December 2010 Archives
The Chairman of the Federal Trade Commission has finally come clean. After all the pushing and pulling about consumer privacy, he has spilled the beans on what really irks him about the Internet: He doesn’t like cookies. Recently, on C-SPAN’s The Communicators, FTC Chair Jon Leibowitz, in dismissing our argument that the Commission’s push for browser controls over data would involve the “re-architecting” of the World Wide Web, described the IAB as a “lobbying organization for companies that like to put third-party cookies in consumers’ computers, so they’re doing what they do.”
Then last week, Chairman Leibowitz indicated he had inside knowledge about the inner workings of the interactive industry. “There is a schism brewing within the Internet advertising community and perhaps even within the IAB” on the subject of third parties, he told The Huffington Post.
Actually, the FTC Chair doesn’t know the half of it. The IAB is indeed a lobbying organization—not just for companies that place third party cookies on peoples’ computers, but for every major first-party publisher on the Internet as well—from the A&E Television Network to Zillow.com, with several hundred in-between. And I assure you, there is no schism within the IAB when it comes to cookies and their crucial role in the architecture of the Internet. Just to make sure, we asked them. Here is what a cross-section of IAB members told us cookies allow them to do for their advertisers and their consumers:
“First and foremost, cookies allow Univision dot com to capture and analyze information on our users interests thus guiding our content creation and web site navigation so our users find the information and content they seek and enjoy.”
- Jim L’Heureux, Univision.com
- Chuck Gafvert, AOL
“Third-party cookies allow me to employ four people and I’m hiring 10 more. How many businesses are you aware of in this economy doing that? They also allow me to deliver highly targeted solutions, in the form of quality products and service providers, to the 55,000 consumers that visit my AsktheBuilder.com site each day.”
- Tim Carter, AskTheBuilder.com
“Cookies allow us to ensure that consumers receive relevant and customized ads without the use of personally identifiable information.”
- Chris Pirrone, Traffic Marketplace Display
“If it were not for cookies, our registered users would have to enter their log-in and password every time they come to our websites and try to access valued content. Imagine having to do so several times a day after reading your favorite newsletters and trying to access some research, white papers, profile settings and more.”
- Carine Roman, ZiffDavisEnterprise.com
“Using HTTP cookies, we can calculate: Total audience size, audience turnover, user frequency histogram over a period of time, user lifetime histogram, day-to-day audience overlap and site-to-site audience overlap”
- Michael Griffiths, SpotXchange.com
“Cookies are an important core Internet browser technology, comparable to your barber recognizing you each time you visit, that enables sites like ours to efficiently deliver a growing suite of services based on the ability to know and remember our users between visits.”
- Bill Irvine, TheAboveNetwork.com
“Cookies enable us to keep content and advertising relevant to consumers both in terms of content and timing, and they ensure the delivery of this content and advertising without compromising anyone’s privacy. Unlike traditional media, interactive media need not know a consumer’s name, address, or credit card information to deliver the right content at the right time. That’s what cookies enable.”
- Jay Habegger, OwnerIQ.com
“Cookies enable my website to provide timely and useful information to expectant moms during pregnancy and beyond.”
- Neil Street, BabyNamesGarden.com
“Media6Degrees delivers offerings for advertisers to the people who will respond best to them. To do this we purchase media from publishers across the Internet in a manner which would be impossible without using 3rd-party cookies to identify the audiences that our advertisers are interested in addressing. In addition, we rely on 3rd-party cookies to control the flow of advertisements which provides a better user experience by limiting the number of times an individual sees a particular advertisement.”
- Alec Greenberg, Media6Degrees.com
“Cookies allow me to reach the users who like to play games and connect them to my game site and applications. I am disabled, and thanks to the internet and cookies I am able to support myself and my family and stay off of Social Security and welfare.”
- Katherine Girod, iGames4Fun.net
“Cookies allow me to provide a better experience to my visitors by storing their preferences and using them as they navigate through my website. This helps them to avoid constant inconveniences of providing their preferences on every page.”
- Amol Vyavhare, ArticlesWave.com
“Cookies help me operate the world’s best website on defense and security issues.”
- John Pike, GlobalSecurity.org
- Andy Robinowitz, SocialKnowledge.net
“Cookies help me get my products in front of the customers who actually want to buy our products, thereby assuring our business continues to grow and provide employment opportunities to the community.”
- Richard Sexton, CarolinaRustica.com
“Since my site is geographically specific, local advertisers can have their messages appear on the site where the largest potential customer base exists. Without the cookies used in serving banner ads, this process would go away, and possibly prevent those messages from reaching the target audience. The cookies make what is delivered to online reader relevant.
- Perry Klaussen, Hoboken411.com
“Cookies allow me to create a better user experience for my website, making it easier for my readers to access information quickly and efficiently, plus be a bigger part of the community.”
- Jon Berlinghoff, EventHubs.com
“Cookies allow us tailor information that helps them use our site much more efficiently.”
