. Asked what characteristics their favorite ads tend to have in common, 21% chose "innovative/unique," 17% chose "spontaneous/playful," 15% chose "logical/straightforward," and 12% "optimistic/happy."
Another 8% said they would be open to such monitoring with "few, if any, concerns."
However, 35% said they would reject such technology because they would be concerned about monitoring services collecting data about them, and 9% said that they are not interested in changing the ads to which they are exposed.
On a worldwide basis, 11% expressed acceptance with few or no concerns, 26% indicated openness if individual identities were protected, 27% indicated rejection on the basis of privacy concerns, and 16% said they are not interested in changing the ads to which they are exposed.
The survey was conducted in September among consumers in the U.S. and 10 other countries. The U.S. survey took place online, and the 500 respondents comprised a representative national sample, according to Synovate.
The results confirm that consumers are taking steps to avoid advertising, and that this behavior varies by medium. For instance, 41% report that they are avoiding Web sites with intrusive ads or pop-ups more frequently than they did a year ago (9% are doing this less frequently, and 37% have not changed the frequency of this behavior). Even more (44%) are more frequently skipping ads when watching TV or listening to radio (5% are doing this less frequently, and 46% have not changed this behavior).
Here's a summary of U.S. consumer responses when asked about their frequency of engaging with brands/advertising via the Internet and social media during the past year:
- Following a brand on Twitter: 82% have never done this, 4% are doing it more often than a year ago, 1% less often, and 9% with the same frequency.
- Promoting a brand or ad on their social networking pages or becoming a brand fan: 63% have never done, 9% are doing more often, 6% less often, and 18% with the same frequency.
- Sharing links to ads that they like with friends: 55% have never done, 7% are doing more often, 9% less often, and 26% with the same frequency.
- Searching for an ad on the Internet (e.g. YouTube): 51% have never done, 8% are doing more often, 12% less often, and 27% with the same frequency.
But according to this survey -- remembering that it was conducted online -- Americans are even more attached to the Internet: 58% said they can't live without it, and 31% said they'd miss it a great deal if it wasn't there. Just 10% said they like it but don't need it, and 1% that they could easily live without it.
More than one-third (35%) said they can't live without their mobile phones, and another 28% would greatly miss them.
In comparison, 25% of Americans said they would greatly miss newspapers, and 10% that they can't live without them, while 23% and 6%, respectively, expressed those opinions about magazines.
Looking at perceptions about the amount of advertising in various media, 71% of Americans said there are too many ads on TV -- although 26% actually said that the number is about right, and 1% would be "happier to see or hear more ads."
Print media came out more favorably. Just 30% and 54% said that there are too many ads in newspapers and magazines, respectively, while 61% and 40% said that the number of ads is just right in newspapers and magazines, respectively. Four percent would like to see more ads in newspapers, and 2% would like to see more in magazines.
As for the new advertising frontier of mobile phones, 39% feel that the current number of ads is about right, versus 28% who already view advertising as too intrusive. Nearly a third (31%) were undecided.
How many would be willing to be exposed to more ads if they were paid for it? For both TV and the Internet, more than half (52%) said they would agree to be exposed to more ads, while 40% would not be willing. Slightly more - 54% -- would be willing to view more ads on their cell phones if they were paid to do so, although 31% said they would not be willing.
Looking at ad content, novelty appears to be more important than perkiness to U.S. consumers. Asked what characteristics their favorite ads tend to have in common, 21% chose "innovative/unique," 17% chose "spontaneous/playful," 15% chose "logical/straightforward," and 12% "optimistic/happy."
Friday, December 4, 2009
IAB: 'Advertising Is Creepy'
Faced with increasing pressure from Washington, the Interactive Advertising Bureau launched a public service campaign on Thursday aimed at educating consumers about behavioral targeting.
The online campaign, created pro bono by WPP's Schematic, features rich media banner ads with copy like "Advertising is creepy" and "Hey, this banner can tell where you live. Mind if we come over and sell you stuff?"
More than one dozen publishers -- including Microsoft, Google's YouTube, and AOL -- have committed to donate a combined 500 million impressions for the initiative.
The campaign comes as policymakers are questioning whether data collection by marketers violates consumers' privacy. Rep. Rick Boucher (D-Va.) has said he plans to introduce a bill that could require Web companies to notify users about online ad targeting, and in some circumstances, obtain their explicit consent.
In addition, the Federal Trade Commission has criticized the industry for using dense privacy policies to inform people about behavioral targeting, or tracking people online and sending them ads based on sites visited.
In a meeting with reporters Thursday morning, IAB President and CEO Randall Rothenberg said one goal of the campaign is to address regulators' concerns that consumers don't understand behavioral advertising.
The ad units themselves offer information about online ad techniques. For instance, users who mouse over the "creepy" banner can pull down copy stating that companies don't use "personally identifiable information" to determine which ads to serve.
Users who click through land on the IAB's Privacy Matters page, which includes a description of various forms of online advertising, information about cookies (including Flash cookies) and links to opt-out pages.
The portion of the landing page devoted to cookies says they "contain data that allow a Web site to customize content and advertising to your interests but generally do not contain personally identifiable information." A section with information about geotargeting states that an IP address "reveals nothing personal about you to marketers and websites."
But privacy advocate Jeff Chester immediately raised questions about such statements. "They are ignoring the growing consensus that cookies and IP addresses are personally identifiable," says Chester, executive director of the Center for Digital Democracy.
Cathy Dwyer, a privacy expert and professor of information systems at Pace University, also questions whether the banners' headlines are too sophisticated to draw in users. "Even 'creepy' itself is a technical term," she says, adding that it's mainly industry insiders and observers who use that word in discussions about behavioral advertising.
The FTC said this year in its report about online behavioral targeting that non-personally identifiable information could be used to identify specific users.
In the past, industry groups and observers defined personally identifiable information as names, addresses, phone numbers or other information that could be used to contact an individual directly.
Critics recently moved away from that definition, in part because Web users have been identified based on supposedly anonymous data. The most famous example occurred in 2006, when AOL publicly released search logs showing users' queries and "anonymized" IP addresses for more than 600,000 users, Within days, one "anonymized" user, Thelma Arnold, was profiled in The New York Times after reporters identified her based on her search queries.
Schematic CEO Trevor Kaufman told reporters Thursday that a test of the campaign in late October and early November yielded a click-through rate of 0.5%. The trial involved 7 million impressions, mainly served on Microsoft's Hotmail.
Separately, the digital rights group Center for Democracy & Technology also launched a privacy campaign on Thursday -- although with a different goal. The CDT is hoping to persuade users to lobby Congress for online privacy legislation. The Web site for the CDT's "Take Back Your Privacy" campaign enables users to submit concerns directly to the FTC and to send emails to their lawmakers.
The online campaign, created pro bono by WPP's Schematic, features rich media banner ads with copy like "Advertising is creepy" and "Hey, this banner can tell where you live. Mind if we come over and sell you stuff?"
More than one dozen publishers -- including Microsoft, Google's YouTube, and AOL -- have committed to donate a combined 500 million impressions for the initiative.
The campaign comes as policymakers are questioning whether data collection by marketers violates consumers' privacy. Rep. Rick Boucher (D-Va.) has said he plans to introduce a bill that could require Web companies to notify users about online ad targeting, and in some circumstances, obtain their explicit consent.
In addition, the Federal Trade Commission has criticized the industry for using dense privacy policies to inform people about behavioral targeting, or tracking people online and sending them ads based on sites visited.
In a meeting with reporters Thursday morning, IAB President and CEO Randall Rothenberg said one goal of the campaign is to address regulators' concerns that consumers don't understand behavioral advertising.
The ad units themselves offer information about online ad techniques. For instance, users who mouse over the "creepy" banner can pull down copy stating that companies don't use "personally identifiable information" to determine which ads to serve.
Users who click through land on the IAB's Privacy Matters page, which includes a description of various forms of online advertising, information about cookies (including Flash cookies) and links to opt-out pages.
The portion of the landing page devoted to cookies says they "contain data that allow a Web site to customize content and advertising to your interests but generally do not contain personally identifiable information." A section with information about geotargeting states that an IP address "reveals nothing personal about you to marketers and websites."
But privacy advocate Jeff Chester immediately raised questions about such statements. "They are ignoring the growing consensus that cookies and IP addresses are personally identifiable," says Chester, executive director of the Center for Digital Democracy.
Cathy Dwyer, a privacy expert and professor of information systems at Pace University, also questions whether the banners' headlines are too sophisticated to draw in users. "Even 'creepy' itself is a technical term," she says, adding that it's mainly industry insiders and observers who use that word in discussions about behavioral advertising.
The FTC said this year in its report about online behavioral targeting that non-personally identifiable information could be used to identify specific users.
In the past, industry groups and observers defined personally identifiable information as names, addresses, phone numbers or other information that could be used to contact an individual directly.
Critics recently moved away from that definition, in part because Web users have been identified based on supposedly anonymous data. The most famous example occurred in 2006, when AOL publicly released search logs showing users' queries and "anonymized" IP addresses for more than 600,000 users, Within days, one "anonymized" user, Thelma Arnold, was profiled in The New York Times after reporters identified her based on her search queries.
Schematic CEO Trevor Kaufman told reporters Thursday that a test of the campaign in late October and early November yielded a click-through rate of 0.5%. The trial involved 7 million impressions, mainly served on Microsoft's Hotmail.
Separately, the digital rights group Center for Democracy & Technology also launched a privacy campaign on Thursday -- although with a different goal. The CDT is hoping to persuade users to lobby Congress for online privacy legislation. The Web site for the CDT's "Take Back Your Privacy" campaign enables users to submit concerns directly to the FTC and to send emails to their lawmakers.
Thursday, December 3, 2009
Newspaper Group Argues Against Opt-In Consent For Behavioral Targeting
The Newspaper Association of America is touting online behavioral targeting as a partial fix for the industry's revenue woes.
"Targeted advertising shows significant promise for newspapers seeking new ways to support local journalism," the organization writes in comments filed with the Federal Trade Commission. The comments were filed in advance of this week's FTC public workshops about media, "From Town Crier to Bloggers: How Will Journalism Survive the Internet Age."
Sophia Cope, legislative counsel at the NAA, adds that members of Yahoo's newspaper consortium have benefited from the company's online ad-targeting capabilities. "Based on preliminary results, it looks like targeted advertising will be one of the solutions that helps newspapers get back some of their revenue," she says. The NAA says that Yahoo's newspaper consortium has generated at least $50 million since last year. The initiative involves Yahoo powering behavioral targeting for some newspapers' Web sites, among other features.
"The newspaper industry wants the flexibility to figure out what's going to work," Cope says. "The industry needs time to figure out what solutions will rise to the top and be successful."
The NAA estimates that by the end of December, newspapers' ad revenue will have plummeted almost 40% in two years.
The trade group argues in its comments that a regulatory framework requiring companies to obtain users' affirmative consent to online tracking for ad-targeting purposes would be impractical. "While newspapers support robust consumer notice and choice, newspapers worry that a government mandated 'opt in' choice mechanism for 'third party' targeted advertising may not be workable in practice," the organization writes. The NAA adds that requiring online readers to opt in during their initial visits would "degrade the user experience and make it difficult to communicate the benefits of targeted or interest-based advertising."
Privacy advocate Jeffrey Chester, executive director of the Center for Digital Democracy, says he disagrees with the NAA's stance. "It would be more effective for newspapers' branding to be known as the place where privacy is respected," he says. "Just because everybody is engaged in this data collection melee doesn't mean everyone has to do it."
Chester, who is also slated to speak at the FTC's workshops this week, adds that many people visit news sites without realizing the extent to which they collect data. "Few readers know that readers know that newspapers are stealthily watching every story they read, tracking them story to story," he says. "No one knows that news sites have become a data collection den."
Current industry self-regulatory guidelines and FTC recommendations call for companies to notify consumers about online ad targeting and allow them to opt out. Chester and other privacy advocates have recommended moving to a system where Web sites and ad companies can collect and retain non-sensitive information about computer users for up to 24 hours, unless people opt out. After that initial period, the companies would need consumers' opt-in consent to retain the data.
