were the opening remarks I gave a few moments ago at the Interactive
Advertising Bureau’s first-ever Audience Measurement Leadership Forum.
That even is taking place right now at the Marriott New York Hotel in
I have spoken and written about
growing up as the son of a market and media researcher. What I have
never said publicly is that my life has been framed by market and media
research. Today, for the first time, I will tell that story.
My father entered TempleUniversity in Philadelphia
in 1948, to pursue a degree in marketing - a brand new major at the
school, and one that combined his interests in business, radio and that
new invention, television.
It was a good choice for a Jewish boy
from Northeast Philly, for media research was one of the few areas in
white collar business that had been open to Jews. That was true even in
the advertising agency business, which today we recall for its
friendliness to minorities. Other than in research departments, that
had not been the case: One historian who reviewed the 1931 edition of Who’s Who in Advertising found only 92 identifiably Jewish names among the 5,000 people listed.
My father’s first post-college job was at the Benson & Benson research company in Princeton, N.J., which had been founded by Larry Benson, previously the managing director of the Gallup Poll.At that time, Princeton was the Silicon Valley of research. Startup companies dotted Witherspoon and Nassau Streets, most of them, like Benson & Benson, founded by refugees from Gallup.Later,
when I was fortunate enough to attend the university located in that
town, my Dad, referring to his walk from the train station to his
office, liked to say he had “passed through Princeton.”
It was a not-so-subtle acknowledgement that in the 1950’s, there were
precious few real opportunities for kids of his background to have
passed through Princeton.
Of course, by that time, he’d moved from Philadelphia with his family to the New York
area. He’d been hired by NBC in 1957 to do research on the public’s
potential reaction to another forthcoming invention, color television.
His wife - my mother - had started up a small company that trained
interviewers to go out into the field and conduct survey research.
Their eldest child - that would be me - had made pocket money during
high school by conducting hundreds of these interviews. Among my more
pungent memories is lugging a 20-pound contraption called a “tachistocope” around the richest and hilliest sections of Ridgewood, N.J.,
trying to find scotch drinkers over 50 willing to let me into their
mansions to show split-second flash images of different actors trying
out for the title role in the Ambassador Scotch print advertising
I learned that I liked asking questions for a living. I also learned
that there is nothing more difficult than trying to find in a six block
radius in Denville, N.J.
a woman over 50 who is willing to test a vaginal deodorant. So I became
a newspaper reporter, instead. Grilling Presidential candidates, I can
attest, is much easier than filling the last gaps in a quota sample.
mention this background because for much of the past 100 years, media
and market researchers have been the business world’s most rugged,
unflagging, and unfailing pioneers. Whether refugees from Germany, kids from the inner city, or emigrants from Asia,
through the decades they have been driven by one goal: the quest for
truth. What happened? What made it happen? What did they see? When? How
did they react? Can we prove it? Can we repeat it? How are opinions
shaped? Where do our preferences come from? Did it make a difference?
is no exaggeration to say that these have been some of the most
important questions asked - and provisionally answered - in public life
during the past seven decades. Phrases that now are part of the fabric
of everyday conversation originated in the classrooms and offices of
researchers: “Personal influence…” “Public opinion…” “Opinion leader…”
“Pollster…” “Survey said…”
It is also no exaggeration to say
that the men and women behind such concepts were among the giants of
American business and public life. Paul Lazarsfeld, Frank Stanton, Herta Herzog, Leo Bogart, Hadley Cantril, Art Nielsen, George Gallup, Elihu Katz
- these were the people who pioneered audience research, invented media
metering, forged modern politics, and shaped news and entertainment
broadcasting. They even helped integrate the U.S. Armed Forces.
Remarkable as it may seem, they walked the earth in our lifetimes.
of these pioneers still do walk this earth. And some of them are in
this room. The technologies may change, but one thing remains constant:
the researcher’s quest for truth.
Today, the opportunity to find
truth in business and public life is greater than it ever has been.