- Greg Brown, VideoPoker.com
“Cookies enable my community to exist as a free and streamlined platform for individuals to discuss prescription drugs with one another.”
- Nick Jabbour, PrescriptionDrug-Info.com
“Cookies allow me to deliver advertising in an effective manner and that allows me to make a living and provide a valuable service to my readers at no charge.”
- Ron Lemon, RealityTVCalendar.com
“Cookies allowed me to build the best place online for people to find more information about parenting and how to get your child into acting without being taken advantage of.”
- Steve Shurak, ParentMediaInc.com
- Kyle McCarthy, FamilyTravelForum.com
“I prefer patronizing a store that knows me and recommends something they know I’ll like versus an impersonal store that recommends whatever they’ve got on the shelf. Happily, cookies allow that same familiarity and make the web a friendlier and more relevant place to shop.”
- John Knapp, BrashInsight.com
“Cookies let my customers access their private data securely without having to log in again every time.”
- John Manoogian, 140proof.com
- Jason E. Renda, OutdoorInformer.com
We are not refuting, contradicting or picking at the FTC’s concern for consumer privacy on the ad-supported Internet. Indeed, we are as passionate about it as the Federal Government and the so-called “privacy advocacy groups.” We support vigorous FTC enforcement of privacy regulations and the pursuit of violators, and we appreciate the FTC’s continuing support for industry self-regulation as the most effective means for assuring that consumer privacy rights and expectations are honored.
Here’s where we part ways: The IAB believes with equal passion that the ability to advertise legal products and services is central to the functioning of a capitalist economy, and an essential support structure for the news media that underpin American democracy. And we find abject attacks on whole categories of technology a form of technological McCarthyism that has little place in a sophisticated debate about how best to protect consumers and companies together.
We welcome the opportunity to bring technology experts from IAB member companies to the Commission to discuss it with them, rather than politic it on cable TV.
Randall Rothenberg is President & CEO of the IAB
For the record, interactive media are growing and transforming the way people communicate with brands, with content and with each other. What interactive media do not need is badly executed and poorly reported research. The media themselves already resonate with consumers and the marketing ecosystem.
What specific piece of poorly executed research prompted this? On December 13, Forrester released its North American Technographics Report to great fanfare. Much was made of a finding that simply does not synch up with everything we know using other data sources. According to Forrester, consumers reported that they spent 13 hours a week watching TV and 13 hours a week using the internet in January and February of 2010. Fanfare surrounding the purported parity was nearly matched by the furor over the fact that all other data sources show nothing of the kind. For the same time period, comScore reported that people spend 7 hours and 24 minutes a week using the internet.
The IAB does not need to shill for TV so the fact that Nielsen reports that TV viewing levels are in excess of 30 hours per week is not the point. The point is that we, the IAB and the overwhelming majority of members, stand for transparency and consistency in measurement. We sincerely believe that good measurement must be the barometer against which all media are evaluated.
Putting out numbers that confuse the already confused marketplace—numbers that are based on a methodology that every expert would say is inferior for the purposes of measuring media usage—serves no one. Self-reported usage data rely on consumers’ memories and on their desire to disclose what they do with media. Everyone knows that most people are using the internet at work and spending significant time doing so. We all know that being a “couch potato” is not perceived to be as cool as using new media. We know that people watch TV content on digital media. And, we know that most people are not sitting around making many of the distinctions about media that the professionals do. So why would we expect that people can accurately report their media usage using our artificial business distinctions?
A really thorough review of the Forrester study would also require thinking about the sample. Is it representative of broad population groups? Can the findings be generalized beyond the sample? These complexities are beyond the scope of today’s blog.
Planning and buying media for the purposes of marketing to consumers relies on what people do, not on what they say. To those who continue to confuse the marketplace, we say please consider the disservice you do to all of us. To those who accept counterintuitive information, we say caveat emptor.
Sherrill Mane is Senior Vice President for Industry Services at the IAB.
On December 7 in San Francisco, Quova sponsored the IAB’s last Innovator’s Round Table Dinner (IRD) of 2010, and I had the honor of being their host. The event was held at the popular Peruvian eatery La Mar, on Pier 1 (the food was fabulous, and if you go, be sure to order a ‘Pisco Sour’ from the bar). Having been sponsored by an industry leader in online geo location the conversation—not surprisingly—centered on the following topics related to location-based advertising:
- The benefit of geo-location to advertisers and marketers
- The opportunities and risks created by the joining of online and offline data
- The responsibility and challenges of protecting consumer’s privacy.
I had the pleasure of sitting with a table of overachievers that included LaurieAnne Lassek and Walter Beisheim of Quova, Michael McGuire and Alicia Gubba of Gartner, Jack Androvich of AutoDesk and Chase Norlin of Alphabird. I am still kicking myself for not asking the origin of the name “Alphabird” (perhaps it is the bird that incited the violence depicted by Alfred Hitchcock?).
