Adweek : Technology

Surprise Winner in Portal Alliance: Right Media

Tim Peterson — Fri, 24 Feb 2012 22:45:52 +0000

When Yahoo, Microsoft and AOL announced in November that they would begin formally sharing nonpremium inventory, many in the industry speculated whether Yahoo’s Right Media Exchange (RMX) or Microsoft-backed AppNexus would emerge the partnership’s go-to ad exchange. We may have a winner, and it's not the platform most insiders expected.

While Yahoo and Microsoft have stood behind their respective exchanges since the announcement, AOL waited until earlier this month to say it will make its non-reserved display inventory available on RMX. That decision has served as a tiebreaker of sorts. Industry experts said that even though RMX’s technology is subpar, its hoard of Yahoo nonpremium inventory ends up trumping AppNexus’s real-time bidding technology.

One trading desk executive who initially considered the partnership a victory for AppNexus said that Yahoo was likely able to use its inventory—which is larger than MSN’s or AOL’s—as leverage to anchor the partnership, at least in part, around RMX.

But the problem facing RMX is that its value is so closely tied with the Yahoo inventory. “The question that Yahoo will face is, 'Are they able to take that platform in Right Media and extend that beyond the Yahoo inventory...and then take that to additional publishers to bring them to their platform?'” said Rajeev Goel, CEO of supply-side platform PubMatic.

Another challenge? AOL is not necessarily all in. Frank Addante, founder and CEO of supply-side platform The Rubicon Project, said the fact that AOL’s inventory is not exclusive to RMX undercuts the strategic value of the two companies’ agreement.

Addante also questioned the value of the partnership between the three portals , and he’s not alone in saying that the partnership announcement only formalized an existing relationship -- a relationship where Yahoo, AOL and Microsoft regularly purchased inventory from one another. Zach Coelius, CEO of demand-side platform Triggit, added that Google has been buying inventory from RMX “for the last couple of years” without a formal deal.

Sources familiar with the matter said that political rifts also likely played a role in AOL’s decision to make its inventory available on RMX. Two sources said that AOL doesn’t trust AppNexus when it comes to protecting pricing. But there's another reason AOL and Yahoo seem more cooperative.

There is longstanding friction between Yahoo and AppNexus related to AppNexus CEO Brian O’Kelley, per sources. O’Kelley had served as RMX’s chief technology officer until Yahoo acquired the company. O’Kelley of course went on to cofound AppNexus. However another source downplayed that theory, noting that a number of the Yahoo employees with negative feelings toward O’Kelley and AppNexus are no longer with the company.

Yahoo declined to comment, and AppNexus did not respond to an emailed request.

Ad Biz Lauded for Privacy Self-Regulation as Debate Continues

Katy Bachman — Fri, 24 Feb 2012 18:37:28 +0000

The digital ad industry is feeling pretty good about the White House's proposed "consumer privacy bill of rights." Along with the unveiling of the long-awaited Commerce Department report came accolades for the four years of work the industry invested into self-regulation under the Digital Advertising Alliance.

The DAA's program — which is now serving up 900 billion in-ad privacy icons that direct viewers to a page where they can opt-out of behaviorally targeted ads — will be expanded to include a Do Not Track browser header later this year.

However, this new era of co-regulation may turn out to be more than the industry has bargained for.

While the ad industry gets a seat at the table in crafting a voluntary code of conduct, the government still retains oversight. Companies that commit to the guidelines have to comply, or the Federal Trade Commission can take enforcement actions.

Jon Leibowitz, chairman of the Federal Trade Commission, had the most positive things to say about the industry's self-regulation efforts, but sent a clear signal his agency would be watching to make sure that companies that have adopted the code stick to it.

"If they don't enforce it, we will," he said.

"This top-down model will require a lot of companies to get the blessing from Washington before they innovate and offer new services," said Adam Thierer, a senior research fellow with the Mercatus Center at George Mason University. "It's voluntary, but with a lot of government nudging and looking over the shoulder. That's costly, both directly and directly. At the end of the day, there's no free lunch. Something has to give."

Right now, the ad community isn't concerned that co-regulation will upend the behavioral advertising apple cart because there is a clearer direction of what the government expects in consumer privacy.

"Things have been fuzzy and that's kept advertisers on the sidelines," said Chris Babel, CEO of Truste, a privacy management firm. "Now they know what's OK and what's not."

What will be OK depends on what stakeholders, government regulators, the advertising industry, and consumer and privacy groups agree to when drafting a voluntary code.

"If it's very restrictive, it will slow down venture capital inflow into the business and that will slow down innovation and job growth," said John Montgomery, COO of GroupM Interaction, adding that he finds it encouraging that the government has acknowledged the industry's self-regulation and is treading lightly.

Though regulators didn't emphasize trying to get new privacy laws passed — probably because it's an election year and the chances of privacy legislation getting through Congress is small — it still remains a goal of the administration.

"We will be working with Congress to implement [privacy rules] through legislation," said Commerce Secretary John Bryson.

Some in Congress are already skeptical about the efficacy of letting the business police itself.

"It's terrific that the advertising industry plans voluntarily to strictly and honestly comply with Americans' wishes not to be tracked. But voluntary compliance does not replace the need for a new law," Sen. John Kerry (D-Mass.) said in a statement. Kerry used the opportunity to push the bill that he co-sponsored with Sen. John McCain (R-Ariz.) that codifies the White House's paper.