Interactive technologies are allowing us deeper and deeper access to
peoples’ ideas, behaviors, and consumption patterns. We are able to
combine sample-based research and census-based research to create a
richer portrait of peoples’ lives than research scientists ever thought
Entrepreneurs are taking advantage of these new opportunities. The research startups dotting the marketing and media landscape make the Witherspoon and Nassau Streets of Princeton in the 50’s look fallow indeed. comScore, Quantcast, Hitwise, Compete, M:Metrics, Omniture and scores of others have joined venerable firms like Nielsen to alter our understanding of social life.
to interactive technologies, media companies, too, have access to
troves of information about the preferences, desires, and needs of
their viewers, readers, and subscribers. They can deploy this
information to make theirnews, entertainment,
and advertising offerings more engaging and relevant to segments and
sub-segments of their audience than ever before. Time Warner, Disney,
Meredith are joining “newcomers” to the media business like Microsoft,
and contributing to this deeper, richer, and more valuable picture of
the why’s and what’s of consumer behavior.
media and research companies, together with advertising agency and
marketer research departments, are transforming the way the marketing
and media ecosystem operates. Thanks to them, our portrait of society -
a rendering that used to be painted with broad brushes - is now a
Of course, with new technologies and the
opportunities they unleash come new complexities. Last March, the
Interactive Advertising Bureau hosted a Summit Meeting on Audience
Measurement. Executives from comScore
and Nielsen joined representatives from major advertising agencies,
marketers, media companies, and media-marketing-and-advertising trade
associations to chart the journey forward.
It was a
significant gathering, because we all realized that we seek the same
thing: to use the new emerging interactive technologies to bring us
closer and closer to the truth about consumer behaviors.
This conference is a direct result of that gathering. The IAB
agreed then to take on a vital role: To demystify the metrics of
interactive marketing. To help educate the marketplace about what
works, why, when, and under what circumstances. To showcase the
advances in audience research made by research firms, media companies,
ad agencies, and marketing departments. To make this pointillist
painting of human behavior even more refined.
This is a new role for the IAB.
We join venerable groups in the marketing world, like the Advertising
Research Foundation, the American Association of Advertising Agencies,
the Magazine Publishers of America, and the Newspaper Association of
America, in this activity - and happily so. Few matters in business
today can be more important than shedding light on - and reaching
agreement on - how we measure consumer behavior.
The people you will hear from today would make Frank Stanton and Paul Lazarsfeld
proud. These contemporary research pioneers will describe for you the
new ways they are looking at peoples’ media journeys. They will explain
how they are bringing together methodologies to measure activities in
different media. They will give you a sense of what’s coming next.
On behalf of the 450 members of the IAB, I thank all these pioneers for joining with us in advancing the science of audience research. I want to thank the IAB’s
Research Council for helping to plan such a rich and provocative day. I
want to thank all of you for taking time during a busy holiday season
to pursue this quest for truth.
…or Vice Versa, Depending On How Good a Partner You Are (or Aren’t)
Rob Norman — CEO, Brit, renaissance marketeer… and now locutionist. At the IAB’s Agency Summit last week, he loosed on the world a new, and in our world necessary, noun: clompiler.
necessary? Because there’s nary a conversation in the marketing-media
landscape these days that doesn’t touch on the issue of co-opetition
— the increasing tendency in decentralizing industries for competitors
in one arena to become collaborators in another. Yet there doesn’t seem
to be a good term for those that engage in co-opetition. “Co-opetitors”
never did seem to cut it.
Enter Mr. Norman and his
word: “clomplier.” The Chief Executive of Group M Interaction defines
it on his blog thusly: “A company which in its various guises is a
client (cl), competitor (omp), and supplier (lier) to another company.”
For an example, I’d be remiss if I didn’t refer you to Rob’s site.
