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Will the Real Top 20 Please Stand Up?

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Interactive media are blessed with a plethora of metrics: a wide variety of measures, and also a wide variety of measurers. Of course, as everyone also knows, blessings can also be curses. The curses of complexity and confusion that are digital media’s daily measurement diet spring up in everything we do as sellers and buyers of media.

The chaos is particularly blatant when one looks at unique user rankers. We don’t often see a pair of rankers from comScore and Nielsen side by side, and the view is a little disquieting. For example, take top news and information sites for March 2010. Only 7 of the top 10 properties are common across both comScore and Nielsen, and eight of the properties that appear on the comScore top-20 list do not appear on Nielsen’s.
Slide1.PNG Differences in site roll-ups and how sites are categorized have a huge impact in the rankings. For example Nielsen splits About.com and NY Times.com apart, while comScore rolls them up into New York Times Digital. Nielsen considers Wikipedia a “news and information” site (and the top one at that), while comScore does not. News is a particularly problematic category in terms of fluidity of definitions. But pick any category and stack the rankers side by side, and you’ll see a similar pattern of disparity.

Why does this matter? Syndicated audience measurement is one of the most common tools for planning and buying ads—and as this example shows, planners thinking about a basic news reach buy would make significantly different decisions depending on which vendor’s data they’re looking at.

What’s the IAB doing about this? The IAB’s Nomenclature project is a longstanding effort to establish common definitions around site categories, and some guidelines regarding rolling up sites into larger entities, which all measurement vendors could follow. Nothing will bring the numbers perfectly in line with one another, but this effort should reduce the level of the discrepancies to one that is less chaotic and easier to live with. It’s been tough to establish compromises around something as competitively sensitive as rankings. But we hope to see progress this year, and we’re grateful to everyone, vendors and publishers alike, who has contributed to the process.

What else is the IAB doing about this? The IAB is working across the ecosystem to tackle the problem of measurement in a very fundamental way, above and beyond fixing nomenclature. Measurement is a business process that is implemented by research scientists. Unless and until the business leaders from across the ecosystem define their business requirements and engage with each other on precisely what they need to know in order to manage their businesses better, the dichotomy of blessing and curse and attendant measurement confusion will continue to plague digital marketing and advertising.


The iPad's Threat to Advertising

I'm less interested in the Apple iPad and the spate of other interactive tablet devices about to flood into the consumer marketplace than in what they represent: another in a long line of attempts to semi-privatize the Internet.

Most "device revolutions" fail. For every iPod there are scores of Nomad Jukeboxes (of which I was a proud and happy early adopter). But this new revolution just might succeed, because it's not about the devices; it's about the consumer behavior impelling their invention. And it's that real - or presumed - consumer behavior that's generating a proliferation of not-so-secret gardens on the Web, many of them device-based - a phenomenon Forrester's Josh Bernoff calls the "Splinternet." Don't look now, but your television, telephone, radio, TiVo, cable box, and even your desktop PC are or are about to become gated intranets - with significant implications for marketers, media and agencies.

The biggest issue is complexity - the bogeyman that has haunted marketing and advertising from the dawn of the ad-supported Web. Publishers are waxing hopeful that the iPad will resolve the challenges that have seen their businesses sundered; weeks before its launch, The New York Times's David Carr even labeled Apple's device a "savior," arguing that it "represents an opportunity to renew the romance between printed material and consumer." Yet it's that very romantic impulse that should serve as warning that a pre-nup is needed, for without continuing, concerted, cross-industry commitment to managing transactional complexity in the marketing-media supply chain, the iPad and its ilk might only make publishers' problems worse.

Portal Period

The semi-privatization of the Internet has been creeping up on us for a long time - almost as long as the Web has existed, in fact, and so-called portals attempted to become the controlling influence over consumers' surfing habits. The portal period is generally considered a failure -- sort of the Paleozoic Era of the Internet -- but that's unfair. Rather, the first decade-and-a-half of the Web's gestation were largely about its proliferation and diversity, with consumers seeking navigation through an unfamiliar maze. That made search engines more valuable than portals.