Marking an apparent shift from its position last year, the newspaper organization praised the FTC's recent endorsement of a voluntary notice and opt-out regime. But in 2008, the NAA warned that even voluntary guidelines could have an impact on newspapers' First Amendment rights.
Other people scheduled to speak at the workshops include News Corp. chief Rupert Murdoch, Magazine Publishers of America CEO Nina Link, Ball State University's Mike Bloxham, the Online Publishers Association President Pam Horan, and Interactive Advertising Bureau Research Director Joe Laszlo.
"Targeted advertising shows significant promise for newspapers seeking new ways to support local journalism," the organization writes in comments filed with the Federal Trade Commission. The comments were filed in advance of this week's FTC public workshops about media, "From Town Crier to Bloggers: How Will Journalism Survive the Internet Age."
Sophia Cope, legislative counsel at the NAA, adds that members of Yahoo's newspaper consortium have benefited from the company's online ad-targeting capabilities. "Based on preliminary results, it looks like targeted advertising will be one of the solutions that helps newspapers get back some of their revenue," she says. The NAA says that Yahoo's newspaper consortium has generated at least $50 million since last year. The initiative involves Yahoo powering behavioral targeting for some newspapers' Web sites, among other features.
"The newspaper industry wants the flexibility to figure out what's going to work," Cope says. "The industry needs time to figure out what solutions will rise to the top and be successful."
The NAA estimates that by the end of December, newspapers' ad revenue will have plummeted almost 40% in two years.
The trade group argues in its comments that a regulatory framework requiring companies to obtain users' affirmative consent to online tracking for ad-targeting purposes would be impractical. "While newspapers support robust consumer notice and choice, newspapers worry that a government mandated 'opt in' choice mechanism for 'third party' targeted advertising may not be workable in practice," the organization writes. The NAA adds that requiring online readers to opt in during their initial visits would "degrade the user experience and make it difficult to communicate the benefits of targeted or interest-based advertising."
Privacy advocate Jeffrey Chester, executive director of the Center for Digital Democracy, says he disagrees with the NAA's stance. "It would be more effective for newspapers' branding to be known as the place where privacy is respected," he says. "Just because everybody is engaged in this data collection melee doesn't mean everyone has to do it."
Chester, who is also slated to speak at the FTC's workshops this week, adds that many people visit news sites without realizing the extent to which they collect data. "Few readers know that readers know that newspapers are stealthily watching every story they read, tracking them story to story," he says. "No one knows that news sites have become a data collection den."
Current industry self-regulatory guidelines and FTC recommendations call for companies to notify consumers about online ad targeting and allow them to opt out. Chester and other privacy advocates have recommended moving to a system where Web sites and ad companies can collect and retain non-sensitive information about computer users for up to 24 hours, unless people opt out. After that initial period, the companies would need consumers' opt-in consent to retain the data.
Marking an apparent shift from its position last year, the newspaper organization praised the FTC's recent endorsement of a voluntary notice and opt-out regime. But in 2008, the NAA warned that even voluntary guidelines could have an impact on newspapers' First Amendment rights.
Other people scheduled to speak at the workshops include News Corp. chief Rupert Murdoch, Magazine Publishers of America CEO Nina Link, Ball State University's Mike Bloxham, the Online Publishers Association President Pam Horan, and Interactive Advertising Bureau Research Director Joe Laszlo.
Wednesday, December 2, 2009
3 Ways to Guard Against Click Fraud
By Heather Fletcher
No one likes to be cheated. And click fraud touches a raw nerve for many marketers. So New York-based online advertising network Undertone Networks identified some best practices for agencies and advertisers to ensure the safety of online ads and the brands they represent.
Click Forensics reported in October that the average click fraud rate for the third quarter of 2009 was 14.1 percent, up from 12.7 percent during the previous quarter. "As advertisers, publishers and ad networks are getting smarter, so are the attackers," according to Undertone. "A recently uncovered click fraud ring run out of China involved 200,000 IP addresses and more than $3 million worth of fraudulent clicks."
Undertone provides the following advice:
1. Engage the ad server as the first line of defense: Most ad servers allow advertisers to pull reports on the country of origin for impressions and clicks. Do your homework on your ad-serving platform to understand how it counts and handles click fraud, and closely monitor site visitors, time spent and activity related to each click. These related measurements help you identify not only fraudulent activity, but which clicks are truly valuable.
2. Don't pay for irrelevant international impressions: Up to 40 percent of publisher site traffic comes from outside the United States, and ad networks are used as a clearinghouse for this inventory. Too often, unsuspecting advertisers serve domestic creative to international audiences who can't act. Unless international users are your target, specify U.S. traffic only in your insertion orders. A growing percentage of click fraud is through foreign IP addresses, so monitoring this traffic will reduce your exposure.
3. Modify terms and conditions on media contracts: By far, the most proactive measure advertisers can take to prevent fraud is to modify the contracts they use with media partners. These amendments include specifically excluding incentivized traffic, use of ad exchange inventory, as well as practices like ad stacking (when a click on one ad actually generates clicks on other associated ads) and daisy-chaining (when the original ad host recycles ads to other sites in order to boost revenue), which makes companies more vulnerable for click fraud.
No one likes to be cheated. And click fraud touches a raw nerve for many marketers. So New York-based online advertising network Undertone Networks identified some best practices for agencies and advertisers to ensure the safety of online ads and the brands they represent.
Click Forensics reported in October that the average click fraud rate for the third quarter of 2009 was 14.1 percent, up from 12.7 percent during the previous quarter. "As advertisers, publishers and ad networks are getting smarter, so are the attackers," according to Undertone. "A recently uncovered click fraud ring run out of China involved 200,000 IP addresses and more than $3 million worth of fraudulent clicks."
Undertone provides the following advice:
1. Engage the ad server as the first line of defense: Most ad servers allow advertisers to pull reports on the country of origin for impressions and clicks. Do your homework on your ad-serving platform to understand how it counts and handles click fraud, and closely monitor site visitors, time spent and activity related to each click. These related measurements help you identify not only fraudulent activity, but which clicks are truly valuable.
2. Don't pay for irrelevant international impressions: Up to 40 percent of publisher site traffic comes from outside the United States, and ad networks are used as a clearinghouse for this inventory. Too often, unsuspecting advertisers serve domestic creative to international audiences who can't act. Unless international users are your target, specify U.S. traffic only in your insertion orders. A growing percentage of click fraud is through foreign IP addresses, so monitoring this traffic will reduce your exposure.
3. Modify terms and conditions on media contracts: By far, the most proactive measure advertisers can take to prevent fraud is to modify the contracts they use with media partners. These amendments include specifically excluding incentivized traffic, use of ad exchange inventory, as well as practices like ad stacking (when a click on one ad actually generates clicks on other associated ads) and daisy-chaining (when the original ad host recycles ads to other sites in order to boost revenue), which makes companies more vulnerable for click fraud.
Monday, November 16, 2009
Google Trademark Policy Worries Holiday Advertisers
By Kevin Newcomb , November 13, 2009
Heading into the holiday shopping season, search marketers are worried that Google's new trademark policy for AdWords will drive up costs for big brands.
"The holiday season will be a real proving ground, to see how quickly Google responds to issues," Jeremy Hull, account leader at Range Online Media, told ClickZ. "Do they have an adequate team in place, with policies and procedures that are scalable for the holidays?"
While the number of infringing ads a brand owner has to deal with will vary, the issue is amplified during the holiday shopping season, Hull said. "The fraudulent advertisers know that the legitimate marketers are swamped with holidays, and use the busy time to push out more trademark-infringing ads," he said.
The impact of other advertisers bidding on a trademark most often comes in the form of increased costs to the trademark owner, who has more competition on his trademarked terms, which drives up bid prices. There's also the issue of missed revenue, where a searcher will buy from another site advertising on a trademarked keyword, and not from the trademark owner's site, Hull said.
In May 2009, Google changed its policy toward trademark usage in AdWords ads. Previously, Google had not allowed advertisers to use trademarks they didn't own, either for targeting or in ad text, and Google was responsible for policing that policy.
Under the new trademark policy, advertisers can use trademarks they don't own under certain circumstances, such as if they are reselling a product or discussing the product on an informational site.
Advertisers that are using trademarked terms includes affiliates of a brand, who may or may not have permission from the trademark owner, and sellers of gray-market and black-market goods, who usually don't have permission.
"Anything you could buy as a knock-off on the streets of New York and rub the logo off with your fingernail...those are the same brands you are seeing victimized by fraudulent behavior online as well," Hull said. "So, major apparel, luxury, jewelry, fragrance, and other well-known and sought after brands are the hardest-hit by trademark infringement."
While gray- and black-market goods are an issue for some categories, the bigger issue for many retailers is inadequate trademark policies built into their own affiliate programs, according to Hull.
The increased competition has caused several Range clients, especially those with luxury retail brands, to see a dramatic decrease in clicks on their ads since the policy change, despite similar impression volume, Hull said.
Others have also seen an increase in cost-per-click (CPC) rates they pay for ads, according to Alison Childers, senior account manager at Range Online Media. On some brand terms, CPC rates have risen by as much as 50 percent, while clickthrough traffic has dropped by 30 percent, she said.
"Those numbers are holding true across all big brand terms," Hull said. "It's a free-for-all on brands."
What Brands Fear
Even when that's not happening, there is potential damage to the brand in the form of mixed messages to consumers, such as an affiliate using a low-cost message to sell a luxury brand, Hull said. Big brand owners go to great lengths to control the messages around their brands and align their efforts, but without trademark protection in AdWords, "they've lost control of the space," he said.
Additionally, the onus is on trademark owners find ads using their trademark without permission, and then bring them to Google's attention via an online form.
"We believe that this approach gives users more choices and access to as much information as is relevant to their search or interest," a Google spokesperson told ClickZ. "Some trademark owners support other advertisers using their trademarked terms in ad text to generate traffic and sales of their products; other trademark owners feel differently."
Google's Policy
Google will investigate allegations of trademark infringement "as a courtesy," when trademark owners file a complaint with them. If Google's investigation finds that an advertiser is using a trademark owner's term in the ad text in a manner which is competitive, critical, or negative, it will disapprove the ad for violation of Google's policies, notify the offending advertiser, and prevent the advertiser from using the trademark in similar ad text in the future. Repeat offenders of this policy are subject to account suspension, according to Google's spokesperson.
It was pragmatic, from a business perspective, for Google to change its policy, according to Patrick Garrett, managing director of Outrider, part of GroupM Search.
"They've handed off all the legwork required to track down violators to the advertisers. They've also opened up new spending opportunities by allowing more people to buy ads on keywords that they couldn't buy on before," Garrett said.
Google basically brought its policy in line with that of other search engines. But, since Google has such tremendous volume compared to other search engines, the changes Google made in May had a big impact on advertisers, Garrett said.
"There's been an onslaught of people playing in the trademark space [since Google changed its policy]. Some are people that have the right to use your trademark, others don't." Garrett said. "We're OK with taking on the burden of monitoring our clients' trademarks, but we'd like more clarity from Google on how they're going to help us combat issues when they come up."
For instance, Garrett would like Google to make it clear what criteria Google uses when deciding whether to take down a single ad or ban an advertiser completely. It's currently too easy for an advertiser to simply create a new ad that still uses the trademark after the first one is banned, he said. Also, he said it's not clear what evidence Google wants from trademark owners to help expedite the process.
Hull agreed that clarity into Google's trademark policy is uncharacteristically lacking. "Everything else with Google is so cut-and-dried; you know the process. This seems so nebulous," he said.
Heading into the holiday shopping season, search marketers are worried that Google's new trademark policy for AdWords will drive up costs for big brands.
"The holiday season will be a real proving ground, to see how quickly Google responds to issues," Jeremy Hull, account leader at Range Online Media, told ClickZ. "Do they have an adequate team in place, with policies and procedures that are scalable for the holidays?"
While the number of infringing ads a brand owner has to deal with will vary, the issue is amplified during the holiday shopping season, Hull said. "The fraudulent advertisers know that the legitimate marketers are swamped with holidays, and use the busy time to push out more trademark-infringing ads," he said.