Mr. Norman describes himself as the only Brit capable of explaining the infield fly rule to his mother. I believe it.
a litigation partner in the Washington office of the Proskauer Rose law
firm and the chair of its Privacy & Data Security Practice Group,
recognizes the irony — and also the extremist nature of the proposal.
Here’s what he wrote in Business Week: “This
would take privacy law to a new level, where protection is given not
only to private data (names, addresses, account numbers, etc.) but also
to anonymous data (e.g., data collected through cookie technology),
which would be legally regulated. The complexity and enforcement
problems with a ‘do not track’ law are enormous. Advocates liken it to
the ‘do not call’ rules that pertain to telemarketers, but only the
names are similar. Compiling and applying a list of those who do not
want tailored advertising will be a technological nightmare.
Compliance, to the extent it can occur at all, will be costly.
Ultimately, consumers will suffer through increased costs passed on to
them, and opportunities for more useful consumer information will be
You have to hand it to the extremist groups. By
co-opting the tenor and feel of the telemarketing “do not call”
concept, they have made a complex, radical idea — one that would
dramatically curtail marketers’ and media’s current ability to engage
in advertising, marketing research, and information and entertainment
delivery — seem simple and benign. Fortunately, the FTC seemed to
recognize this at the Town Hall: Commissioners repeatedly queried the
anti-consumerist advocates, “Where’s the harm?,” and were met not with
current information, but hypotheses about the future.
harm, as Mr. Wolf shows, will be if access to information is shut down.
Prices will rise, and consumer choice will diminish.
I like this piece in The Economist
on Facebook’s audacious new advertising plan — and not just because it
quotes me. Rather, the writer took seriously one of my long “there’s
nothing new under the sun” disquisitions that most of my friends and
colleagues ignore. In this case, it’s that today’s social-networking
and -marketing phenomenon is not at all novel. Rather, it derives from
research done by two of the 20th Century’s leading media theorists:
Paul Lazarsfeld and Elihu Katz.
Lazarsfeld (pictured at right) was a famed emigre sociologist from Germany and Katz his student at Columbia University when they did the work that led to their pioneering 1955 book, Personal Influence.
The book challenged a reigning theory of media influence: that mass
media “work” directly, by injecting ideas into the minds of relatively
isolated people. That notion was — and still is — almost reflexively
accepted by anyone who has worked in or around media, marketing, and
advertising. “Our programs and ads,” we believe, “forge peoples’
opinions.” It is a tenet deeply-held by copywriters and anchormen alike.
Lazarsfeld and Katz showed that this “Magic Bullet Theory”
was inaccurate. An earlier Lazarsfeld study had shown that only some 5
percent of Presidential voters had their opinions shaped directly by
media messages. Together, the two scholars showed that media work more
indirectly, through social influence. They identified a “two-step
flow,” by which media messages reinforced what people heard from others
in one or another of their communities. These social influencers are,
in the Lazarsfeld and Katz formulation, “opinion leaders.”
of the assumptions that still drive modern marketing mavens were
overturned 50 years ago by the two professors. Receiving a message does
not imply responding to it, they showed. Moreover, top-down influence
generally is fairly benign. People belong to numerous communities, and
are influenced in different things by different opinion leaders. But
just try telling that to a high-priced creative with a killer reel. It
seems the world rediscovers personal influence every few years or so —
in the form of “word of mouth marketing,” “brand advocacy,” “guerrilla
marketing,” and “brand zealotry” — only to forget it the next time a
fabulous, award-winning ad campaign or a depressing, mud-slinging
political campaign comes slamming down the airwaves.
The Facebook notion of defining the world’s “social graph”
— “the network of connections and relationships between people on the
service,” in Facebook founder Mark Zuckerberg’s phrase — and deploying
it in the service of marketers is the latest marketing spin around the
half-century-old work of Lazarsfeld and Katz. (That’s Katz at left.)