But the walled gardens have always been there, and they've been growing in influence. What are Facebook and Twitter, after all, if not gated communities, built on Internet Protocol (IP), that live within the confines of the larger Web? While they're generously forgiving fenced neighborhoods (anyone can move in, regardless of race, creed, color, or brand preference), they are walled gardens nonetheless. They have their own rules and regulations, codes of conduct, behaviors, mannerisms and lingo. To identify them with the vague techie term "platforms" obscures what they really are: private communities, like cooperative apartment buildings in the big city. They allow you access to the larger, opportunity-laden and riskier world outside, but you'll always have your safe haven to return to.

Changing metaphors, if the Web is a "cesspool," as Google CEO Eric Schmidt has famously put it, maybe these are country club swimming pools - bacteria-free places to swim with your own kind. But - and this is important - however removed these country clubs were from the cesspools, they were still part of the larger town. The waste water still flowed to the same place. The kids may have been richer and snootier than you, but they went to the local public school. The same has been true with the Web's country club pools - until now.


Although the new IP-fueled devices promise to infuse interactivity into the last remaining analog nooks and crannies of our daily lives, the communities guarded by them threaten to upend that earlier, comfortable symbiosis. These devices and their proprietors have the ability to lock the community gates much tighter - or, at least, make the community so self-contained that any impulse to leave is restrained. They take the dogma that still guides so many digerati - "information wants to be free" - and reveal it as little more than a silly, thoughtless mantra.

Amazon's World

While the iPhone, with its "apps economy,", is the readiest example of these device-based walled gardens, Amazon's Kindle may be a better one. The iPhone, after all, still hints at the larger world - and the larger World Wide Web; the iPad, which some first-day critics labeled "just a big iPod Touch," is even more directly a creature of the Web. The Kindle, although IP-based, is utterly removed from it. Indeed, Amazon's walled garden for literati is more akin to a company town, with everything from access to product offerings to pricing tightly managed. Even the famously controlling Apple was moved to promote its relative benevolence to the media industry, noting that the iPad will offer book publishers and readers a choice of two price points, in contrast to the (lower) one required in Kindletown.

In fact, Apple has been a paragon of openness, compared with such other walled gardens as Sony's Playstation and Microsoft's xBox. True, the music industry has complained bitterly about how Apple's pricing policy for music and forced unbundling upset the financial requirements of the major recording companies. But at the same time, I can get virtually any type of music - regardless of codec, seller, or price - onto my iPod. (To this day, I have vastly more tunes there acquired from eMusic than from the Apple Store.)

More and more, "degree of openness" is looking to be a - perhaps the - central strategic differentiator among the different walled gardens of the Web. My favorite new gated community - Netflix Streaming - is fairly closed. Although it's accessible through numerous network devices (it comes through brilliantly on my TiVo HD), its offerings are solely those Netflix makes available - one reason I believe Netflix will become a financing powerhouse in Hollywood and among independent producers before too long.

Another favorite of mine, Boxee (which I access on my 46"-inch Samsung through the ATVFlash package of Apple TV hacks), is reasonably open. It offers widgets for scores of online video purveyors, and looks like it wants to be a remote control and organizing tool for as much digital video content as exists. (Boxee's ongoing tussle with Hulu is evidence of the "openness" contests beginning to shake up the digital video marketplace.)

Open TV

Boxee, which has announced imminent plans to release a proprietary set-top box, may even be setting itself up in direct opposition to the television set manufacturers that are bringing to market network-connected HDTV's with apps built directly into the screens, in what look to be totally closed systems. This is an issue I expect Boxee CEO Avner Ronen will address in his keynote presentation next month at the IAB Annual Leadership Meeting.

