Call to legislate internet privacy and Google’s new interest based advertising

After my Advertising and marketing meets Johnny Law post, two interesting things have emerged on internet privacy. Check out the news from the NY times blog and the Google public policy blog (one of my favourite blogs to read).

I’ve copied some of the more pertinent parts of the article below. 

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Call to Legislate Internet Privacy

The debate on Internet privacy has begun in Congress.

Rick Boucher
Phil McCarten/Reuters
Representative Rick Boucher

I had a chance to sit down recently with Representative Rick Boucher, the long-serving Virginia Democrat, who has just replaced Ed Markey, the Democrat from Massachusetts, as the chairman of the House Subcommittee looking after telecommunications, technology and the Internet. Mr. Boucher is widely regarded as one of the most technologically savvy members of Congress……..

But high on his list is a topic that is very much under his discretion: passing a bill to regulate the privacy of Internet users.

“Internet users should be able to know what information is collected about them and have the opportunity to opt out,” he said.

While he hasn’t written the bill yet, Mr. Boucher said that he, working with Representative Cliff Stearns, the Florida Republican who is the ranking minority member on the subcommittee, wants to require Web sites to disclose how they collect and use data, and give users the option to opt out of any data collection. That’s not a big change from what happens now, at least on most big sites.

But in what could be a big change from current practice, Mr. Boucher wants sites to get explicit permission from users — an “opt in” — if they are going to share information with other companies.

“I think that strikes the right balance,” he said. “Web site operators are very concerned that if they have an opt-in regime for the internal marketing of the Web site themselves it would be very disruptive. The default position of most Internet users will be not to check any boxes at all. It is a very different matter if the site takes the information and sells it to gain revenue.”

I spoke to Mr. Boucher on the day that Google announced its new plan to track data about customers for advertising. And I asked him about such behavioral targeting, which presents an ad based on what you did on other sites.

For the rest of it here

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Google’s announcement on interest based advertising


 Check out this article on Google’s new privacy controls here and Google’s take on it via their public policy blog. This is exactly the point I was making in my post about relevancy of advertising v privacy of information:

“In her post to the Official Google Blog this morning, Susan Wojcicki, VP of Product Management, announced that we are making interest-based advertising available in beta for our AdSense partner sites and YouTube. Interest-based advertising uses information about the web pages people visit to make the online ads they see more relevant. Relevant advertising, in turn, has fueled the content, products and services available on the Internet today.

Providing such advertising has proven to be a challenging policy issue for advertisers, publishers, internet companies and regulators over the last decade. On the one hand, well-tailored ads benefit consumers, advertisers, and publishers alike. On the other hand, the industry has long struggled with how to deliver relevant ads while respecting users’ privacy.”

 

I will discuss it in more detail when I get my head around all this information. 

When advertising & marketing meets Johnny Law

Last night I watched American Gangster (again!) featuring Denzel Washington, one of my favourite actors. I’ve seen it before when I was visiting New York in a Times Square movie theatre. Denzel, uses the “johnny law” phrase a few times when talking about paying off “Johnny Law” i.e. paying cops to turn a blind eye to his nefarious activities.

I’ve always been curious about technology and the law. And now more so. Technology is an evolving beast, where the business models are constantly changing and new competitors, trends, viral campaigns emerge overnight. Whilst the law is seen as conservative, slow to adapt, and very traditional. Generalisations yes, but ask any lawyer or laymen and they’ll agree with these perceptions. Evidently, these two are at opposite ends of the spectrum. The law seeks to maintain order and protect society, yet also to enable the creation of new ideas and businesses. The internet is disruptive, fast moving, changing and global in its reach. Law is often seen as jursidictional, often applying to only member states (i.e on country by country basis) unless treaties are ratified by Member states.

On Wednesday morning, I attended an Advertising and Marketing law CLE. What is a CLE? It means “continuing legal education”. For those that are unaware, I’m still a qualified lawyer (amongst other things) and to maintain your status as a lawyer, you need undertake ongoing education. It might involve some lectures, preparing presenting a lecture, or watching some videos.

I wasn’t sure what to expect with this lecture but went with an open mind. I heard the following lectures:

1. New commercial models in advertising and marketing using the internet 
2. Comparative advertising 101
3. Copyright in advertising
4. Children & the law

Topic 1: New commercial models in advertising and marketing using the internet 

They were well presented, but the most useful to me was probably Internet Business models by Peter Leonard. Peter is a partner at Gilbert & Tobin, and counts Google amongst his clients. He described some basics about adwords and how it worked – I knew most of this stuff since I do some work on adwords. However, he had some really interesting points on whitelisting v blacklisting of keywords, something which I was not aware of. 