What’s changed, of course, is that when Lazarsfeld and Katz were
writing, the only scalable communications tools available were mass
media, notably the new phenomenon of television. Today, social
networking sites of enormous reach — larger than television’s, because
they have instantaneous global scope — allow opinion leaders to shape
attitudes in communities far and wide… and near and narrow. That’s
the promise underlying Facebook’s notion to “marry an ad message to a user-initiated endorsement of a product or service,” as Ad Age put it.
Lazarsfeld and Katz bear re-reading, and not just for Silicon Alley
cocktail party one-upsmanship. The importance of personal mediation
means that television, radio, and print communications have always been
filtered in ways their creators could not necessarily predict. The old
saw that “nothing will kill a bad product faster than a great ad” is an
example of this, although few practitioners recognize it. Today, with
the Internet allowing all manner of influencers to wield their opinions
in any way they choose, the relationship between the constructed
campaign and its eventual effects is even more unpredictable.
fact, it will take a supremely clever ad agencies and consumer
marketers with strong stomachs to test themselves against the
backlashes that seem all but inevitable. For if there’s anything that
might unravel your personal social graph, it’ll be too many personal
ads and endorsements tearing through it. The results might look like a
book written by Dale Carnegie’s evil twin: How to Lose Friends and Not Influence People.
day before the always-stimulating Google Zeitgeist conference at the
search-engine giant’s Mountain View campus a few weeks ago, I had the
privilege of participating in a day devoted to advertising agencies and
marketing inventiveness. My role was simple: I was to moderate to panel
on innovation, featuring five pioneering interactive companies, all of
them, in their own ways, direct or indirect competitors. The panelists
were Tim Armstrong of Google, Randy Falco of AOL, Brian McAndrews of
Microsoft, Mike Murphy of Facebook, and Michael Barrett of MySpace.
as we prepared for our two-hour session, I was worried. As much as our
hosts wanted to talk about innovation, there was, I knew, an elephant
in the room: industry consolidation. Microsoft’s acquisition of
aQuantive (of which Mr. McAndrews had been the CEO), Google’s pending
purchase of DoubleClick, the rise of social networking, the
mainstreaming of digital video, to name just a few trends, were
generating apprehension across the marketing-media value chain. The
concern was captured in the now-famous term the WPP Group’s Chief Executive, Sir Martin Sorrell, applied to Google at the Zeitgeist conference just one year before: “frenemy.”
must show a willingness to address consolidation, disintermediation,
reintermediation, ‘frenemization,’ and all manner of these Latinate
concerns,” I suggested to my fellow panelists, “else we’ll be accused
of ducking.” All readily agreed.
the panel. Finished with introductions, I turned to the table of 10
advertising-agency executives — an assembly of the most accomplished
men and women in the business, gathered from creative agencies, media
agencies, diversified services agencies, regional agencies, and global
agencies — and put the matter to them. We will address everything that
interests and concerns you, I said, but what would you rather take up
first: innovation or consolidation?
The immediate reply: “Innovation.”
no matter how many times I tried to bait the agency executives, no
matter how many times I tried to get them to start a “frenemy”
discussion, they just would not rise to it.
must understand,” said one, “that we understand what’s happening to the
landscape, and while there are obvious concerns, we really need to know
more about the opportunities. What we want to know most is how you can
help us build value for our clients.”
“Teach Me” Moment
We are in what I call a “teach-me moment.”Everywhere
I turn, the apprehensions of a year ago are, if not banished,
significantly diminished. In their place, across the value chain, is a
desire to learn, to improve, to acquire new capabilities, and to
collaborate in unfamiliar ways to build customer relationships and new
call this revised view of marketing-media coopetition “Ecosystem 2.0.”
I suspect it will dominate our waking hours for the foreseeable future.