"Degree of openness" is, as I suggested, a strategic decision companies will have to make. There's no morality attached to it, the information-wants-to-be-free crowd notwithstanding. Some companies will thrive by remaining as porous as possible, while others will succeed by locking their gates. Consider Citigroup analyst Mark Mahaney's recent research note on Netflix:

We believe that NFLX is benefiting from a materially improved all-in product offering with a) improved DVD-By-Mail delivery service, b) expanded Streaming selection (17,000+ titles), and c) materially improved user interfaces via gaming devices (xBox, PS3) and Web-integrated CE devices and TVs. The ongoing shuttering of DVD rental stores is also helping. And the end result is higher customer satisfaction (reduced churn) and deeper competitive moats. Add all this to a increasingly efficient biz model (rising Gross Margins), and you’ve got an Internet Core Holding.

"Deeper competitive moats" are something that, inevitably, marketers, advertisers and media will need to learn to cross. The iPad won't necessarily get them to the other side. Far from being their savior, it could turn out to be a version of Charon, ferrying them across the River Styx to Hades.

Seamless Scale

I'm not even thinking about the obvious calculations - such as, how strictly will Apple set the terms and conditions, including pricing and customer-data control, for publishers seeking to sell their goods onto the iPad? A much more serious question is this: How fragmented will the advertising supply chain become? In deeply practical terms, if you work in advertising,your future depends on how companies like Apple intend to answer that question.

Put simply, a company's opportunity to create, sell and use advertising effectively and profitably will depend on its ability to deliver it seamlessly across multiple devices. Fostering seamless delivery across multiple sites has been the rationale underlying the IAB since our founding 15 years ago. Yet as successful as we've been in standardizing advertising unit formats, measurement guidelines, work-flow processes, and the like, other central standards have proved elusive. For example, the creative agencies on the IAB Agency Advisory Board have said categorically that their single greatest obstacle to advertising effectiveness and growth is their inability to deliver the same rich-media ads to tens of millions of households across multiple sites because, as they put it, "the rich media toolkit differs too much from site to site."

The proliferation of device-based walled gardens risks making our complex supply chain even more fragmented and complicated than it's been. As Forrester's Bernoff wrote, "Web marketing has grown since 1995, based on the idea that everything is connected. Click-throughs, ad networks, analytics, search-engine optimization -- it all works because the Web is standardized. Google works because the Web is standardized. Not any more. Each new device has its own ad networks, format, and technology." The Apple iPad's lack of Adobe Flash - a core component of much interactive display advertising - only serves to underscore how splintered the advertising economy could become.

But I disagree with Bernoff's conclusion about the Splinternet. Don't "try to unify things again," he says. "The shattering cannot be undone."

Supply Chain Detente

It must be, though, if ad-supported media are to survive. This prompts two suggestions:

  • Device manufacturers and the proprietors of other walled gardens should work collaboratively to adopt consistent standards to allow the advertising and marketing economies to flourish. Beat your brains out competitively, but don't subvert the advertising economy. Join the IAB and contribute to supply chain detente.
  • To the degree that the walled gardens create impediments to scale, publishers need to find other sources of revenue. Media companies must redouble their efforts to add marketing services to their sets of offerings.

Terms & Conditions 3.0 in the news

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Jim Ewel, CEO of Adometry, wrote an article for MediaPost’s Blog today about the IAB’s updated Standard Terms & Conditions. Check out his post, “Why The New IAB Guidelines Are Good For Everyone and discover how the IAB is moving interactive advertising toward becoming even more transparent and accountable. To learn more about one of the industry’s hottest topics, be sure to sign up for our  Terms & Conditions 3.0 Webinar taking place January 26th at noon.