Blacklisting of keywords

Apparently, some brandnames are “blacklisted” on google, so advertisers can’t use them. For example, “Toyota” can only be used by Toyota. A car reseller, wholesaler, etc… can’t use that term. People are very careful which words they blacklist since it does not enable to aforementioned parties to advertise on google. And google applies this policy on a global basis. So if Toyota actually had a reseller in china under a distribution arrangement, they could not buy that keyword to sell a Toyota car.

Contextual and behavioural advertising

The other relevant thing he discussed was contexutal and behavioural advertising, which is becoming quite a big area in the online marketing world. Advertising has always been about relevancy and recency. Erwin Ephron developed the recency theory which is about showing someone an ad when they are in the mood to purchase. The idea of “top of mind”. It’s not about showing them an ad 3 times to get it to stick, rather at the right time when they want to buy. I believe that is what behavioural advertising and contextual advertising seeks to do as well – tying relevancy and recency together. 

 Behavioural looks at your past behaviour on the internet – which websites you’ve been to, how you use the internet. Contextual advertising is 3rd party advertising based on the content on the website (i.e. your current session on the web).  The whole idea is to serve you more relevant ads. Websites now, may reserve a space on their site for advertising local content to you based on your IP address – you’ve probabaly seen it! Look at an American website, yet its giving you ads for Australian flights or credit cards. Online advertising has gotten smarter. It was really insightful because at ad:tech and even in my work, these are topics which people are talking about. third party advertising, serving of ads, affiliate marketing, etc… On the flip side, there are privacy concerns, because your ISP tracks where you’ve been and keeps all the information about each individiual user. To me, this is also two competing concerns – serving you more relevant ads v capturing your private information.

It enhances the user experience and the advertising by having geographically and behavioural based ads, but aren’t you worried that someone is keeping tabs on you?

Other interesting points he discussed was how keywords get bought, and the difficulty of proving trademark infringement for keywords. Since the prices and the allocation of paid ads on Google was constantly changing, its hard to prove in such a dynamic environment. 

I must admit the other seminars weren’t as relevant to me or as interesting, hence my interest did drop off. Copyright issues in advertising were ok, about database compliation and the rights attached to that. Children and the law & comparative advertising was extremely boring, but still handy to know. I learnt that advertising needs to get clearance from legals, very important so you don’t get sued (!) and meets all legal and regulatory requirements. Also, there’s so many various regulatory codes for each type of media (radio, tv, outdoor) and legislation. 

I’m out like Johnny Law, 

Matthew Ho.

Big Brother is Watching……

The controversy continues as debate rages as to whether we should be targeted with advertising based on the webpages stored in our Internet Service Provider’s history. Major privacy issues abound – do u want someone knowing where you have been and giving you advertising based on that?

We are starting to see more targeted advertising. Notice that website you log on to , that has nothing to do with Australia and all of a sudden there are Australian ads on there? They’ve tracked your ISP, they know where you are surfing the web from. Now, they are checking what websites you go to, building a little profile of you and selectively directing advertising based on your history.

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Watching while you surf
Jun 5th 2008
From The Economist print edition
http://www.economist.com/displaystory.cfm?story_id=11482452
Illustration by Otto Detmer

Online advertising: New ad-targeting systems, which determine users’
interests by monitoring which websites they visit, are proving
controversial