And I know that we at the IAB will be paying close attention to it -
for we intend to make it a centerpiece of our association’s 2008
talked in previous posts about how and why the new complexities and
opportunities of marketing require unfamiliar forms of collaboration
across the value chain. It was clear the message resonated: IAB’s MIXX Conference & Expo, which was themed around the new collaborative landscape, sold out for the first time in its history.
must learn how to respond. “We need you [interactive companies] to come
to us in a different way,” one agency president said at the Google
roundtable I moderated. “Instead of just sending your salespeople to
talk to our media planners, we need you to send your savviest
technology people to talk to our creatives. We need to get your
analytics experts to talk to our account planners.” His fellow agency
agencies, though, need to match wishes with actions. As much as their
leaders profess deep interest in learning more about applying
interactive platforms, applications, brands and opportunities to their
client work, their troops aren’t necessarily following. Many IAB
members say that when they try to set up broader meetings at agencies,
the right people too often do not come to the table. At the media
agencies, in particular, discussions still center predominately on
price, not value.
need to bring senior team leaders into the room. They must strive to
break down the walls that not only have kept publishers, too
frequently, in their traditional place — as “dumb” conduits for the
agencies’ ads - but have kept agency functions siloed from each other.
Cross-functional collaboration must begin at home, else it will never
take root between and among companies.
companies are similarly challenged. For years, “branded publishers”
have maintained a wary distance from “the portals.” They have worried
that these eyeball-aggregators are using their “front door” status as
well as search engines, free email and other services to legally tap
into the publishers’ content to amass audiences and sell advertising
that otherwise would go to the content sites. Now that the portals are
evolving into platforms, the apprehension, in some quarters, is growing.
believe it’s wiser - certainly, it’s more realistic - for publishers
and agencies alike to determine how and where they can play with the
platforms to enhance their own capabilities, and thus their value to
The Platform Environment
Platform, admittedly, is a vague word -“a swirling vortex of confusion,” Netscape founder and Ning chief Marc Andreessen says.
But Mr. Andreessen offers a simple explanation. “A ‘platform,’” he
writes, “is a system that can be programmed and therefore customized by
developers - users - and in that way adapted to countless needs and
niches that the platform’s original developers could not have possibly
contemplated, much less had the time to accommodate.”
one degree or another, the major Internet giants appear to be following
Mr. Andreessen’s definition. Several of them are evolving into platform
companies that are building advertising exchanges — stock-market-like mechanisms that connect advertising buyers and sellers, price available inventory, and clear it in real time —and
integrating them with their growing multi-site advertising networks.
These platforms, in effect, marry a liquidity mechanism to a pool of
inventory, a continuing flow of behavioral data, and analytics and
optimization tools that can automate many of the expensive
people-centric processes that have typified advertising for generations.
platforms represent another threat to content sites - an effort to
aggregate and monetize their audience without them? Sure. But it’s very
telling that the intended transformation of the social networking site Facebook into a platform
has been accompanied by enormous interest by major content developers.
Every day, it seems, heralds a new Facebook application from The New York Times, the Washington Post, Conde Nast,
or another premium publisher. They believe that open platforms can
represent opportunity as much as threat. In a dramatic turnabout, they
a chance to take the aggregator’s audience and enhance the publisher’s
brand, reach, and stickiness.
rather than positioning themselves to “own the world,” as branded
publishers feared during the era of the “portals,” the new platforms
seem to be wanting to develop scalable businesses that can add value to
others’ businesses in the marketing-media value chain.
like Mr. Yang’s definition of platform more than Mr. Andreessen’s, if
only because the latter, focused as it is on systems, seems more of an
engineering construct than a social construct - and because,
ultimately, the value-additive collaboration that Mr. Yang foresees
will require tapping into real human needs, emotions, and
satisfactions. I’d even go Mr. Yang one further: A
platform is a collection of scaled or scalable services that help
players up and down the value chain grow their customers’ businesses,
and their own businesses in turn.
there is reason for publishers and agencies to feel threatened by the
evolution of the platforms, more and more of them seem to be perceiving
them as opportunities, as Mr. Yang would have them do. Mike Walrath,
the founder and CEO of Right Media,
the exchange that was acquired earlier this year by Yahoo, spoke
directly (albeit with background noise on the Flip camera) to the issue
when I queried him specifically on the subject of advertising exchanges
and commoditization at his conference.