The impact of other advertisers bidding on a trademark most often comes in the form of increased costs to the trademark owner, who has more competition on his trademarked terms, which drives up bid prices. There's also the issue of missed revenue, where a searcher will buy from another site advertising on a trademarked keyword, and not from the trademark owner's site, Hull said.
In May 2009, Google changed its policy toward trademark usage in AdWords ads. Previously, Google had not allowed advertisers to use trademarks they didn't own, either for targeting or in ad text, and Google was responsible for policing that policy.
Under the new trademark policy, advertisers can use trademarks they don't own under certain circumstances, such as if they are reselling a product or discussing the product on an informational site.
Advertisers that are using trademarked terms includes affiliates of a brand, who may or may not have permission from the trademark owner, and sellers of gray-market and black-market goods, who usually don't have permission.
"Anything you could buy as a knock-off on the streets of New York and rub the logo off with your fingernail...those are the same brands you are seeing victimized by fraudulent behavior online as well," Hull said. "So, major apparel, luxury, jewelry, fragrance, and other well-known and sought after brands are the hardest-hit by trademark infringement."
While gray- and black-market goods are an issue for some categories, the bigger issue for many retailers is inadequate trademark policies built into their own affiliate programs, according to Hull.
The increased competition has caused several Range clients, especially those with luxury retail brands, to see a dramatic decrease in clicks on their ads since the policy change, despite similar impression volume, Hull said.
Others have also seen an increase in cost-per-click (CPC) rates they pay for ads, according to Alison Childers, senior account manager at Range Online Media. On some brand terms, CPC rates have risen by as much as 50 percent, while clickthrough traffic has dropped by 30 percent, she said.
"Those numbers are holding true across all big brand terms," Hull said. "It's a free-for-all on brands."
What Brands Fear
Even when that's not happening, there is potential damage to the brand in the form of mixed messages to consumers, such as an affiliate using a low-cost message to sell a luxury brand, Hull said. Big brand owners go to great lengths to control the messages around their brands and align their efforts, but without trademark protection in AdWords, "they've lost control of the space," he said.
Additionally, the onus is on trademark owners find ads using their trademark without permission, and then bring them to Google's attention via an online form.
"We believe that this approach gives users more choices and access to as much information as is relevant to their search or interest," a Google spokesperson told ClickZ. "Some trademark owners support other advertisers using their trademarked terms in ad text to generate traffic and sales of their products; other trademark owners feel differently."
Google's Policy
Google will investigate allegations of trademark infringement "as a courtesy," when trademark owners file a complaint with them. If Google's investigation finds that an advertiser is using a trademark owner's term in the ad text in a manner which is competitive, critical, or negative, it will disapprove the ad for violation of Google's policies, notify the offending advertiser, and prevent the advertiser from using the trademark in similar ad text in the future. Repeat offenders of this policy are subject to account suspension, according to Google's spokesperson.
It was pragmatic, from a business perspective, for Google to change its policy, according to Patrick Garrett, managing director of Outrider, part of GroupM Search.
"They've handed off all the legwork required to track down violators to the advertisers. They've also opened up new spending opportunities by allowing more people to buy ads on keywords that they couldn't buy on before," Garrett said.
Google basically brought its policy in line with that of other search engines. But, since Google has such tremendous volume compared to other search engines, the changes Google made in May had a big impact on advertisers, Garrett said.
"There's been an onslaught of people playing in the trademark space [since Google changed its policy]. Some are people that have the right to use your trademark, others don't." Garrett said. "We're OK with taking on the burden of monitoring our clients' trademarks, but we'd like more clarity from Google on how they're going to help us combat issues when they come up."
For instance, Garrett would like Google to make it clear what criteria Google uses when deciding whether to take down a single ad or ban an advertiser completely. It's currently too easy for an advertiser to simply create a new ad that still uses the trademark after the first one is banned, he said. Also, he said it's not clear what evidence Google wants from trademark owners to help expedite the process.
Hull agreed that clarity into Google's trademark policy is uncharacteristically lacking. "Everything else with Google is so cut-and-dried; you know the process. This seems so nebulous," he said.
Friday, November 13, 2009
Privacy Advocates Want To Bust Blockbuster Over Beacon
Privacy advocates are asking a federal appellate court to uphold a ruling allowing consumers to sue Blockbuster for participating in Facebook's Beacon program.
In papers filed recently with the 5th U.S. Circuit of Appeals, the Electronic Privacy Information Center is urging the court to reject Blockbuster's argument that consumers have no right to bring a class-action lawsuit because the company's terms of service require mandatory arbitration.
"To permit companies to substitute unilaterally mandatory arbitration clauses for the express language set out in federal statute will undermine privacy safeguards, contribute to further privacy harms, and frustrate the intent of Congress," the privacy group argues.
The case grows out of Facebook's all-but-defunct Beacon program, which told users about their friends' activity at outside sites including Blockbuster, Zappos and Overstock. The program originally operated by default, spreading news about members' purchases unless they affirmatively opted out. Some users immediately complained that they were blindsided by the platform, which transmitted information that they had intended to keep private. Members also said they didn't see the opt-out boxes -- some of which were served via pop-ups that disappeared after just 20 seconds.
Within weeks of its launch, Facebook revised the program to make it opt-in. Shortly afterwards, the company allowed people to permanently opt out.
In April of 2008, consumers in Texas filed a potential class-action lawsuit against Blockbuster for participating in Beacon. The consumers alleged that the movie rental company had violated the Video Privacy Protection Act, a 1988 federal law passed after a newspaper obtained video rental records of U.S. Supreme Court nominee Robert Bork. That law provides for damages of $2,500 per violation.
Blockbuster said the dispute did not belong in court because its user contract called for arbitration and banned class-action lawsuits, but U.S. District Court Judge Barbara Lynn in Dallas rejected that argument. She ruled in April that Blockbuster's contract with users was "illusory" because the agreement said that movie rental store could change the terms and conditions at any time.
Blockbuster appealed to the 5th Circuit, which is now considering the case.
John Verdi, a lawyer with the Electronic Privacy Information Center, says that a decision in Blockbuster's favor would effectively allow companies to avoid federal privacy law.
"There's a real risk that the court could put consumers in a situation where, as a practical matter, they wouldn't have the rights that Congress intended them to have," he says.
Regardless of the appellate court's decision in this appeal, the consumers' lawsuit against Blockbuster could still be dismissed if a class-action settlement of a separate lawsuit in California against Facebook and its partners goes through.
In the California case, U.S. Magistrate Judge Richard Seeborg in San Jose tentatively approved a deal that calls for Facebook to shutter Beacon permanently and to pay $9.5 million -- approximately two-thirds of which will fund a new privacy foundation. If that settlement is approved in its current form, it would extinguish the Texas litigation against Blockbuster. But the consumers in Texas are likely to object to that settlement, and the ultimate outcome remains uncertain.
In papers filed recently with the 5th U.S. Circuit of Appeals, the Electronic Privacy Information Center is urging the court to reject Blockbuster's argument that consumers have no right to bring a class-action lawsuit because the company's terms of service require mandatory arbitration.
"To permit companies to substitute unilaterally mandatory arbitration clauses for the express language set out in federal statute will undermine privacy safeguards, contribute to further privacy harms, and frustrate the intent of Congress," the privacy group argues.
The case grows out of Facebook's all-but-defunct Beacon program, which told users about their friends' activity at outside sites including Blockbuster, Zappos and Overstock. The program originally operated by default, spreading news about members' purchases unless they affirmatively opted out. Some users immediately complained that they were blindsided by the platform, which transmitted information that they had intended to keep private. Members also said they didn't see the opt-out boxes -- some of which were served via pop-ups that disappeared after just 20 seconds.
Within weeks of its launch, Facebook revised the program to make it opt-in. Shortly afterwards, the company allowed people to permanently opt out.
In April of 2008, consumers in Texas filed a potential class-action lawsuit against Blockbuster for participating in Beacon. The consumers alleged that the movie rental company had violated the Video Privacy Protection Act, a 1988 federal law passed after a newspaper obtained video rental records of U.S. Supreme Court nominee Robert Bork. That law provides for damages of $2,500 per violation.
Blockbuster said the dispute did not belong in court because its user contract called for arbitration and banned class-action lawsuits, but U.S. District Court Judge Barbara Lynn in Dallas rejected that argument. She ruled in April that Blockbuster's contract with users was "illusory" because the agreement said that movie rental store could change the terms and conditions at any time.
Blockbuster appealed to the 5th Circuit, which is now considering the case.
John Verdi, a lawyer with the Electronic Privacy Information Center, says that a decision in Blockbuster's favor would effectively allow companies to avoid federal privacy law.
"There's a real risk that the court could put consumers in a situation where, as a practical matter, they wouldn't have the rights that Congress intended them to have," he says.
Regardless of the appellate court's decision in this appeal, the consumers' lawsuit against Blockbuster could still be dismissed if a class-action settlement of a separate lawsuit in California against Facebook and its partners goes through.
In the California case, U.S. Magistrate Judge Richard Seeborg in San Jose tentatively approved a deal that calls for Facebook to shutter Beacon permanently and to pay $9.5 million -- approximately two-thirds of which will fund a new privacy foundation. If that settlement is approved in its current form, it would extinguish the Texas litigation against Blockbuster. But the consumers in Texas are likely to object to that settlement, and the ultimate outcome remains uncertain.
Wednesday, November 11, 2009
FTC Urged To Clamp Down On Data Collection Online
Privacy advocates are renewing calls for the Federal Trade Commission to impose limits on online data collection and ad targeting.
"It should be evident to all that self-regulation to protect consumer privacy online has been a dismal failure," the Center for Digital Democracy and U.S. Public Interest Research Group wrote in comments submitted to the Federal Trade Commission in advance of its privacy roundtable next month. "We need strong baseline laws and regulations to ensure serious industry compliance."
The Interactive Advertising Bureau, which opposes new behavioral targeting regulations, doesn't plan to submit comments before the first roundtable, says Mike Zaneis, vice president for public policy.
"We're going to wait and see how this first day of roundtables goes, and see if it merits comments," Zaneis says. The FTC has scheduled the first of three day-long privacy discussions for Dec. 7.
The privacy advocates argue that Web companies are not providing consumers with enough power over the collection and use of their data. "Consumers are faced with a largely invisible and all-encompassing data collection apparatus, often operating automatically, that makes decisions about the prices and services they are offered," the groups write. They add that Web users "need to know, and should have the right to approve, the marketing segments into which they have been placed."
The advocacy groups also say the industry's new self-regulatory principles -- unveiled in July by the American Association of Advertising Agencies, Association of National Advertisers, Council of Better Business Bureaus, Direct Marketing Association, and the Interactive Advertising Bureau -- do not adequately protect consumers.
Among other criticisms, the privacy groups allege that the ad associations' new guidelines don't sufficiently guard sensitive data. The principles require companies to obtain consumers' consent to collect such data, but define it as financial account numbers, social security numbers, pharmaceutical prescriptions, or medical records about a specific individual. The privacy groups argue that the industry's definition of "sensitive" is far too narrow.
The digital rights organization Center for Democracy & Technology also filed comments that were critical of current online behavioral-targeting policies. The CDT called on the FTC to endorse broad fair information collection practices.
The FTC's current self-regulatory guidelines emphasize that companies should notify users about online tracking and targeting and allow them to opt out. But the CDT says that notice-and-consent regime doesn't go far enough because it only allows consumers to make a choice at the time of collection. "Long after data is collected, it lives in a Wild West of shared and sold personal profiles and databases that give consumers no control over how their identities will be tracked and used," the group wrote.
The CDT also expressed skepticism about whether industry self-regulation can protect consumers. "A self-regulatory system that relies on trade associations to provide implementation and accountability guidelines is clearly incomplete: the activities of non-members will remain unregulated," the organization argued.
Three years ago, the Center for Digital Democracy and U.S. Public Interest Group filed a petition with the FTC that kicked off the current debate about whether behavioral targeting compromises users' privacy. In January, they filed papers with the FTC alleging that mobile companies were using "unfair and deceptive" behavioral targeting strategies.