VAST Buzz

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Andy Atherton, co-founder and chief operating officer of Brand.net, wrote an article that appeared in today’s AdAge about VAST (Digital Video Ad Serving Template). We think  “Ad Network? Video Network? Why Not Both?” takes an interesting look at how VAST opens the door to new innovations and technical advancements in online video advertising. Digital video’s growth is a hot topic in the industry, and its supporting architecture between video players and servers is something the IAB has standardized. In fact, it will be the subject of a panel at the upcoming IAB Annual Leadership Meeting: Ecosystem 2.0 on February 21. Don’t miss it, register today.


Will Congress Break Internet Advertising?

(This article was published earlier today in The Hill.)

The U.S. Congress – the place where former Alaska Senator Ted Stevens once declared the World Wide Web
“a series of tubes” – is not known for technological erudition, so it has wisely kept its hands off the Internet, the greatest economy-boosting innovation of our lives. “The last thing we need,” Rep. Cliff Stearns astutely observed just last week, “is a Government takeover of the Internet.”

I wish he’d tell that to Rep. Rick Boucher – his would-be partner on a still-unseen bill that promises to erode the burgeoning field of e-commerce, harm ad-supported news and entertainment media, and destroy the tens of thousands of small businesses in all 50 states that have come to depend on interactive technologies for marketing, retailing, and customer connectivity.

Writing last Tuesday in The Hill, Mr. Boucher declared his intent to introduce legislation to provide “some baseline protections in the online space” aimed at “protecting consumer privacy.” But within this seemingly laudable proclamation lies either a misunderstanding of how interactive media actually work – or an active desire to hinder the medium’s growth, and jeopardize the 3.1 million jobs and 2.1 percent of U.S. GDP that depend on it.

Advertising is the engine of the consumer economy, and fundamentally the only way American shoppers can compare prices, discover products, and learn about new stores and sales in their neighborhood – and the sole way businesses can get this information to them. Yet the Congressman wants to legislate its elimination. “If someone does not want a website he visits to use information it collects to deliver ads to him,” he writes, “he should be able to opt out of that use.” Worse yet, Rep. Boucher says “if a website wants to provide information to an unrelated third party, it should procure that Internet user’s affirmative opt-in consent.”

But the Internet is built on information – most of it managed by “third parties.” Indeed, about 90 percent of online display advertising is delivered by third-party ad-serving companies. Third-party management of the information units called “cookies” is what limits the volume of irrelevant advertising a consumer receives online. Rep. Boucher might as well title his bill “The Spam Preservation Act of 2010.”

But Rep. Boucher (shown left) isn’t putting only Internet infrastructure at risk. His most disturbing proposal is to place the burden for consumer privacy protections on individual Web sites ­- on the local newspaper’s dot-com affiliate, the cable network’s online feed, and the solo blogger alike. His legislation would force all publishers to implement cumbersome and expensive means to stop ad-distribution to any consumer who demands it, and shatter the systems that enable publishers to provide advertisers reliable measures of their circulation and advertising delivery – the currency that enables publishers to get paid for their work.

Why does Rep. Boucher want to imprison the Internet economy? He says his proposal will “encourage greater levels of general Internet usage and e-commerce.” But government intervention hardly seems necessary, given the enormous growth both have seen. A recent University of Southern California study found that in 2008, the average American spent 17 hours per week online, up from 15.3 hours in 2007 and only 9.4 hours in 2001. What were they doing? Among other things, they were shopping. Online retail sales during the recession-soaked 2009 holiday season increased 5 percent from 2008, with consumers spending $27 billion more than last year.

Everyone in this diverse, mushrooming industry would agree with Rep. Boucher that risks to data security and identity theft must be dealt with forcefully. But to conflate these legitimate dangers with the broader, fuzzier notion of “consumer privacy” is misguided and ultimately more dangerous than the original threat.

Our industry takes consumer privacy very seriously; after all, without the consumer - and consumer trust - there is no internet economy. This is why industry has moved aggressively to provide greater protections. In July, a coalition of five major trade associations, representing thousands of advertisers, marketers and publishers, released comprehensive principles for industry self-regulation, which would create strong enforcement of consumer privacy protections under the auspices of the Better Business Bureau. These principles embrace and expand on many of the concerns raised by consumer groups and by the Federal Trade Commission (whose officials have publically praised the coalition’s achievements).