Joe Fiveash, Senior Vice President and General Manager of Weather.com
and a member of IAB’s Board of Directors, agreed that the opportunities
presented by the platforms must be explored. While aware of the
pitfalls of commoditization, he, too, saw more to embrace than to fear
in the ad exchanges and the platforms.
players are arising to realize the advantages Mr. Fiveash foresees to
grow the overall marketplace. As Yahoo’s Developer Network Director Matt McAllister blogged
at the Right Media Open, there is “an interesting market of middlemen
that I didn’t know existed. For example, I spoke with a guy from a
company called exeLate that serves as a user behavior data provider between a publisher and an exchange. There were also ad services providers like Text Link Ads and publishers like Jim Mansfield’s PhoneZoo
all discussing the tricky aspects of managing the mixture of inventory,
rates and yield, relationships with ad networks, and the advantages of
point is a simple one: As Ecosystem 2.0 evolves, we’re likely to
benefit from thinking more about symbiosis than about victory. If
you’re looking for an image to carry you through a 2008 that will be at
least as tumultuous as 2007, I’d recommend one from my scuba days: Not
dolphins and sharks, but clownfish and anemones. It looks scary, but
it’s mutually beneficial.
In my last entry, I tried to give
you a straightforward depiction of how privacy policies and practices
are being made available to consumers. Important, but most people will
probably not find that terribly exciting. However, in the last
session, Lorrie Faith Cranor from Carnegie Mellon told us that in her
respondents correctly answered the question, “Does Acme site use
cookies?” That’s good news, but there are folks in the industry who
are concerned that consumers do not understand what cookies are how
they work or why they are used.
Well hold onto your seats because we
now move to the results of a contest, held by the Berkman Center for
Internet & Society at Harvard Law School, using the magic of
YouTube. Consumers were asked to create a video clip to answer the
question, “What is a Cookie?” Five finalists were selected and our own
VP of Public Policy, Mike Zaneis, was asked to be one of the judges to
select the winner. You can watch these insightful, helpful and witty
clips at http://youtube.com/group/cookiecrumble.
…And This is How the Cookie Crumbles
Surprising to some, but not to
others, the videos were relatively accurate, non-inflammatory and
matter-of-fact. None of the contestants professed fear of cookies or
mistook them for spyware. They even went so far to explain the various
mechanisms available to them to manage and express their cookie
preferences, in addition to recognizing the benefits of relevant
messages delivered to them because of this technology.
Simply put, without certain technology, like cookies, websites have no
memory. These technologies were first created to make things like
online shopping carts possible; to make the very idea of ecommerce a
reality. It is not a secret that cookies enable maintenance of website
preferences and personalization. And - shock! (to paraphrase Trevor
Hughes, Executive Director of the Network Advertising Initiative) -
they allow for relevant advertising and marketing, giving consumers the
commercial information they are more likely to want, when they want it,
where they want it. And though it has been alleged, no one at the Town
Hall has been able to demonstrate the harm in receiving a piece of
relevant marketing or advertising in connection with free news,
information, opinion, or, for example, an email service.
To Jeff Chester, Executive Director of the Center for Digital
Democracy, and his point about needing to ensure the diversification
and democratization of content, 12 million Americans are
blogging. Personal publishing is here, it’s subsidized by advertising,
and there is no shame in that. It is possibly worth exploring the level
to which consumers understand this concept, but identifying a need for
education does not justify qualifying online media and marketing as
Welcome to Day 2 of the FTC ehavioral
Advertising Town Hall. The audience has not waned in number or interest
and it promises to be another day of dialogue, debate and, hopefully,
increased appreciation of advertising-subsidized online content and
The first panel focused on
Disclosures to Consumers: the ways they are currently made, how they’re
being improved, and if consumers read, act on or are even aware of
these notices. To be sure, devising the best mechanisms to provide both
the most meaningful consumer experience as well as maintaining consumer
trust is not an easy task. As was noted today by Martin Abrams,
Executive Director at The Center for Information Policy Leadership,
consumers just do not universally have the time to (or maybe even
interest in) learn more about how their browsing behavior is being used
to deliver more targeted, relevant commercial messages.