"It should be evident to all that self-regulation to protect consumer privacy online has been a dismal failure," the Center for Digital Democracy and U.S. Public Interest Research Group wrote in comments submitted to the Federal Trade Commission in advance of its privacy roundtable next month. "We need strong baseline laws and regulations to ensure serious industry compliance."
The Interactive Advertising Bureau, which opposes new behavioral targeting regulations, doesn't plan to submit comments before the first roundtable, says Mike Zaneis, vice president for public policy.
"We're going to wait and see how this first day of roundtables goes, and see if it merits comments," Zaneis says. The FTC has scheduled the first of three day-long privacy discussions for Dec. 7.
The privacy advocates argue that Web companies are not providing consumers with enough power over the collection and use of their data. "Consumers are faced with a largely invisible and all-encompassing data collection apparatus, often operating automatically, that makes decisions about the prices and services they are offered," the groups write. They add that Web users "need to know, and should have the right to approve, the marketing segments into which they have been placed."
The advocacy groups also say the industry's new self-regulatory principles -- unveiled in July by the American Association of Advertising Agencies, Association of National Advertisers, Council of Better Business Bureaus, Direct Marketing Association, and the Interactive Advertising Bureau -- do not adequately protect consumers.
Among other criticisms, the privacy groups allege that the ad associations' new guidelines don't sufficiently guard sensitive data. The principles require companies to obtain consumers' consent to collect such data, but define it as financial account numbers, social security numbers, pharmaceutical prescriptions, or medical records about a specific individual. The privacy groups argue that the industry's definition of "sensitive" is far too narrow.
The digital rights organization Center for Democracy & Technology also filed comments that were critical of current online behavioral-targeting policies. The CDT called on the FTC to endorse broad fair information collection practices.
The FTC's current self-regulatory guidelines emphasize that companies should notify users about online tracking and targeting and allow them to opt out. But the CDT says that notice-and-consent regime doesn't go far enough because it only allows consumers to make a choice at the time of collection. "Long after data is collected, it lives in a Wild West of shared and sold personal profiles and databases that give consumers no control over how their identities will be tracked and used," the group wrote.
The CDT also expressed skepticism about whether industry self-regulation can protect consumers. "A self-regulatory system that relies on trade associations to provide implementation and accountability guidelines is clearly incomplete: the activities of non-members will remain unregulated," the organization argued.
Three years ago, the Center for Digital Democracy and U.S. Public Interest Group filed a petition with the FTC that kicked off the current debate about whether behavioral targeting compromises users' privacy. In January, they filed papers with the FTC alleging that mobile companies were using "unfair and deceptive" behavioral targeting strategies.
Thursday, November 5, 2009
Tuesday, November 3, 2009
Net Neutrality Proponents Warn FCC Of Loopholes In Regulations
Leading net neutrality proponents are warning that the Federal Communications Commission's proposed net neutrality rules could create significant loopholes for Internet service providers.
The new regulations codify the four principles set out in a 2005 Internet policy statement, which provide that Web users are entitled to access all lawful content, applications and services, and that they can attach devices to the network. The FCC also proposed codifying two additional principles -- nondiscrimination and transparency.
But there are two major ambiguities in the proposed rules, according to advocates. One is that the FCC hasn't clarified what type of activity it will consider discriminatory. The other is that the FCC carves out an exception to all rules for reasonable network management practices, yet doesn't precisely define such practices.
Five law professors sent the FCC a letter on Monday stating that those ambiguities "appear likely to provide particularly generous opportunities to try to work around the Commission's efforts." The letter was signed by Yale's Jack Balkin, South Texas College's John Blevins, University of Louisville's Jim Chen, Harvard's Larry Lessig, Stanford's Barbara van Schewick and Columbia's Tim Wu.
"We think it is surprising that the FCC would not want to provide some guidance on the applicable standard for reasonable network management, lest, as a law professor would say, the exception swallow the rule," the academics wrote.
Broadband advocacy group Free Press raised similar concerns in policy brief filed Tuesday. "Since all six principles contained in the proposed open Internet rule are subject to 'reasonable network management,' a broadly permissive exemption standard would threaten to swallow the rules," the group wrote.
The advocates also asked the FCC to clarify the type of conduct it considers "discriminatory." The notice of proposed rulemaking says that nondiscriminatory means "that a broadband Internet access service provider may not charge a content, application, or service provider for enhanced or prioritized access."
But Free Press and the law professors argue that charging for enhanced access is only one illustration of discriminatory behavior and are asking the FCC to state that other forms of discrimination would be illegal.
Marvin Ammori, a University of Nebraska law school professor who advises Free Press, tells Online Media Daily that it's important for the FCC to define its terms so the public can weigh in on the proposals.
"Ambiguities around key terms like reasonable network management make it difficult to know how strong the rules will actually be," he says.
The new regulations codify the four principles set out in a 2005 Internet policy statement, which provide that Web users are entitled to access all lawful content, applications and services, and that they can attach devices to the network. The FCC also proposed codifying two additional principles -- nondiscrimination and transparency.
But there are two major ambiguities in the proposed rules, according to advocates. One is that the FCC hasn't clarified what type of activity it will consider discriminatory. The other is that the FCC carves out an exception to all rules for reasonable network management practices, yet doesn't precisely define such practices.
Five law professors sent the FCC a letter on Monday stating that those ambiguities "appear likely to provide particularly generous opportunities to try to work around the Commission's efforts." The letter was signed by Yale's Jack Balkin, South Texas College's John Blevins, University of Louisville's Jim Chen, Harvard's Larry Lessig, Stanford's Barbara van Schewick and Columbia's Tim Wu.
"We think it is surprising that the FCC would not want to provide some guidance on the applicable standard for reasonable network management, lest, as a law professor would say, the exception swallow the rule," the academics wrote.
Broadband advocacy group Free Press raised similar concerns in policy brief filed Tuesday. "Since all six principles contained in the proposed open Internet rule are subject to 'reasonable network management,' a broadly permissive exemption standard would threaten to swallow the rules," the group wrote.
The advocates also asked the FCC to clarify the type of conduct it considers "discriminatory." The notice of proposed rulemaking says that nondiscriminatory means "that a broadband Internet access service provider may not charge a content, application, or service provider for enhanced or prioritized access."
But Free Press and the law professors argue that charging for enhanced access is only one illustration of discriminatory behavior and are asking the FCC to state that other forms of discrimination would be illegal.
Marvin Ammori, a University of Nebraska law school professor who advises Free Press, tells Online Media Daily that it's important for the FCC to define its terms so the public can weigh in on the proposals.
"Ambiguities around key terms like reasonable network management make it difficult to know how strong the rules will actually be," he says.
IAB Lobbies Against Proposal To Expand FTC's Power
The online ad industry is sounding the alarm about a new bill currently pending in Congress that would expand the Federal Trade Commission's power by making it easier for the agency to create rules and to bring civil lawsuits.
"There are reasons why there have been limits on the FTC, and we want to see those limits preserved," says Mike Zaneis, vice president for public policy at the Interactive Ad Bureau. "This is legislative priority No. 1 for our industry."
The Consumer Financial Protection Agency Act (H.R. 3126) cleared the House Energy and Commerce committee last week and now moves to the full House, where it's expected to pass. But the proposal's fate in the Senate is uncertain.
The current House version creates a new consumer protection commission while also beefing up the FTC's power in a few key ways. The bill removes administrative hurdles to the FTC's rulemaking ability, makes it easier for the agency to pursue civil litigation, and allows the FTC to target ad companies that aid and abet unfair practices.
These new powers are so significant that industry observers are already saying the bill would effectively make FTC Chair Jon Leibowitz an "Internet czar."
For his part, Leibowitz said in a statement to the energy and commerce committee that the "modest new authority" given to the commission "will help ensure that we have the tools necessary to fight fraud and go after those who perpetrate it."
Industry executives say that the existing curbs on rulemaking ability have contributed to the FTC's decision to support industry self-regulation of matters like online behavioral targeting and privacy.
"We'd hate to see them move directly to government regulation in all of these areas, but that's the prospect that we're facing if this is enacted," Zaneis says.
Currently, the FTC can only make rules aimed at curbing a prevalent practice. But the bill would remove that restriction, allowing the agency to enact regulations as long as there's a rational reason to believe the rule would stem from unfair and deceptive conduct. The bill also would provide for a faster rulemaking procedure.
A host of consumer groups and privacy advocates, including the American Academy of Child and Adolescent Psychiatry, Consumers Union, Center for Digital Democracy and the Electronic Frontier Foundation, are advocating in favor of the bill. They argue that the current restrictions on the FTC hinder its effectiveness.
"We believe that the FTC must play a more proactive role addressing critical consumer concerns, including privacy, online marketing, and food advertising to young people," the groups wrote last week to the leaders of the House Energy and Commerce Committee.
The bill also would enable the FTC to pursue civil actions without prior review by the Department of Justice. In addition, the measure would let the FTC impose civil penalties without prior rules or orders.
A provision that would allow the FTC to prosecute companies that aid or abet an unfair act could be especially damaging to marketers and intermediaries, says the Association of National Advertisers. "This would have serious implications for advertising agencies, media companies and other companies that play any role in the communication/sale/delivery process," ANA Executive Vice President Dan Jaffe said last week in a letter to lawmakers.
Observers say the full House will probably pass the bill by the end of the calendar year. The proposal is expected to move more slowly in the Senate, where lawmakers are still hammering out a draft of the bill.
"There are reasons why there have been limits on the FTC, and we want to see those limits preserved," says Mike Zaneis, vice president for public policy at the Interactive Ad Bureau. "This is legislative priority No. 1 for our industry."
The Consumer Financial Protection Agency Act (H.R. 3126) cleared the House Energy and Commerce committee last week and now moves to the full House, where it's expected to pass. But the proposal's fate in the Senate is uncertain.
The current House version creates a new consumer protection commission while also beefing up the FTC's power in a few key ways. The bill removes administrative hurdles to the FTC's rulemaking ability, makes it easier for the agency to pursue civil litigation, and allows the FTC to target ad companies that aid and abet unfair practices.
These new powers are so significant that industry observers are already saying the bill would effectively make FTC Chair Jon Leibowitz an "Internet czar."
For his part, Leibowitz said in a statement to the energy and commerce committee that the "modest new authority" given to the commission "will help ensure that we have the tools necessary to fight fraud and go after those who perpetrate it."
Industry executives say that the existing curbs on rulemaking ability have contributed to the FTC's decision to support industry self-regulation of matters like online behavioral targeting and privacy.
"We'd hate to see them move directly to government regulation in all of these areas, but that's the prospect that we're facing if this is enacted," Zaneis says.
Currently, the FTC can only make rules aimed at curbing a prevalent practice. But the bill would remove that restriction, allowing the agency to enact regulations as long as there's a rational reason to believe the rule would stem from unfair and deceptive conduct. The bill also would provide for a faster rulemaking procedure.
A host of consumer groups and privacy advocates, including the American Academy of Child and Adolescent Psychiatry, Consumers Union, Center for Digital Democracy and the Electronic Frontier Foundation, are advocating in favor of the bill. They argue that the current restrictions on the FTC hinder its effectiveness.
"We believe that the FTC must play a more proactive role addressing critical consumer concerns, including privacy, online marketing, and food advertising to young people," the groups wrote last week to the leaders of the House Energy and Commerce Committee.
The bill also would enable the FTC to pursue civil actions without prior review by the Department of Justice. In addition, the measure would let the FTC impose civil penalties without prior rules or orders.
A provision that would allow the FTC to prosecute companies that aid or abet an unfair act could be especially damaging to marketers and intermediaries, says the Association of National Advertisers. "This would have serious implications for advertising agencies, media companies and other companies that play any role in the communication/sale/delivery process," ANA Executive Vice President Dan Jaffe said last week in a letter to lawmakers.
Observers say the full House will probably pass the bill by the end of the calendar year. The proposal is expected to move more slowly in the Senate, where lawmakers are still hammering out a draft of the bill.