IS IT a worrying invasion of privacy for web surfers, or a lucrative new
business model for online advertising? A new “behavioural” approach to
targeting internet advertisements, being pioneered by companies such as
Phorm <http://www.phorm.com/> , NebuAd <http://www.nebuad.com/>  and
FrontPorch <http://www.frontporch.com/html/index.html> , is said to be
both of these things. The idea is that special software, installed in
the networks of internet-service providers (ISPs), intercepts webpage
requests generated by their subscribers as they roam the net. The pages
in question are delivered in the usual way, but are also scanned for
particular keywords in order to build up a profile of each subscriber’s
interests. These profiles can then be used to target advertisements more
accurately.
Suppose a web user is idly surfing a travel blog one Sunday afternoon.
He visits pages containing words such as “holiday”, “flight” and
“hotel”. The behavioural-targeting software watching him inside the
ISP’s network registers and categorises this apparent interest in
travel. Later, when he logs on to a social-networking site to see what
his friends are up to, advertisements for an airline or hotel chain pop
up alongside the postings and photos. The depressing prospect of having
to return to work the next day prompts him to click on an advertisement
and book a minibreak for the next weekend.
To advertisers, this all sounds great. Behavioural-targeting firms are
doing the rounds in Europe and America offering the prospect of working
out what web surfers are thinking, perhaps even before they know
themselves. If this really works, advertisers will be prepared to pay
more to place ads, since they are more likely to be clicked on. That in
turn means that websites will be able to charge more for their
advertising slots. A small cut also goes to the ISP that originally
gathered the profile information.
The companies involved suggest that internet users will welcome all
this, since more accurate targeting will turn internet advertising from
an annoying distraction into a genuinely helpful service. “This idea
that we don’t provide a service by doing this is as far from the truth
as it’s possible to be,” says Kent Ertugrul, the boss of Phorm. “It
creates a situation where there’s less rubbish bombarding you.”
But not everyone likes the idea. Opponents of behavioural targeting have
kicked up the biggest fuss in Britain, which is where the technology
seems to be making the most progress: the three biggest ISPs (BT, Virgin
Media and TalkTalk), which together account for around 70% of the
market, have all signed up to use Phorm’s technology. Since news of
their plans emerged in February, over 13,000 people have signed an
online petition opposing the system. Legal and networking experts have
argued that it constitutes an unauthorised wiretap, and is therefore
illegal. Richard Clayton, a computer-security expert at Cambridge
University who has taken a close look at Phorm’s systems, did not like
what he saw. Proponents of behavioural targeting, he concluded, “assume
that if only people understood all the technical details they’d be
happy. I have, and I’m still not happy at all.”
Phorm, which is now trying to get American ISPs to adopt its technology
too, emphasises that consumers will be given the option to opt out of
the system if they do not wish to use it. It points out that information
about individuals’ surfing habits remains within the custody of the ISP
(which already has access to such information anyway), and that user
profiles merely associate keywords with an anonymous serial number,
rather than a name. Its profiling system ignores sensitive pages, such
as those from online-banking sites, and will not be used to target
advertising for pornographic sites.
Critics worry, however, that behavioural targeting fundamentally
undermines the trusting relationship between ISPs and their subscribers,
by allowing a third party to monitor what millions of people are doing.
They also worry about Phorm’s previous behaviour. Until last year it was
known as 121Media, and it gathered information about internet users’
interests by getting them to download “adware”, which was included in
bundles with other pieces of software. This software then monitored
users’ surfing habits and used the resulting data to target “pop up”
advertisements of the kind that once blighted the web.
All this was legal, but it won 121Media few friends among PC users, who
found its software difficult to remove from their machines. The
revelation that the company, since renamed Phorm, conducted a secret
trial of its new technology with BT in 2006 and 2007, monitoring
thousands of customers without telling them, has not helped its image.
As the controversy swirls, Google, the 800-pound gorilla of the
internet-advertising industry, is quietly watching. ISPs around the
world have looked on jealously as Google has grown rich on their
subscribers’ web-browsing, while the ISPs have been reduced to “dumb
pipes”, ferrying internet traffic for subscribers but unable to win a
share of their online spending.
Phorm and its ilk promise to change that, by offering ISPs a chance to
get their hands on a slice of the fast-growing online-advertising pie.
Behavioural-targeting firms also like to portray themselves as feisty
underdogs taking on mighty Google, which is itself the cause of concern
about online privacy. Phorm points out that its system does not retain
detailed information about web usage as it builds its user profiles-in
contrast to Google, which keeps records of users’ search queries for up
to two years. (The European Commission recently called upon Google to
delete such information after six months.) “If people knew what was
stored right now, they’d be shocked,” says Phorm’s Mr Ertugrul. His
company’s system, he says, is “the model for privacy online”.
Even so, most web users are happy to strike an implicit deal with
Google: it provides an excellent free search engine in return for the
ability to display relevant advertisements. The quid pro quo with
behavioural targeting, says Mr Ertugrul, is that ISPs will start making
money from online advertising, which they can then spend on upgrading
their networks, without raising prices for subscribers. “This is a way
of funding the internet,” he says.
Behavioural targeting is not necessarily a bad idea, but imposing it
without telling people is likely to annoy them when they find out about
it. Without adequate disclosure, an “opt out” system looks like
snooping; but an “opt in” system, given all the fuss, now looks like a
tough sell.