So we may never reach all of the
people all of the time with this information, no matter how transparent
and verbose. Rather, he says, we need to identify the role of the
privacy notice itself. What these posted policies do is create a sense
of accountability by defining how you can expect organization is going
to behave and provide the mechanism against which an organization’s
practices can be measured by the appropriate regulatory bodies. That’s
very different than forcing consumers to read notices and police the
The good news is that, in addition to voluntarily
developing these important and publicly available policies (note: there
currently is no regulatory scheme that requires companies to post
privacy policies), the trusted online media brands are continuing to
experiment with new ways to give consumers the information and tools
they might want in order to understand and manage their browsing and
advertising preferences. Unlike the CDT-proposed government owned and
operated “Do Not Track List”, this double-layered approach further
supports consumers’ control of their online experiences while
simultaneously supporting their continued access to the news,
information and services they want.
Yesterday AOL announced a new program
designed to give consumers “enhanced notice and information about
behaviorally targeted advertising.” The program involves the delivery
of millions of public service banner ads across the AOL third-party
networks, which reach 91% of the U.S. online audience. AOL joins a
growing list of leading online publishers and portals who continue to
evolve their privacy policies and practices, with the latest and most
noteworthy announcements being made in the last few months.
Google, Microsoft and Yahoo have all
loudly announced a shortening of the period in which they’ll make
anonymous search logs from its users. Google has launched a Privacy
Channel on YouTube to try and reach its users by video, explaining its
policies and practices by the very nature of one of the web’s most
This morning, Scott Shipman, Chief
Privacy Counsel at eBay, demonstrated his company’s experimentation
with creating a link directly from ad content to information about that
ad and how it got there. They’re testing various placements and labels
that would make it easy for a consumer, if they so chose, to find out
more or express their preference about advertising customization. If
it’s not of interest or concern, the consumer can move on with the
reason they went to the eBay site in the first place.
“Our every move is being tabulated, tracked and sold to the highest bidder,” Jeff Chester, the
executive director of a Washington anti-advertising organization called
the Center for Digital Democracy, said ominously at the opening of the
FTC “town hall” on online behavioral targeting.
As I sit through this FTC presentation, I’m reminded that American consumer culture - a backbone of U.S.
economic growth from the beginnings of the nation - has long been
paralleled by a smaller but quite vocal anti-consumerist tradition.
The first tendency is known to all of us, and has long been recognized. Alexis de Tocqueville, writing in the early 19th century, observed that “without exception, travelers to the United States
found the most striking feature of the American character to be the
obsession with business and wealth.” This obsession manifested itself
in the acquisition of goods - “conspicuous consumption,” the sociologist Thorstein Veblen labeled it.
Desire to Acquire
This desire to advance, continually and publicly, has been a driver of U.S.
economic growth. We acquire things because it shows off our personal
growth, our success, our maturity. To acquire, we strive to make more
money. To serve our desire to acquire, businesses innovate. And some of
that innovation aims to make people feel richer than they are. “Among a
democratic population all the intellectual faculties of the workman are
directed to these two objects,” Tocqueville wrote. “He strives to
invent methods that may enable him not only to work better, but more
quickly and more cheaply; or if he cannot succeed in that, to diminish
the intrinsic quality of the thing he makes, without rendering it
wholly unfit for the use for which it is intended. When none but the
wealthy had watches, they were almost all very good ones; few are now
made that are worth much, but everybody has one in his pocket. Thus the
democratic principle not only tends to direct the human mind to the
useful arts, but it induces the artisan to produce with great rapidity
many imperfect commodities, and the consumer to content himself with
that consumerist impulse has made other Americans, a minority, to be
sure, deeply unhappy.. “We are united by what we are being sold,” the
writer Naomi Klein,
author of No Logo and other books critical of consumerism and the
latest darling of the anti-capitalists, has said, “There is no escape.”