Friday, October 16, 2009
IAB Calls For Reversal Of ‘Unfair and Unconstitutional’ FTC Blogger Regs
The Interactive Advertising Bureau is calling on the Federal Trade Commission to withdraw its recently revised guidelines governing dealings between bloggers and marketers. The ad trade group says the rules “unfairly and unconstitutionally” impose penalties on online media for practices, while exempting traditional media. Furthermore, in an open letter to FTC Chairman Jon Leibowitz, Randall Rothenberg, the IAB’s president and CEO, says the FTC’s distinction between offline media and online media, “constitutionally dubious” by invoking the First Amendment right to free speech. Release
Apart from the separate treatment of social media and traditional news organs, the IAB’s dispute zeros in on the FTC’s warning of an $11,000 penalty against bloggers for failing to disclose free promotional products from marketers they discuss online. The FTC very quickly sought to downplay the worries about the fine, after a firestorm grew following the release of the new guidelines, which were last updated in 1980.
As our Staci D. Kramer reported last week, Richard Cleland, assistant director, division of advertising practices at the FTC, said the “$11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. ... There’s no monetary penalty, in terms of the first violation, even in the worst case.” Instead, he said the FTC’s guidelines are intended to serve as education.
But there are still some doubts out there about whether the FTC means that. The IAB wants to make sure that no fines will be handed down and therefore wants the FTC to put it in writing.
“They—and we—are not arguing that bloggers and social media be treated differently than incumbent media,” says Rothenberg’s letter. “After all, most newspapers, magazines, radio stations and television networks, in recognition that Americans are embracing new forms of social communications, have established their own blogs, boards, Facebook pages, Twitter feeds, and the like. Rather, we’re saying the new conversational media should be accorded the same rights and freedoms as other communications channels.”
Apart from the separate treatment of social media and traditional news organs, the IAB’s dispute zeros in on the FTC’s warning of an $11,000 penalty against bloggers for failing to disclose free promotional products from marketers they discuss online. The FTC very quickly sought to downplay the worries about the fine, after a firestorm grew following the release of the new guidelines, which were last updated in 1980.
As our Staci D. Kramer reported last week, Richard Cleland, assistant director, division of advertising practices at the FTC, said the “$11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. ... There’s no monetary penalty, in terms of the first violation, even in the worst case.” Instead, he said the FTC’s guidelines are intended to serve as education.
But there are still some doubts out there about whether the FTC means that. The IAB wants to make sure that no fines will be handed down and therefore wants the FTC to put it in writing.
“They—and we—are not arguing that bloggers and social media be treated differently than incumbent media,” says Rothenberg’s letter. “After all, most newspapers, magazines, radio stations and television networks, in recognition that Americans are embracing new forms of social communications, have established their own blogs, boards, Facebook pages, Twitter feeds, and the like. Rather, we’re saying the new conversational media should be accorded the same rights and freedoms as other communications channels.”
Tuesday, October 13, 2009
Yahoo Settles Lawsuit - lawyers win, advertisers lose.
Yahoo Inc. has reportedly settled a class action lawsuit with some of its search advertising customers who weren't happy about where their ads were showing up.
Lawsuit administrator Rust Consulting sent an e-mail to members of the group that preliminary court approval of the settlement has been granted and posted copies of court documents here.
Yahoo customers who sued claimed that when ads they placed through "Sponsored Search" and "Contact Match," they showed up in spyware, domain name parking sites, typosquatting sites and other undesirable locations on the Web.
They sued the Sunnyvale company (NASDAQ:YHOO) for breach of contract, unjust enrichment, misrepresentation, civil conspiracy, and unfair business practices.
As part of the settlement, Yahoo agreed to offer a new filtering option for ads, and to modify how it handles disclosures and click fraud investigations:
It also agreed to develop and offer a way for customers to control where their Yahoo Ads appear.
Advertisers got screwed again, of the $4.3 million settlement, $4.17 million is going to the lawyers.
Lawsuit administrator Rust Consulting sent an e-mail to members of the group that preliminary court approval of the settlement has been granted and posted copies of court documents here.
Yahoo customers who sued claimed that when ads they placed through "Sponsored Search" and "Contact Match," they showed up in spyware, domain name parking sites, typosquatting sites and other undesirable locations on the Web.
They sued the Sunnyvale company (NASDAQ:YHOO) for breach of contract, unjust enrichment, misrepresentation, civil conspiracy, and unfair business practices.
As part of the settlement, Yahoo agreed to offer a new filtering option for ads, and to modify how it handles disclosures and click fraud investigations:
It also agreed to develop and offer a way for customers to control where their Yahoo Ads appear.
Advertisers got screwed again, of the $4.3 million settlement, $4.17 million is going to the lawyers.
Friday, October 9, 2009
3M In Click Fraud Over Two Weeks? Just The Beginning
A recently disbanded click fraud ring in China racked up $US3 million worth of clicks in two weeks. $US3 million that we’re aware of. Just how detectable is this whole business of racking up fraudulent ad revenue clicks?
That intricate mess of lines above represents a portion of DormRing1, the click fraud bunch that was caught in China. The lines show the relationship of some of the IP addresses involved in the fraud and how they are connected to some fraudulent ad clicks. The whole network actually “involved 200,000 different IP addresses and racked up more than $US3 million worth of fraudulent clicks across 2,000 advertisers in a two-week period”. Impressive and scary at the same time.
The trouble is that no one really knows how much ad revenue DormRing1 collected before they were caught. Click-fraud monitoring services such as Anchor Intelligence, the ones behind this catch, are evolving to keep up with the scale on which these rings are operating. It’s still difficult to judge just how well they’re doing as they’re having to infiltrate forums and gain the trust of the perpetrators in a manner reminiscent of drug busts. But as the criminals are getting more elaborate, the investigations are too.
That intricate mess of lines above represents a portion of DormRing1, the click fraud bunch that was caught in China. The lines show the relationship of some of the IP addresses involved in the fraud and how they are connected to some fraudulent ad clicks. The whole network actually “involved 200,000 different IP addresses and racked up more than $US3 million worth of fraudulent clicks across 2,000 advertisers in a two-week period”. Impressive and scary at the same time.
The trouble is that no one really knows how much ad revenue DormRing1 collected before they were caught. Click-fraud monitoring services such as Anchor Intelligence, the ones behind this catch, are evolving to keep up with the scale on which these rings are operating. It’s still difficult to judge just how well they’re doing as they’re having to infiltrate forums and gain the trust of the perpetrators in a manner reminiscent of drug busts. But as the criminals are getting more elaborate, the investigations are too.
Thursday, October 8, 2009
FTC Publishes Final Guides Governing Endorsements, Testimonials
Changes Affect Testimonial Advertisements, Bloggers, Celebrity Endorsements
The Federal Trade Commission today announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.
The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.
Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.
The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.
Celebrity endorsers also are addressed in the revised Guides. While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.
The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.
The Commission vote approving issuance of the Federal Register notice detailing the changes was 4-0. The notice will be published in the Federal Register shortly, and is available now on the FTC’s Web site as a link to this press release. Copies also are available from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,700 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.
MEDIA CONTACT:
Betsy Lordan
Office of Public Affairs
202-326-3707
STAFF CONTACT:
Richard Cleland
Bureau of Consumer Protection
202-326-3088
The Federal Trade Commission today announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.
The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.
Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.
The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.
Celebrity endorsers also are addressed in the revised Guides. While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.
The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.
The Commission vote approving issuance of the Federal Register notice detailing the changes was 4-0. The notice will be published in the Federal Register shortly, and is available now on the FTC’s Web site as a link to this press release. Copies also are available from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,700 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.
MEDIA CONTACT:
Betsy Lordan
Office of Public Affairs
202-326-3707
STAFF CONTACT:
Richard Cleland
Bureau of Consumer Protection
202-326-3088
Wednesday, October 7, 2009
FTC Disclosure Rules Affect Bloggers
The Federal Trade Commission has approved final revisions to guides concerning the use of endorsements and testimonials in advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The guides were last updated in 1980.
Bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. The revised guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement.
"We were expecting this [from the FTC] and have had guidelines in place to on what to do, when they are blogging, to disclose their relationship," Emilio Amodei, founder of BlogVertise, said during a session at Search Marketing Expo East here on Oct. 6.
Good news for the merchant or the product-pusher though: If a blogger breaks the rules, the blogger has to pay the fine, which could be upwards of $11,000 per offense, according to Amodei. BlogVertise acts as a middle man between product-pushers and bloggers who subscribe to the service.
But Amodei says he is not sure how the FTC is going to enforce the new rule, and thinks the logistics could get tricky. “Let's say it's a foreign blogger,” Amodei said. "They're not going to go to India and fine someone for not disclosing a relationship."
Bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. The revised guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement.
"We were expecting this [from the FTC] and have had guidelines in place to on what to do, when they are blogging, to disclose their relationship," Emilio Amodei, founder of BlogVertise, said during a session at Search Marketing Expo East here on Oct. 6.
Good news for the merchant or the product-pusher though: If a blogger breaks the rules, the blogger has to pay the fine, which could be upwards of $11,000 per offense, according to Amodei. BlogVertise acts as a middle man between product-pushers and bloggers who subscribe to the service.
But Amodei says he is not sure how the FTC is going to enforce the new rule, and thinks the logistics could get tricky. “Let's say it's a foreign blogger,” Amodei said. "They're not going to go to India and fine someone for not disclosing a relationship."
Monday, October 5, 2009
Study: All ages concerned with privacy issues
When it comes to private information it isn't only Boomers and Seniors who have concerns. Contrary to popular belief, the younger generations are also concerned about their private information - despite the fact that most have always used computers and the Internet.
by Kristina Knight
Professors from the University of California - Berkeley and the University of Pennsylvania have released the results of a joint study which indicates that young people and old are concerned about private information getting into the wrong hands. They found that approximately two-thirds of all consumers polled said they did not want tailored content if that meant they would be tracked via the Internet.
Other interesting findings include:
• 66% of respondents reported that tailored/targeted ads 'did not appeal'
• 55% of 18-24 year olds reported not wanting tailored ads and 37% reported not waiting tailored discounts
• 54% of 18 - 24 year olds report not wanting tailored news
• For those over age 65, 82% report not wanting tailored ads and 68% report not wanting tailored news
"It's a warning sign that we have to be careful about generalizations," said Joseph Turow, professor at the Annenberg School for Communication, University of Pennsylvania (via MediaPost). "For some reason marketers think because young adults grew up with the Internet they don't mind being tracked and targeted with online ads."
In defense of targeting capabilities such as behavioral, which is how much information about consumers is compiled, many experts in the field say the information collected can and usually is anonymous. Meaning that consumers need not worry that personal information is easily available.
Experts not involved in collected this data say consumers responded the way they did likely because of the way the questions were asked. They say that had the questions been worded slightly differently consumers would not have been as negative.
by Kristina Knight
Professors from the University of California - Berkeley and the University of Pennsylvania have released the results of a joint study which indicates that young people and old are concerned about private information getting into the wrong hands. They found that approximately two-thirds of all consumers polled said they did not want tailored content if that meant they would be tracked via the Internet.
Other interesting findings include:
• 66% of respondents reported that tailored/targeted ads 'did not appeal'
• 55% of 18-24 year olds reported not wanting tailored ads and 37% reported not waiting tailored discounts
• 54% of 18 - 24 year olds report not wanting tailored news
• For those over age 65, 82% report not wanting tailored ads and 68% report not wanting tailored news
"It's a warning sign that we have to be careful about generalizations," said Joseph Turow, professor at the Annenberg School for Communication, University of Pennsylvania (via MediaPost). "For some reason marketers think because young adults grew up with the Internet they don't mind being tracked and targeted with online ads."
In defense of targeting capabilities such as behavioral, which is how much information about consumers is compiled, many experts in the field say the information collected can and usually is anonymous. Meaning that consumers need not worry that personal information is easily available.
Experts not involved in collected this data say consumers responded the way they did likely because of the way the questions were asked. They say that had the questions been worded slightly differently consumers would not have been as negative.