This increasingly vigorous system of self-regulation and education is working. Even the Center for Democracy and Technology, a consumer advocacy group, in a tally of thousands of complaints filed with states attorneys general over Internet-related abuses in 2006-07, found only one case relating to privacy – a case already covered by existing law.

Rep. Boucher should take the advice of his putative co-author, Congressman Stearns. The Florida Republican says government regulatory “interference should be undertaken only where there is weighty and extensive evidence of abuse.” We could not agree more.

 

IAB Metrics Blog Welcome Edition

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metrics-blog-header.gif As we close out the year, take stock of accomplishments and prepare for better days ahead, one of the few constants in the rapidly evolving interactive media world remains measurement troubles. Quite recently (Monday, December 7th), Ad Age featured a piece about a proposed change to Nielsen’s @Plan service and the vast data inconsistencies that change is causing compared to the old methodology.

The @Plan methodology change, now in beta, should be heralded as an improvement. It is fairly common knowledge that unobtrusive measures of behavior are more accurate than recall based measures. However, the reported inconsistencies tell us that something is really wrong here. Most likely, the current method is completely wrong in which case 10 years of data use and decisions based on that data are questionable. Maybe the new methodology is wrong or maybe it is actually right. Or, the beta is so full of bugs that the new data cannot be relied upon to provide an indication of what the numbers will look like. The uncertainty points to fundamentally flawed business approaches.

Buggy business, you say? Yes. One of the two syndicated measurement services introduces a beta of a new methodology and its clients are already leaking results to the press. The proposed @Plan change is sowing negativity even before it is released. What resonates is not the beta and not that it is likely an effort to improve measurements and not that the @Plan clients are leaking data from a test. What resonates is that interactive measurement sucks. Once again, as an industry, we are showing the advertising community that we are our own worst enemy.

The IAB represents the entire industry and advocates transparency among all parties. Clearly, some of the old rules of media measurement simply do not apply in a transparent world. Research vendors and their clients are accountable to all of the many sites that are not purchasing data when they change methodologies and talk to the press.

It is time that IAB members took advantage of the power of a community of business people who truly want to make interactive media live up to its promise of being most measurable and most accountable. We are that community. We, at the IAB, are who we serve and until the members, publishers and vendors alike, avail themselves of the leadership and power of community, we likely will continue to see public relations fiascos about flawed measurement well into 2010 and beyond.

This inaugural edition of IAB Metrics Blog invites you to dialogue with us, to praise or critique, to propose solutions. Most of all, we invite you to make the IAB the standard bearer in metrics that it is for many other areas of interactive advertising.

When Sir Martin Sorrell, Executive Chairman of the WPP Group and for two decades arguably the most powerful individual in advertising, appeared on The Charlie Rose Show last May, the conversation was more remarkable for what he didn’t say than for what he did say.

He spoke of the “significant shift to digital” spending among his clients, noting that 25% of the global marketing services group’s revenues now derive from interactivities. He said “the importance of technology in our business has mushroomed,” and spoke at length about Google, and about his own acquisition of the “remarkably successful” online advertising network 24/7 Real Media, and of TNS Millward Brown, his data, measurement, and analytics unit.

But not once did he mention his ownership of two of the greatest brand names in advertising, companies whose hostile acquisitions 20+ years ago put Sir Martin on the world map: Ogilvy and J. Walter Thompson. Although he nodded in the direction of “the great idea” – ad agencies’ value proposition for the better part of 60 years -- he also gave it the back of his hand. “People in the advertising business, in the traditional media advertising business, would say the message determines the medium,” Mr. Sorrell said. “I would say that has totally changed.”