Our spirited conversation brought interesting points. The benefit of location awareness to advertisers was summed up in the term “relevance.” Relevance is a nuanced term in the digital advertising industry. However, if you think of all the information we can know about a consumer and their interests before delivering an ad, it’s all potentially useless if our offers are poorly targeted with regard to a consumer’s location. For instance, my interest in Peruvian food and music is generally irrelevant, EXCEPT when I am visiting San Francisco. Then it becomes highly relevant—to La Mar.
The joining of offline and online data remains a touchy subject. While we did not delve deeply into why, we did acknowledge that regulation is coming in this area, and there are challenges. One of those challenges is how to use merged data to effectively market to consumers, without making them feel as if they were being ‘stalked’ in the real world based on their online activity. Companies that control offline consumer data manage a terrifying amount of personal information. If offline personal information is merged with online profiles, and that merger results in highly targeted online offers, there may be a risk of alarming, rather than enticing consumers—thus breaking the trust relationship between consumer and brand. When consumers lose the ability to exercise control over their personal information, the issue becomes very sensitive. Our industry would be wise to offer consumers meaningful choice to enhance trust, not break it. This of course, led us naturally to the last topic.
We fear what we do not understand. The Federal Trade Commission is reminding us of this every day. If we do not want to risk driving the consumer away, then our industry must take steps to earn their trust. Trust is built through educating and offering meaningful choice to consumers. As such, the self-regulatory work we are engaged in (see http://www.aboutads.info) will need to evolve to include targeting based on location awareness.
This was the third IRD I have attended, and the first I have hosted. These are special events—always intimate, personal and full of stimulating conversation. Thanks to Quova for sponsoring, and thank you to all those who attended and participated.
Steve Sullivan is VP Digital Supply Chain Solutions for the IAB
In case you missed it, Steve Sullivan, IAB’s VP of Digital Supply Chain Solutions, appeared on NPR’s All Things Considered last night to discuss Microsoft’s new Do-Not-Track option in Internet Explorer 9. You can hear the segment at http://www.npr.org/blogs/alltechconsidered/2010/12/09/131914019/microsoft-ads-do-not-track-option-to-internet-explorer-9.
Check out more coverage of the IAB’s response to Do-Not-Track and the recent FTC Staff Report on Protecting Consumer Privacy.
About twenty people braved some wildly rainy Atlanta weather on November 30 for a fantastic meal at Bacchanalia, and a fascinating conversation about the intersection between customization and privacy, at the latest IAB Innovators Roundtable Dinner (IRD).
Sponsored by Quova, this IRD focused the dinner discussion on geotargeting, and how location and other consumer data lead to better advertising campaigns and happier customers—assuming they’re done correctly. Attendees included folks from 22 Squared, BBDO, Nurun, DS Waters, Home Depot, ING, Coke, and of course Quova and the IAB.
I found it very interesting how broadly attendees perceive the advantages to marketers of geolocation in online advertising. One discussion focused on geo-targeting’s benefits in terms of engagement and prospecting. Another centered primarily on the strategic value of this kind of capability, in terms of assessing competitiveness and growth. And the third conversation focused mainly on the benefits from delivering more relevant messages to consumers.
Home Depot discussed a simple but effective way that they’ve used geotargeting: in their “Spring Black Friday” campaign, they used location data to determine whether to feature, say, a plant versus a snow shovel in the display ads they ran. That gets at another point that I think is sometimes overlooked when discussing location-based targeting, particularly in mobile: often I feel like it’s presented as an all-or nothing thing, like you either target based on someone’s exact latitude and longitude, or you don’t use it at all. However, far less granular location data, to a ZIP code, a city or even sometimes a state or region can also unlock value for an advertiser and relevance for a consumer.
I heard mixed things on the topic of consumer privacy—one perspective at dinner held that privacy concerns are very much a factor of the older segment of the audience; younger consumers generally embrace the relevance that targeting can deliver, and so the whole question of privacy will diminish over time. On the other hand, another view holds that eventually there will be some kind of opt-in requirement (this was the week that the FTC issued its new recommendation on targeting), since privacy regulation may be the only thing a divided Congress might actually accomplish.
One perceptive comment was that customers don’t know what marketers know or don’t know, and so the industry needs to help them understand that. Of course, that’s something the IAB is working on.
If I had to summarize all the conversations, the consensus advice coming out of this dinner is that geotargeting can be large win-win for marketers and consumers, but it has to be done respectfully and with the right tone. Marketers and agencies need to beware of using targeting simply because they can, and focus on opportunities where it really improves the message. And targeting that hits a consumer over the head with “I know you’re in DOWNTOWN ATLANTA GEORGIA!” is not going to be as welcome, or as effective, as targeting that uses that same piece of data more subtly, to enhance the value of the message.
Joe Laszlo is Director of Research for the IAB