Friday, October 2, 2009
Two-Thirds of Americans Object to Online Tracking
ABOUT two-thirds of Americans object to online tracking by advertisers — and that number rises once they learn the different ways marketers are following their online movements, according to a new survey from professors at the University of Pennsylvania and the University of California, Berkeley.
Joseph Turow, lead author of a study on consumers’ feelings about online tracking, said, “The most important thing is to bring the public into the picture, which is not going on right now.”
The professors say they believe the study, scheduled for release on Wednesday, is the first independent, nationally representative telephone survey on behavioral advertising.
The topic may be technical, but it has become a hot political issue. Privacy advocates are telling Congress and the Federal Trade Commission that tracking of online activities by Web sites and advertisers has gone too far, and the lawmakers seem to be listening. Representative Rick Boucher, Democrat of Virginia, wrote in an article for The Hill last week that he planned to introduce privacy legislation. And David Vladeck, head of consumer protection for the F.T.C., has signaled that he will examine data privacy issues closely.
Marketers are arguing that advertising supports free online content. Major advertising trade groups proposed in July some measures that they hoped would fend off regulation, like a clear notice to consumers when they were being tracked.
The data in this area, however, has been largely limited to company-financed research or Internet-based research, which survey experts say they believe is not representative of all Americans. So the study — among the first independent surveys to examine this issue — has attracted widespread interest.
“This research is going to ignite an intense debate on both sides of the Atlantic on what the appropriate policy should be,” said Jeffrey Chester, executive director of the privacy group Center for Digital Democracy, which did not work on the study.
The study’s authors hired a survey company to conduct interviews with 1,000 adult Internet users. The interview, which lasted about 20 minutes, included questions like “Please tell me whether or not you want the Web sites you visit to give you discounts that are tailored to your interests.” The results were later adjusted to reflect Census Bureau patterns in categories like sex, age, population density and telephone usage.
Tailored ads in general did not appeal to 66 percent of respondents. Then the respondents were told about different ways companies tailor ads: by following what someone does on the company’s site, on other sites and in offline places like stores.
The respondents’ aversion to tailored ads increased once they learned about targeting methods. In addition to the original 66 percent that said tailored ads were “not O.K.,” an additional 7 percent said such ads were not O.K. when they were tracked on the site. An additional 18 percent said it was not O.K. when they were tracked via other Web sites, and an additional 20 percent said it was not O.K. when they were tracked offline.
The survey company also asked about customized discounts and customized news. Fifty-one percent of respondents said that tailored discounts were O.K., and 58 percent said that customized news was fine.
On the advertising question, there was not a big difference between age groups. Marketers often use teenagers’ behavior on Facebook as anecdotal evidence that they do not mind handing over information. But 55 percent of respondents from 18 to 24 objected to tailored advertising.
“We sometimes think that the younger adults in the United States don’t care about this stuff, and I would suggest that’s an exaggeration,” said Joseph Turow, lead author of the study and a professor of communication at the Annenberg School for Communication at the University of Pennsylvania. His co-authors are professors at Berkeley’s law school and at the Annenberg Public Policy Center at the University of Pennsylvania.
The survey also asked nine true-or-false questions about privacy laws to see how knowledgeable Americans were about protection, including “If a Web site has a privacy policy, it means that the site cannot share information about you with other companies, unless you give the Web site your permission.” (The correct answer is “false.”) On only one question, regarding sweepstakes, was answered correctly by more than half of respondents.
Finally, the survey sought opinions on laws regarding tracking, asking if there should be a law that gave people the right to know everything a Web site knew about them. Sixty-nine percent of respondents said yes. Respondents also overwhelmingly supported a hypothetical law that required Web sites and advertising companies to delete all information about an individual upon request; 92 percent endorsed it.
“I don’t think that behavioral targeting is something that we should eliminate, but I do think that we’re at a cusp of a new era, and the kinds of information that companies share and have today is nothing like we’ll see 10 years from now,” Professor Turow said. He said he would like “a regime in which people feel they have control over the data that marketers collect about them. The most important thing is to bring the public into the picture, which is not going on right now.”
Stuart P. Ingis, a partner at the law firm Venable who represents the industry trade groups’ self-regulation coalition, said that the industry was taking steps to explain to consumers how behavioral targeting worked.
“The more people understand the practices and how the data is actually being used, that’s when the concerns disappear,” he said. Just because many Americans are not in favor of something does not mean it should be banned, he said, citing negative feelings about taxes.
But Mr. Chester, whose group is part of a privacy coalition calling for Congressional action, said the survey would be helpful. “This research gives the F.T.C. and Congress a political green light to go ahead and enact effective, but reasonable, rules and policies,” he said.
Joseph Turow, lead author of a study on consumers’ feelings about online tracking, said, “The most important thing is to bring the public into the picture, which is not going on right now.”
The professors say they believe the study, scheduled for release on Wednesday, is the first independent, nationally representative telephone survey on behavioral advertising.
The topic may be technical, but it has become a hot political issue. Privacy advocates are telling Congress and the Federal Trade Commission that tracking of online activities by Web sites and advertisers has gone too far, and the lawmakers seem to be listening. Representative Rick Boucher, Democrat of Virginia, wrote in an article for The Hill last week that he planned to introduce privacy legislation. And David Vladeck, head of consumer protection for the F.T.C., has signaled that he will examine data privacy issues closely.
Marketers are arguing that advertising supports free online content. Major advertising trade groups proposed in July some measures that they hoped would fend off regulation, like a clear notice to consumers when they were being tracked.
The data in this area, however, has been largely limited to company-financed research or Internet-based research, which survey experts say they believe is not representative of all Americans. So the study — among the first independent surveys to examine this issue — has attracted widespread interest.
“This research is going to ignite an intense debate on both sides of the Atlantic on what the appropriate policy should be,” said Jeffrey Chester, executive director of the privacy group Center for Digital Democracy, which did not work on the study.
The study’s authors hired a survey company to conduct interviews with 1,000 adult Internet users. The interview, which lasted about 20 minutes, included questions like “Please tell me whether or not you want the Web sites you visit to give you discounts that are tailored to your interests.” The results were later adjusted to reflect Census Bureau patterns in categories like sex, age, population density and telephone usage.
Tailored ads in general did not appeal to 66 percent of respondents. Then the respondents were told about different ways companies tailor ads: by following what someone does on the company’s site, on other sites and in offline places like stores.
The respondents’ aversion to tailored ads increased once they learned about targeting methods. In addition to the original 66 percent that said tailored ads were “not O.K.,” an additional 7 percent said such ads were not O.K. when they were tracked on the site. An additional 18 percent said it was not O.K. when they were tracked via other Web sites, and an additional 20 percent said it was not O.K. when they were tracked offline.
The survey company also asked about customized discounts and customized news. Fifty-one percent of respondents said that tailored discounts were O.K., and 58 percent said that customized news was fine.
On the advertising question, there was not a big difference between age groups. Marketers often use teenagers’ behavior on Facebook as anecdotal evidence that they do not mind handing over information. But 55 percent of respondents from 18 to 24 objected to tailored advertising.
“We sometimes think that the younger adults in the United States don’t care about this stuff, and I would suggest that’s an exaggeration,” said Joseph Turow, lead author of the study and a professor of communication at the Annenberg School for Communication at the University of Pennsylvania. His co-authors are professors at Berkeley’s law school and at the Annenberg Public Policy Center at the University of Pennsylvania.
The survey also asked nine true-or-false questions about privacy laws to see how knowledgeable Americans were about protection, including “If a Web site has a privacy policy, it means that the site cannot share information about you with other companies, unless you give the Web site your permission.” (The correct answer is “false.”) On only one question, regarding sweepstakes, was answered correctly by more than half of respondents.
Finally, the survey sought opinions on laws regarding tracking, asking if there should be a law that gave people the right to know everything a Web site knew about them. Sixty-nine percent of respondents said yes. Respondents also overwhelmingly supported a hypothetical law that required Web sites and advertising companies to delete all information about an individual upon request; 92 percent endorsed it.
“I don’t think that behavioral targeting is something that we should eliminate, but I do think that we’re at a cusp of a new era, and the kinds of information that companies share and have today is nothing like we’ll see 10 years from now,” Professor Turow said. He said he would like “a regime in which people feel they have control over the data that marketers collect about them. The most important thing is to bring the public into the picture, which is not going on right now.”
Stuart P. Ingis, a partner at the law firm Venable who represents the industry trade groups’ self-regulation coalition, said that the industry was taking steps to explain to consumers how behavioral targeting worked.
“The more people understand the practices and how the data is actually being used, that’s when the concerns disappear,” he said. Just because many Americans are not in favor of something does not mean it should be banned, he said, citing negative feelings about taxes.
But Mr. Chester, whose group is part of a privacy coalition calling for Congressional action, said the survey would be helpful. “This research gives the F.T.C. and Congress a political green light to go ahead and enact effective, but reasonable, rules and policies,” he said.
Monday, September 21, 2009
Report: 95% of clicks fraudulent?
They say that a click is a click, but according to a recent Mpire report, using AdXpose, all clicks aren't equal. Especially clicks generated from run-of-network (RON) online advertising buys. According to the report up to 95% of these clicks and up to 50% of the ad impressions are generated from fraudulent sources.
by Kristina Knight
AdXpose is Mpire's campaign analysis, verification and optimization technology. Researchers found that just over 50% of the ad impressions delivered and 95% of the clicks generated were potentially fraudulent. This traffic was hidden beneath layers of I-Frames, which are ad units that pull advertising content from another source. Researchers also found a large amount of URL padding. URL padding happens when a range of URLs are made available for an ad but only a few of the URLs are actually used.
Other interesting findings:
• Ad networks need to improve on 'above the fold' ad placement
• Mpire tested three campaigns with 11 campaign buys on 9 ad networks/exchanges
• More than 20 million impressions were served during the test
"Click fraud and impression fraud is far more pervasive than the industry has been willing to admit, yet thus far the industry has taken a laissez-faire approach to policing downstream traffic providers, leading to material waste in campaign budgets," said Marissa Gluck, principal analyst at Radar Research, the company that verified the research. "By delving deeper into site-level data, advertisers and agencies can get a better understanding of the impact of fraud on campaign ROI, and can thus take steps to focus their ad spend on the sites, networks and exchanges that deliver the most legitimate impressions and clicks."
Along with this report, comes news that ClickForensics has identified a new botnet called "Bahama Botnet". The botnet distributes malware, disguising itself as a high-quality source of advertising traffic. Just another reason for pay per click marketers to research advertising networks and pay close attention to how a campaign is performing from beginning to end.
by Kristina Knight
AdXpose is Mpire's campaign analysis, verification and optimization technology. Researchers found that just over 50% of the ad impressions delivered and 95% of the clicks generated were potentially fraudulent. This traffic was hidden beneath layers of I-Frames, which are ad units that pull advertising content from another source. Researchers also found a large amount of URL padding. URL padding happens when a range of URLs are made available for an ad but only a few of the URLs are actually used.
Other interesting findings:
• Ad networks need to improve on 'above the fold' ad placement
• Mpire tested three campaigns with 11 campaign buys on 9 ad networks/exchanges
• More than 20 million impressions were served during the test
"Click fraud and impression fraud is far more pervasive than the industry has been willing to admit, yet thus far the industry has taken a laissez-faire approach to policing downstream traffic providers, leading to material waste in campaign budgets," said Marissa Gluck, principal analyst at Radar Research, the company that verified the research. "By delving deeper into site-level data, advertisers and agencies can get a better understanding of the impact of fraud on campaign ROI, and can thus take steps to focus their ad spend on the sites, networks and exchanges that deliver the most legitimate impressions and clicks."
Along with this report, comes news that ClickForensics has identified a new botnet called "Bahama Botnet". The botnet distributes malware, disguising itself as a high-quality source of advertising traffic. Just another reason for pay per click marketers to research advertising networks and pay close attention to how a campaign is performing from beginning to end.
Wednesday, September 16, 2009
Adobe to Acquire Omniture in $1.8 Billion Deal
Adobe Systems Inc. agreed to buy software company Omniture Inc. for $1.8 billion, a deal designed to help customers track and make money from Web sites that were created with Adobe's programs.