But of course, it has not totally changed. Rather, it’s the ground on which one of the greatest battles in both business history and social history is being fought. The question at the heart of it, although never purely articulated, is likely to determine the fortunes of every company that sells goods or services to consumers or customers.

The issue is this: Is marketing a strategic resource or a procured commodity?

If you listen closely, you’ll discern that this question is tearing apart the entire marketing-media ecosystem, with combatants staking out positions on either side of an increasingly great divide. On one side, people are speaking the language of efficiency: of online networks, demand-side exchanges, real-time bidding, inventory and impressions, buying agencies and procurement offices, of driving the marginal cost of production and distribution of billions of commodity products called banners, spots, and pages as close to zero as they can. On the other side of this gap are people speaking the language of growth: of brand affinity, premium price realization, consumer intimacy, dialogue, social media and the social graph, and of the insights that can generate consumer satisfaction and new revenue streams.

At times, the fissure seems akin to a civil war, with brother fighting brother over unconsidered ideologies. Holding company owners are battling their own agencies. Brand makers’ Chief Marketing Officers are fighting their companies’ Chief Financial Officers. Measurement companies are measuring the wrong things, incurring the ire of marketers and media alike. Advertising pricing systems in place for generations are coming under fire. Publishers’ sales forces are trying to keep up with the mixed messages.

Meanwhile, the people who really matter – the Chief Executive Officers at consumer marketers – are just beginning to wake from their inattention to render a verdict on where their funds will flow. I’m hoping this analysis – admittedly quite long, and reeking of history – will help.

An Open letter from Randall Rothenberg to FTC Chairman Jon Leibowitz, calls on FTC to rescind Blogger rules.


Jon Leibowitz, Chairman

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, DC 20580

Dear Mr. Chairman:

So there I was last Saturday, about to send out on my Twitter feed -- which automatically updates my Facebook page and links to my personal blog -- a photograph of this wonderful baked halibut dish I'd just made as a surprise for my wife. I was in the middle of typing a rave review of the recipe, which I'd pulled from my favorite cookbook, Delicioso! The Regional Cooking of Spain by Penelope Casas. But before I could press the “post” button, I stopped and canceled the whole thing.

I remembered that the book was a freebie, sent to me by an editor at the Alfred A. Knopf publishing house 13 years ago. And I didn't want you guys to haul me into court and fine me for violating the rules you’ve just promulgated to muzzle social media.

I know what you’re thinking – I’m just confused. But so are the 22 million bloggers currently collecting audiences in the United States and the nearly 140 million Americans registering news and opinions through social media channels like Facebook, MySpace, Friendster, and Twitter. The source of the confusion: The new set of Guides Concerning the Use of Endorsements and Testimonials in Advertising, issued on October 5 by the Federal Trade Commission that you chair.

As you're undoubtedly aware, the revised Guides, an update of principles the Commission originally established in 1980, have generated a firestorm of controversy within the ad-supported interactive media industry. Of particular concern are footnotes, asides, and elaborations in the Guides – as well as reported commentary by Commission staff – which indicate that opinions published by individuals have less protection than speech promulgated by large corporations; that “traditional” distribution channels deserve more protection than innovative online channels; and, finally, that the Internet, the cheapest, freest, most accessible communications medium ever invented, should have less freedom than other media.

Different Disclosure Requirements

It’s the Commission’s own words that have sewn this controversy and confusion. On pages 47 and 48 of the 81-page Guides, your staff

...acknowledges that bloggers may be subject to different disclosure requirements than reviewers in traditional media. In general, under usual circumstances, the Commission does not consider reviews published in traditional media (i.e., where a newspaper, magazine, or television or radio station with independent editorial responsibility assigns an employee to review various products or services as part of his or her official duties, and then publishes those reviews) to be sponsored advertising messages. Accordingly, such reviews are not “endorsements” within the meaning of the Guides...