She follows an anti-consumerist line that stretches all the way back to
Thomas Jefferson’s agrarian idealism, which stood in stark contrast to the rapacious mercantilism Jefferson perceived in John Adams’s Boston.
some reason, and for several decades, such anti-growth reactionaries
have aimed particular venom at advertising. Advertising is the public
face of a capitalism they revile. Their arguments are, at times, contradictory. Advertising,
in their formulation, is the generator of unnecessary mass wants and
needs. Yet it also segments us in ways that subvert the American
anti-consumerist tendency has been on display here at the FTC hearings
on behavioral targeting — and so have the contradictions. “Online
marketers can eavesdrop on members of social networks,” Mr. Chester
said. Yet he added that online advertising “has profound implications
for the future of democracy, for whether or not we’re going to have a
diverse array of voices.”
Ads Create Diversity
That latter comment was made without irony.Mr.
Chester and other critics seem not to see that the diversity of voices
links inexorably to the availability of online advertising. I noted in
my first Clog posting from the FTC that the promise of online
advertising has contributed to greater communications diversity and
accessibility than ever in our history:12
million Americans blogging; 1.3 million Americans supplementing their
income by selling on eBay; 41 million resumes posted for free on
Monster.com; 500 million free email accounts from Yahoo!, Google, and MSN alone.
While several of the anti-consumer advocates here today expressed admiration for the
European Union’s stricter rules regarding online data use and privacy,
those come at a significant cost they did not acknowledge - until Tacoda founder (and IAB
board member) Dave Morgan noted it. “There’s dramatically less free
content and services available to European consumers,” he said. “It’s
not for lack of technology infrastructure. Rather, it’s they are being
offered on a paid subscription basis.” Thus is the digital divide
larger in Europe than in the U.S. “Online advertising and the capital
investments companies are making to get it is a $20 billion, $30
billion subsidy paying for free content and free services,” Mr. Morgan
of this is meant to imply that there are not serious issues relative to
data retention and use. One FTC panelist, Kathryn C. Montgomery, a
communications professor at the AmericanUniversity,
has done important work helping to assure that advertising to children
adheres to appropriate strictures. Yet even Prof. Montgomery revealed
herself less as an opponent of bad actors, but as an opponent of online
advertising generally. “Digital technologies enable companies to track
every move, online and off, compiling elaborate personal profiles, and
aggregating that data across different media,” she fretted.
But many of the concerns about behavioral targeting lie somewhere between diseconomic
and mythical. Responding to Prof. Montgomery, Dave Morgan said here
today, “I don’t know any companies that are behaviorally targeting ads
at children. That’s the third rail, as we’d say in New York.”
“My Mother” Rules
“I use ‘my mother’ rules,” Mr. Morgan added. “If my mother would be uncomfortable with it, we shouldn‘t do it.”
important, of what concern is it, if the data collected are anonymous
and aggregated and used to create more relevant - and thus more
user-friendly - advertising? Another panelist here, Larry Ponemon,
chairman of a research think tank, unveiled research indicating that
more than half of Americans believe that an online ad that targets
individuals’ preferences or interests improves or greatly improves
their online experience. Fully 86 percent said they would prefer to
accept relevant advertising, rather than pay for content. “There is an
opportunity,” Dr. Ponemon said, “to educate people about internet economics.”
is very true - and it’s moved beyond major opportunity to a must-do for
our industry. We really have to continue to work,” said Ralph Terkowitz,
a general partner at ABS Capital Partners, and a former CEO of the
Washington Post’s electronic publishing subsidiary, “to drive
transparency, to drive education, and to create policies to deal with
those actors who are not interested in transparency, education and ease