Adobe said it will pay $21.50 a share in cash for Omniture, a 24% premium to Tuesday's 4 p.m. price. Omniture shares surged 25% in after-hours trading on the news, while Adobe shares declined 4.2%.
The announcement came as Adobe reported its profit fell 29% and revenue slid 21% in its latest quarter as the continuing downturn in media markets slows demand for its traditional software, such as Photoshop and InDesign.
Omniture, based in Orem, Utah, specializes in a field known as Web analytics. It provides to advertisers, media companies and other customers information about user activity, such as what Web pages they visit, how much time they spend there and what ads they click on. Customers may change their ads or Web sites based on such data, including data about the effectiveness of ads based on terms users type into search engines.
Deal Journal
Omniture Deal May Not Bring Change Adobe Wants Companies such as Ford Motor Co., Ameritrade Holding Corp. and Xerox Corp. pay monthly fees to access Omniture's services. The amount they pay typically reflects the Web traffic occurring on their sites.
Adobe, San Jose, Calif., said it plans to build code into its content-creation programs to help them exchange data with Omniture services, eliminating time-consuming programming by customers and helping more of them make money on their Web sites. "We really think that we can actually tranform how digital content is created," said Shantanu Narayen, Adobe's chief executive officer.
Web analytics generates about $600 million in world-wide annual revenue now, but the industry is expected to grow to $2.2 billion by 2011, according to a June 2008 estimate by J.P. Morgan.
Companies that compete with Omniture include Webtrends Inc. and Coremetrics. Google Inc., the search giant, also offers some analytic services.
Scott Kessler, an analyst at Standard & Poor's who tracks Omniture, said it has grown by buying smaller players in the market. But Omniture's business has been squeezed by the recession and the company has a mixed record of meeting Wall Street estimates, he said. It reported a loss of $44.8 million last year even as its revenue nearly doubled to $295.6 million. Partly for those reasons, Mr. Kessler remains skeptical about how quickly Adobe could benefit from the deal.
Suresh Vittal, an analyst at market researcher Forrester Research, was more optimistic. He said many aspects of Web sites aren't reliably measured now, and Adobe's ability to include such capabilities with its software could give site creators valuable new information.
Adobe said Omniture will become a new business unit. Omniture CEO Josh James will join Adobe as senior vice president of the new unit, reporting to Mr. Narayan.
The deal is expected to close in the fourth quarter of Adobe's 2009 fiscal year, which ends in November.
For the quarter ended Aug. 28, Adobe reported a profit of $136 million, down from $191.6 million a year earlier. Revenue was $697.5 million.
Adobe said it will pay $21.50 a share in cash for Omniture, a 24% premium to Tuesday's 4 p.m. price. Omniture shares surged 25% in after-hours trading on the news, while Adobe shares declined 4.2%.
The announcement came as Adobe reported its profit fell 29% and revenue slid 21% in its latest quarter as the continuing downturn in media markets slows demand for its traditional software, such as Photoshop and InDesign.
Omniture, based in Orem, Utah, specializes in a field known as Web analytics. It provides to advertisers, media companies and other customers information about user activity, such as what Web pages they visit, how much time they spend there and what ads they click on. Customers may change their ads or Web sites based on such data, including data about the effectiveness of ads based on terms users type into search engines.
Deal Journal
Omniture Deal May Not Bring Change Adobe Wants Companies such as Ford Motor Co., Ameritrade Holding Corp. and Xerox Corp. pay monthly fees to access Omniture's services. The amount they pay typically reflects the Web traffic occurring on their sites.
Adobe, San Jose, Calif., said it plans to build code into its content-creation programs to help them exchange data with Omniture services, eliminating time-consuming programming by customers and helping more of them make money on their Web sites. "We really think that we can actually tranform how digital content is created," said Shantanu Narayen, Adobe's chief executive officer.
Web analytics generates about $600 million in world-wide annual revenue now, but the industry is expected to grow to $2.2 billion by 2011, according to a June 2008 estimate by J.P. Morgan.
Companies that compete with Omniture include Webtrends Inc. and Coremetrics. Google Inc., the search giant, also offers some analytic services.
Scott Kessler, an analyst at Standard & Poor's who tracks Omniture, said it has grown by buying smaller players in the market. But Omniture's business has been squeezed by the recession and the company has a mixed record of meeting Wall Street estimates, he said. It reported a loss of $44.8 million last year even as its revenue nearly doubled to $295.6 million. Partly for those reasons, Mr. Kessler remains skeptical about how quickly Adobe could benefit from the deal.
Suresh Vittal, an analyst at market researcher Forrester Research, was more optimistic. He said many aspects of Web sites aren't reliably measured now, and Adobe's ability to include such capabilities with its software could give site creators valuable new information.
Adobe said Omniture will become a new business unit. Omniture CEO Josh James will join Adobe as senior vice president of the new unit, reporting to Mr. Narayan.
The deal is expected to close in the fourth quarter of Adobe's 2009 fiscal year, which ends in November.
For the quarter ended Aug. 28, Adobe reported a profit of $136 million, down from $191.6 million a year earlier. Revenue was $697.5 million.
Moving Flash Cookies Into Direct-Response BT
If you're confused about the ad networks or technology companies offering behavioral targeting, Tatto Media CEO Lin Miao says you're not alone. Consolidation is on the horizon, he says, and "smoke and mirror behavioral shops" will fall by the wayside within the next 12 to 18 months.
The problem is the industry has become "reckless" about using the word "behavioral" when referring to targeting ads online, he says. It not only creates chaos among advertisers and publishers trying to figure out the companies that actually offer the service, but it also has begun to affect what "behavioral targeting" means.
Miao predicts within the next two years BT will move away from being used as a reporting tool and into performance and direct-response-based metrics. As a reporting tool, the BT technology monitors and keeps track of the number of clicks and how consumers responded to ads. As a performance and direct response metric the targeting is done through Flash-based cookie and data tags that last between three and six months.
In the direct response model, advertisers don't pay for leads or actions until something happens. Publishers don't get paid on a CPM basis, but only if an action results from the campaign. "If you were an advertiser wanting to buy media on a site like eHarmony.com, you could go through a CPM network and buy traffic everywhere, which isn't that effective," Miao says. "Or you can choose a Tatto Media network to buy ads on eHarmony.com and target males ages 25 through 36."
The problem that continues to distress behavioral ad networks is the length of time a cookie remains on a person's computer. Legacy networks have built their tracking systems around regular cookies. The problem is the average lifespan is less than 15 days. Increasingly more browsers, such as Google Chrome and Microsoft Internet Explorer, successfully block cookie tracking. And we all know that this presents problems for ad networks trying to retarget consumers based on collected cookie and pixel tag information.
When Tatto began to develop its core behavioral frameworks and algorithms, it believed Flash cookies would remain the best way to slow the ability of consumers to delete cookies from their computers. Flash cookies are no different than regular cookies in terms of user privacy, but on average remain on a person's computer for more than three months.
Miao believe three months is enough time to accurately retarget consumers based on proprietary behavioral algorithm. Three months provides enough history as to what types of advertisements consumers may respond to, and how often they click or respond to certain ads. He has no doubt ad networks will turn toward Flash cookies in the future as a way to compete and gather the most relevant and precise information.
Miao views behavioral technologies as a complementary tool to Tatto's direct response initiatives. He believes the best way to innovate is demonstrate to advertisers through direct response that behavioral targeting can create efficiencies. Behavioral networks need to prove to clients the technology is sustainable and can provide real benefits to advertisers, publishers and consumers, he notes.
The problem is the industry has become "reckless" about using the word "behavioral" when referring to targeting ads online, he says. It not only creates chaos among advertisers and publishers trying to figure out the companies that actually offer the service, but it also has begun to affect what "behavioral targeting" means.
Miao predicts within the next two years BT will move away from being used as a reporting tool and into performance and direct-response-based metrics. As a reporting tool, the BT technology monitors and keeps track of the number of clicks and how consumers responded to ads. As a performance and direct response metric the targeting is done through Flash-based cookie and data tags that last between three and six months.
In the direct response model, advertisers don't pay for leads or actions until something happens. Publishers don't get paid on a CPM basis, but only if an action results from the campaign. "If you were an advertiser wanting to buy media on a site like eHarmony.com, you could go through a CPM network and buy traffic everywhere, which isn't that effective," Miao says. "Or you can choose a Tatto Media network to buy ads on eHarmony.com and target males ages 25 through 36."
The problem that continues to distress behavioral ad networks is the length of time a cookie remains on a person's computer. Legacy networks have built their tracking systems around regular cookies. The problem is the average lifespan is less than 15 days. Increasingly more browsers, such as Google Chrome and Microsoft Internet Explorer, successfully block cookie tracking. And we all know that this presents problems for ad networks trying to retarget consumers based on collected cookie and pixel tag information.
When Tatto began to develop its core behavioral frameworks and algorithms, it believed Flash cookies would remain the best way to slow the ability of consumers to delete cookies from their computers. Flash cookies are no different than regular cookies in terms of user privacy, but on average remain on a person's computer for more than three months.
Miao believe three months is enough time to accurately retarget consumers based on proprietary behavioral algorithm. Three months provides enough history as to what types of advertisements consumers may respond to, and how often they click or respond to certain ads. He has no doubt ad networks will turn toward Flash cookies in the future as a way to compete and gather the most relevant and precise information.
Miao views behavioral technologies as a complementary tool to Tatto's direct response initiatives. He believes the best way to innovate is demonstrate to advertisers through direct response that behavioral targeting can create efficiencies. Behavioral networks need to prove to clients the technology is sustainable and can provide real benefits to advertisers, publishers and consumers, he notes.
Monday, February 9, 2009
White House Cookies Stir Controversy
To bring more communication and transparency to the White House, a new Whitehouse.gov site was rolled out precisely at the stroke of noon on Inauguration Day. Within hours, there was already controversy.
The new White House Website makes use of cookies from WebTrends and from YouTube Inc. The concern centers on whether the cookies are capable of tracking an objectionable amount of private information about visitors to the site.
Much of this is not even news, as WebTrends had been in use on the White House Website for several years, though the Youtube cookies are new.
The information tracked by the cookies is as follows:
The White House, and WebTrends, the vendor, know the referring URLs that bring users to the WhiteHouse.gov site. They know the ID of any WebTrends cookie already installed on the visitor's system; the language the browser is set to; the time since the last visit; the current time; and whether Java, Flash, or Silverlight is installed.
YouTube, or, more broadly, Google (Nasdaq: GOOG), knows how many times YouTube videos are viewed by people via the White House Website. None of this data is tied to an individual. None of the data reveals that I visited Whitehouse.gov on Inauguration Day.
I think the challenge comes down to what is public and what is private. Let’s take an example: Say I am a rabid supporter of U.S. statehood for Quebec.
If I make a phone call from my house or cellphone to the offices of "Quebec the 51st State," that is clearly private information. The police, or any other government agency, would need a court order to learn that I made the call -- or that I called the offices of Internet Evolution just before phoning the Quebec campaign.
If I participate in a rally supporting Quebec statehood that is held on the streets of D.C., then my participation can be freely observed. It can be recorded, it can be taped -- there is nothing private about my actions. It may be seen via any number of cameras that now watch the streets in most major cities that I left Restaurant X and walked to the Quebec statehood rally.
The most private item that WebTrends could report to the White House is the summary data of how many people visited a site, say the Website for Restaurant X, immediately before visiting Whitehouse.gov. Is that data even private? Is that data like my sample phone call?
I, for one, am pleased to see the government using WebTrends (again, a decision that predates the current administration). It means they are buying an affordable software solution instead of spending my taxpayer dollars building unnecessary software. Plus, it means they are looking to track the success or value of their work.
If they build a new section on the Website that they think will provide a public service, they can then use the analytics from WebTrends to discover if many people or few people visit. If few people visit, then they can spend their limited dollars and staff time on other projects. These metrics help provide accountability!