In contrast, if a blogger’s statement on his personal blog or elsewhere (e.g., the site of an online retailer of electronic products) qualifies as an “endorsement” – i.e., as a sponsored message – due to the blogger’s relationship with the advertiser or the value of the merchandise he has received and has been asked to review by that advertiser, knowing these facts might affect the weight consumers give to his review.

With all due respect, Mr. Chairman: Huh? Does the FTC really intend to probe America’s opinion-mongering apparatus this closely? Do you have a team of Freuds and Jungs able to examine “the weight” consumers give such opinion – and the way they weigh that weight?

Naturally, this expedition from Oceania – that’s the place Big Brother ruled – should be worrisome to all Americans, and to all viewers, readers, listeners, users, and providers of any communications medium. But for the 400 members of the Interactive Advertising Bureau, most of which are small and medium-sized enterprises struggling to build their businesses in the face of the worst decline in marketing spending since the 1930’s, the implication that online social media represent a separate class of communications channels with less Constitutional protection than corporate-owned newspapers, radio stations, or cable television networks is of particularly grave concern.

They – and we -- are not arguing that bloggers and social media be treated differently than incumbent media. 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.

Stop Deceptive Advertising

All of us would agree that false and deceptive advertising should be stopped, and penalized when it slips through and is caught. We agree that paid testimonials and endorsements should be labeled. But in taking business ethics and attempting to give it the force of law, the Commission is stretching the definition of remuneration to ludicrous lengths. More frightening – certainly to the 22,000 womens-issue bloggers” on BlogHer, the 218 sports-fan facilitators on SB Nation, and the 302 people Tweeting to me daily – is that the FTC’s new Guides open the door to extremely selective pursuit and prosecution of those least able to defend themselves against government's hammer: the solo entrepreneurs and opinionated individuals who are most vital to the functioning of our democracy and economy.

That fear, I fear, is supported by the Commission’s own words. For example, in an interview with the blog edrants.com, FTC Assistant Director of Advertising Practices Richard Cleland took decades of common practice in offline media -- specifically the acceptance by reviewers of free books from publishers -- and said that bloggers engaging in the same activities could be subject to prosecution. “The primary situation is where there’s a link to the sponsoring seller and the blogger,” said Mr. Cleland. The repeated supply of free books could constitute “compensation,” thus triggering an FTC review and, possibly, sanctions.

“You can return it,” Mr. Cleland said, when asked how a social mediator could avoid this fate. “You review it and return it. I’m not sure that type of situation would be compensation.” Otherwise, “if a blogger received enough books, he could open up a used bookstore.”

The ignorance of established offline media practices is more than mildly surprising. Take a walk through New York’s mecca of used books, The Strand, or the Portland emporium Powell’s, and you’ll find bin upon bin of “reviewers’ copies,” direct contravention of Mr. Cleland’s declaration that “most of the newspapers have very strict rules about that and on what happens to those products.” (My own shelf of review copies from my days as a journalist attest to how wrong he is.)

Shackle Online Media

But of greater concern is that the Commission is translating this ignorance into rules that would specifically shackle online media while exempting our offline cousins and competitors from equivalent constraint. Publish? You might perish: “Consumers who join word of mouth marketing programs that periodically provide them products to review publicly (as opposed to simply giving feedback to the advertiser) will also likely be viewed as giving sponsored messages.” Have a lot of Facebook friends? Better watch it, you dot-commie: “If that blogger frequently receives products from manufacturers because he or she is known to have wide readership within a particular demographic group that is the manufacturers’ target market, the blogger’s statements are likely to be deemed to be ‘endorsements.’”

Indeed, to copious industry protests that provision of free samples, tickets, and services to independent reviewers has been a staple of media since media began and shouldn’t be regulated more strictly online than off, the Commission simply disagreed and said it will “consider each use of these new media on a case-by-case basis for purposes of law enforcement.” So if Niero Gonzales fails to flash “freebie” across each review of a first-person shooter posted on his gamer site Destructoid.com, will he be dragged down to Pennsylvania Avenue for a civil investigation? If I blog on randallrothenberg.com about the dozens of free management books I receive each year from publishers, will I, John Wiley & Sons, or Harper Business be subject to a penalty? Again with all due respect, Mr. Chairman, the Commission’s Guides really provides no guidance at all.

You must know that, because in the days following the release of the revised Guides, the FTC has been furiously backtracking about their implications, in an apparent attempt to soothe the blogosphere. "We are not planning on investigating individual bloggers," Mary Engle, the Commission’s Associate Director for Advertising Practices, told reporters this week. "We will be focusing any enforcements on advertisers, not on individual endorsers.”

But the Commission is being disingenuous. “The recent creation of consumer-generated media means that in many instances, endorsements are now disseminated by the endorser, rather than by the sponsoring advertiser,” the Guides state. “In these contexts, the Commission believes that the endorser is the party primarily responsible for disclosing material connections with the advertiser.

Individuals More Liable

In other words, the Guides DO allow you to pursue bloggers. They DO hold individuals more liable than larger corporations. They DO explicitly say online social media have less protection than offline corporate media. They DO obstruct online companies’ opportunities to drive cultural conversation more than offline companies’. They DO threaten with prosecution book publishers, movie producers, and other companies that supply products to individual social media conversationalists.

This confusion easily could have been avoided. The IAB and other industry organizations clearly identified the risks to free expression and provided the FTC significant, formal First Amendment guidance when you first mooted the new guidelines earlier this year. We offered to bring in bloggers, social media executives and others from among our membership and work with you to develop practical guidelines and self-regulatory mechanisms that would protect consumers from real harm, while assuring that independent opinion in digital media isn’t stifled.

But Commission staff did not follow up with us on our offer, held no public hearings on the proposed Guides, and ultimately dismissed our concerns. Instead, they took the perverse - and Constitutionally dubious - step of saying that individuals writing in social media bear greater liability than do those writing for offline, one-way media.


Mr. Chairman, these are the types of vital regulatory issues that, if decided without due care and reasoned judgment, will impair the continued growth of news and content in the online space. I urge the Commission to retract the current set of Guides and to commence a fair and open process in order to develop a roadmap by which responsible online actors can engage with consumers and continue to provide their invaluable content and services.

Regards,

Randall Rothenberg

President and Chief Executive Officer

Interactive Advertising Bureau

The Buzz Around Mobile Marketing

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With our Mobile Marketplace coming up on July 13, we've compiled a few articles to help bring you up to date on what's going on in mobile marketing today.


In this ADWEEK article, branding and action begin to merge in cyberspace marketing messages

"Marketers see a benefit of using display to support brand building on online as well as on mobile channels, especially through use of the rich media [interactive display],.."

 It's never too early to start learning about Mobile Marketing according to this ClickZ article

"Mobile marketing is more about consumer touchpoints than media math. Before the question of whether to use mobile gets to the plan level, which is fraught with tough decisions and fights for survival, marketing leaders should be planning to use it far earlier in the decision process."

A few good tips from Eric Bader on how to market through mobile:

"Unlike static and one-way communications channels, mobile is about context and behaviors -- great things for marketers. Here are a few ways to market through mobile that can be especially effective in reaching mobile consumers."

Adage reveals How Mobile Makes Bricks-and-Mortars Retail Accountable

"This is vastly important right now. In this economic environment, consumers are spending less, switching brands and going online to hunt for deals. Still, almost everyone makes unplanned purchases, and half of those purchase decisions happen in the aisle. Mobile presents a tremendous opportunity for brands to claim the last few feet and turn browsers into buyers."

View our full agenda and register today!

What:   IAB Marketplace - Mobile
When:  Monday, July 13
Where: The Roosevelt Hotel
            Madison Ave at 45th St.
            New York, NY 10017







Follow IAB on Twitter at the Games Marketplace

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