I am quite biased when it comes to Web analytics. I implemented a Web analytics tool (a WebTrends competitor) back in 1999, and today that site represents the longest continually running implementation of Web analytics on the Internet. I have seen the value it brings.
Eating too many Girl Scout cookies is bad. But there is a time and a place to have a few. Likewise, computer cookies can be bad -- but at the same time, there are many times when using them provides great value.
The new White House Website makes use of cookies from WebTrends and from YouTube Inc. The concern centers on whether the cookies are capable of tracking an objectionable amount of private information about visitors to the site.
Much of this is not even news, as WebTrends had been in use on the White House Website for several years, though the Youtube cookies are new.
The information tracked by the cookies is as follows:
The White House, and WebTrends, the vendor, know the referring URLs that bring users to the WhiteHouse.gov site. They know the ID of any WebTrends cookie already installed on the visitor's system; the language the browser is set to; the time since the last visit; the current time; and whether Java, Flash, or Silverlight is installed.
YouTube, or, more broadly, Google (Nasdaq: GOOG), knows how many times YouTube videos are viewed by people via the White House Website. None of this data is tied to an individual. None of the data reveals that I visited Whitehouse.gov on Inauguration Day.
I think the challenge comes down to what is public and what is private. Let’s take an example: Say I am a rabid supporter of U.S. statehood for Quebec.
If I make a phone call from my house or cellphone to the offices of "Quebec the 51st State," that is clearly private information. The police, or any other government agency, would need a court order to learn that I made the call -- or that I called the offices of Internet Evolution just before phoning the Quebec campaign.
If I participate in a rally supporting Quebec statehood that is held on the streets of D.C., then my participation can be freely observed. It can be recorded, it can be taped -- there is nothing private about my actions. It may be seen via any number of cameras that now watch the streets in most major cities that I left Restaurant X and walked to the Quebec statehood rally.
The most private item that WebTrends could report to the White House is the summary data of how many people visited a site, say the Website for Restaurant X, immediately before visiting Whitehouse.gov. Is that data even private? Is that data like my sample phone call?
I, for one, am pleased to see the government using WebTrends (again, a decision that predates the current administration). It means they are buying an affordable software solution instead of spending my taxpayer dollars building unnecessary software. Plus, it means they are looking to track the success or value of their work.
If they build a new section on the Website that they think will provide a public service, they can then use the analytics from WebTrends to discover if many people or few people visit. If few people visit, then they can spend their limited dollars and staff time on other projects. These metrics help provide accountability!
I am quite biased when it comes to Web analytics. I implemented a Web analytics tool (a WebTrends competitor) back in 1999, and today that site represents the longest continually running implementation of Web analytics on the Internet. I have seen the value it brings.
Eating too many Girl Scout cookies is bad. But there is a time and a place to have a few. Likewise, computer cookies can be bad -- but at the same time, there are many times when using them provides great value.
Friday, February 6, 2009
Komando's Q & A: Don't worry about cookies
Question: I was recently alerted to a feature of Yahoo Groups. The site uses Web beacons to track users. So, how do I defeat the Web beacons? I clear the cookies from my browser, but is this enough?
Answer: All Yahoo sites use Web beacons. These are small image files, undetectable to the eye. They let Yahoo servers access your browser's cookies. I think you're worrying too much about the Web beacons. Information obtained through Web beacons won't be shared. You could clear the cookies from your browser, but this is a pain. Plus, I think people worry too much about cookies. They aren't dangerous, but many people still dislike them. If you're still bothered, I can help. You'll find some helpful tips at www.komando.com/news.
Q: I teach eighth grade and I'm worried about my students. Most use MySpace and many are posting inappropriate information. They don't seem to understand the risks the site poses. Can you help me persuade them to be safer on MySpace?
A: There is a lot of inappropriate content on MySpace. Some teens post sexual and drug-related messages. Others post sensitive information that predators could use. Your students may understand potential risks associated with MySpace. However, teenagers tend to think that they are invincible. So, present them with news stories about the dangers of misusing MySpace. You'll find many of these stories at www.komando.com/news. You'll also find my MySpace quiz. Here, students will have to find what's wrong with a typical MySpace profile.
Q: I heard about some changes in the iTunes music store. ITunes will be offering high-quality downloads. I'm really excited about this, but do I need a special iPod to play them?
Answer: All Yahoo sites use Web beacons. These are small image files, undetectable to the eye. They let Yahoo servers access your browser's cookies. I think you're worrying too much about the Web beacons. Information obtained through Web beacons won't be shared. You could clear the cookies from your browser, but this is a pain. Plus, I think people worry too much about cookies. They aren't dangerous, but many people still dislike them. If you're still bothered, I can help. You'll find some helpful tips at www.komando.com/news.
Q: I teach eighth grade and I'm worried about my students. Most use MySpace and many are posting inappropriate information. They don't seem to understand the risks the site poses. Can you help me persuade them to be safer on MySpace?
A: There is a lot of inappropriate content on MySpace. Some teens post sexual and drug-related messages. Others post sensitive information that predators could use. Your students may understand potential risks associated with MySpace. However, teenagers tend to think that they are invincible. So, present them with news stories about the dangers of misusing MySpace. You'll find many of these stories at www.komando.com/news. You'll also find my MySpace quiz. Here, students will have to find what's wrong with a typical MySpace profile.
Q: I heard about some changes in the iTunes music store. ITunes will be offering high-quality downloads. I'm really excited about this, but do I need a special iPod to play them?
Cookies - delicious or malicious?
It's a fact of modern life that we have to learn new skills if we are to keep up with the younger generation.
I don't mean we have to wear pants that could sleep a family of six, baseball caps with the beak sticking out to one side and adopt hand movements as if we are "scratching" on twin "decks" while "kicking rhymes".
What I mean is that as we get older and everything gets more complicated, we need to adapt to the technology of the day.
Our grandparents had radio and television to contend with, while our parents broke in video-recorders, CD audio technology and alarm clocks. While many are still 12:00 flashers (they never remember how to set the clock, hence the display shows a perennially-flashing 12:00), they did their best in an ever- changing technological landscape.
Fast-forward a decade and computers are our toy of choice. Many lament that computers are hugely complicated contraptions that we love to hate and the first time they break down we find we can't do without them.
The kicker is we need to learn all that computer lingo - words and terms we must know if we are to ever be the master of our machines.
Take cars, for example. We have to know at least some related jargon so we can explain what is wrong to our mechanic.
A typical exchange goes like this; "The engine makes a funny noise and won't start".
This, of course, isn't much help and the mechanic has to practically start from scratch to assess the problem.
On the other hand, if we rocked up and said "the cam-belt perambulator has failed, forcing a piston and valve contraction in the number three pot which caused the big-end to choke the gudgeon pin journal and now we're pretty certain the head will need to be planed", our mechanic would probably give us one of those looks that they reserve for "special" customers.
It may surprise you to learn that the computer universe is very close to this example.
It seems everyone knows someone who "knows about computers" and often those in the computer repair business only see machines after they have passed through several pairs of "helping" hands, which, it turns out, often make things worse.
My point is, there is all this computer-related jargon we have to learn, just to give the impression we know what we are doing.
Even something as simple as surfing the internet involves seemingly mission-critical messages telling us to make sure "cookies are enabled", or "Javascript is turned on" and other equally mysterious dialogues.
What does it all mean? What happens if we click Yes and navigate away from a secure site without it being encrypted? Will we be robbed? And aren't cookies dangerous?
Didn't we hear that allowing scripts to run spreads viruses? Our anti-malware software keeps finding "tracking cookies" and makes it sound like we should be scared.
Should we be? Well, yes and no.
Like everything with computers, the issue isn't so cut and dried.
To help websites be more clever, developers use snippets of code to make everything work properly. Cookies are just small scripts that are temporarily stored on our machines while we surf the web and are used for a wide variety of tasks like security, tracking our movements within the site, helping with logins, forms and shopping-cart systems, or simply to help sites provide the best content for our particular web browser.
Other scripts and Browser Helper Objects are there to make certain everything works as it should. This is a widely acceptable use of web technology.
The problem is that anything used for good can also be used by bad people to do bad things.
For example, very few cookies are malicious, but most anti-virus (AV) software treats them as a potential threat because one might be nasty.
Besides, AV software likes to be seen to be doing something to justify the price tag or, if it is free, validating your decision to use it.
Shopping sites like Amazon require you to have cookies enabled because, besides other uses, the shopping-cart system uses cookies to keep track of your products and purchases.
While it is unlikely you will ever see a truly malicious cookie, they are a reality, which is why opening your browser settings and enabling "delete cookies on exit" is a good idea.
Likewise, JavaScript and other scripting can be malicious but the majority of it is harmless. My advice is surf with JavaScript and cookies disabled and simply turn them on if required.
Learning any new language is hard but you only need to know a few choice words to be computer literate. I'll leave it up to you to decide which ones.
I don't mean we have to wear pants that could sleep a family of six, baseball caps with the beak sticking out to one side and adopt hand movements as if we are "scratching" on twin "decks" while "kicking rhymes".
What I mean is that as we get older and everything gets more complicated, we need to adapt to the technology of the day.
Our grandparents had radio and television to contend with, while our parents broke in video-recorders, CD audio technology and alarm clocks. While many are still 12:00 flashers (they never remember how to set the clock, hence the display shows a perennially-flashing 12:00), they did their best in an ever- changing technological landscape.
Fast-forward a decade and computers are our toy of choice. Many lament that computers are hugely complicated contraptions that we love to hate and the first time they break down we find we can't do without them.
The kicker is we need to learn all that computer lingo - words and terms we must know if we are to ever be the master of our machines.
Take cars, for example. We have to know at least some related jargon so we can explain what is wrong to our mechanic.
A typical exchange goes like this; "The engine makes a funny noise and won't start".
This, of course, isn't much help and the mechanic has to practically start from scratch to assess the problem.
On the other hand, if we rocked up and said "the cam-belt perambulator has failed, forcing a piston and valve contraction in the number three pot which caused the big-end to choke the gudgeon pin journal and now we're pretty certain the head will need to be planed", our mechanic would probably give us one of those looks that they reserve for "special" customers.
It may surprise you to learn that the computer universe is very close to this example.
It seems everyone knows someone who "knows about computers" and often those in the computer repair business only see machines after they have passed through several pairs of "helping" hands, which, it turns out, often make things worse.
My point is, there is all this computer-related jargon we have to learn, just to give the impression we know what we are doing.
Even something as simple as surfing the internet involves seemingly mission-critical messages telling us to make sure "cookies are enabled", or "Javascript is turned on" and other equally mysterious dialogues.
What does it all mean? What happens if we click Yes and navigate away from a secure site without it being encrypted? Will we be robbed? And aren't cookies dangerous?
Didn't we hear that allowing scripts to run spreads viruses? Our anti-malware software keeps finding "tracking cookies" and makes it sound like we should be scared.
Should we be? Well, yes and no.
Like everything with computers, the issue isn't so cut and dried.
To help websites be more clever, developers use snippets of code to make everything work properly. Cookies are just small scripts that are temporarily stored on our machines while we surf the web and are used for a wide variety of tasks like security, tracking our movements within the site, helping with logins, forms and shopping-cart systems, or simply to help sites provide the best content for our particular web browser.
Other scripts and Browser Helper Objects are there to make certain everything works as it should. This is a widely acceptable use of web technology.
The problem is that anything used for good can also be used by bad people to do bad things.
For example, very few cookies are malicious, but most anti-virus (AV) software treats them as a potential threat because one might be nasty.
Besides, AV software likes to be seen to be doing something to justify the price tag or, if it is free, validating your decision to use it.
Shopping sites like Amazon require you to have cookies enabled because, besides other uses, the shopping-cart system uses cookies to keep track of your products and purchases.
While it is unlikely you will ever see a truly malicious cookie, they are a reality, which is why opening your browser settings and enabling "delete cookies on exit" is a good idea.
Likewise, JavaScript and other scripting can be malicious but the majority of it is harmless. My advice is surf with JavaScript and cookies disabled and simply turn them on if required.
Learning any new language is hard but you only need to know a few choice words to be computer literate. I'll leave it up to you to decide which ones.
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