On the House side, Reps. Ed Markey (D-Mass.) and Joe Barton (R-Texas), co-chairs of the Congressional Privacy Caucus, also don't want to leave privacy to self-regulation. "Voluntary, self-regulatory efforts are not a substitute for laws that keep consumers' information safe from prying eyes," Markey said.

The ad community is optimistic it can keep new privacy laws at bay. "There are 5,000 companies that are part of the DAA pointed in the same direction," said Montgomery. "We're motivated to take it to the next step."

Google Hires D.C. Insider for Lobbying Team

Katy Bachman — Thu, 23 Feb 2012 20:23:42 +0000

Just as Google is coming under fire in Washington for its privacy practices, the company confirmed today that it's adding a high-profile Washington insider to its lobbying team: former New York Congresswoman Susan Molinari. Next month, Molinari will join Google as vp of public policy and government relations for the Americas, managing the company's policy advocacy and government outreach in North and South America. She will report to Rachel Whetstone, senior vp of communications and policy.

Molinari served three terms in the House from 1990 to 1997 as a Republican. She was most recently head of Susan Molinari Strategies, a lobbying group she formed in 2010. Her resume also includes a stint as co-anchor of CBS News Saturday Morning.

California Requires Mobile Apps to Tighten Privacy Rules

Katy Bachman — Thu, 23 Feb 2012 15:11:06 +0000

Rather than wait for Congress or federal regulators to act on mobile app privacy, the state of California Wednesday announced a deal with six major mobile app platforms to bring privacy practices in line with California law regarding the collection of personal information.

The six companies—Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research in Motion—agreed to give consumers the opportunity to review the privacy policy for an app before it begins to download. As part of the commitment, the companies must also educate app developers about their obligations regarding consumer privacy and disclose to consumers what private information is collected, how it is used and with whom it is shared.

"Your personal privacy should not be the cost of using mobile apps, but all too often it is," said California Attorney General Kamala Harris in a statement.

Harris cited a study that estimated the majority of mobile apps currently available "do not include even the most basic privacy protection." Another study cited by Harris found that only 5 percent of all mobile apps have a privacy policy.

In six months, the attorney general will review the companies' compliance with the agreement.

Concerns in Washington over mobile app consumer privacy have been mounting since the recent discovery that the social networking app Path and other Apple utilities were downloading consumers' address books without permission.

Moving to self regulate, the Mobile Marketing Association three weeks ago released its final privacy framework for mobile apps addressing incidents like the address book flap. The guidelines call for app developers to fix and update their privacy policies, present them in plain language and comply with the MMA's standards of notice, transparency and choice.

Regulators and Business to Work on Privacy Bill of Rights

Katy Bachman — Thu, 23 Feb 2012 05:01:02 +0000

The Obama administration's long wait for a "consumer privacy bill of rights" is finally over, and it can't wait to get moving.

"We need strong online protections for consumers," Secretary of Commerce John Bryson said. He spoke during a press conference with reporters Wednesday evening in advance of a White House event on Thursday. "Businesses need principles. We need this now; we cannot wait."

The Commerce Department is releasing the first of two anticipated reports from the federal government on consumer privacy on the Internet. The Federal Trade Commission, which released its draft over a year ago, is expected to release a final privacy document in the next two weeks.

The administration lays out a public-private approach for the development of a voluntary privacy code of conduct enforced by the Federal Trade Commission. It recommends the adoption of seven privacy protections that consumers should expect, such as individual control over personal data, what is collected and how it is used.

The government doesn't expect to go it alone. The Commerce Department is planning to work with Internet companies, data collection companies, ad networks, privacy advocates and consumer groups.

As if to underscore the importance of private industry's role in developing and adopting privacy policies, regulators shared the podium with the Digital Advertising Alliance, a coalition of ad industry organizations. The DAA announced it was expanding its self-regulation program for behaviorally targeted advertising to include a "do not track" header on browsers that would be honored by its members, which represent 90 percent of the ad business community.

"The DAA is stepping up to our challenge," said Jon Leibowitz, the chairman of the Federal Trade Commission, which proposed a "do not track" option in its draft report over a year ago. "This is a significant step forward."

The DAA members already serve an in-ad privacy icon to give consumers the opportunity to opt out of ads and have already been talking with the browser companies about adopting a consistent approach to the proposed "do not track" header. "We hope to have it uniform within nine months," said the DAA's Stu Ingis, a partner with the law firm Venable.

Getting online privacy guidelines adopted hasn't been easy. Nearly a dozen bills have been circulating around Congress, but none of them have advanced and few expect any to get passed in an election year. So the federal government's approach to involve industry members seems like a practical approach.

"We've been waiting so long for privacy legislation, but that's not likely to happen this year. So the [FTC and Commerce] might as well release papers and begin implementing something on a regulatory and industry self-regulatory basis," said Amy Mushahwar, a privacy attorney with Reed Smith.

No one believes this is the end of privacy rule making.

"We think businesses will step up, but it doesn't solve the entire problem. The blueprint will give us a way to engage with Congress to develop legislative protections. We called on Congress last year; we expect to deepen that engagement," said Daniel Weitzner, the White House's deputy chief technology officer.

Privacy Group Petitions FTC Over Google's New Privacy Policy

Katy Bachman — Wed, 22 Feb 2012 16:10:00 +0000

Pressure is mounting on the Federal Trade Commission to investigate the changes to Google's privacy policies slated for March 1. Adding to the stack of letters from lawmakers and privacy advocates, the Center for Digital Democracy, a consumer privacy organizations, petitioned the FTC Wednesday to review Google's policy changes, charging that Google did not come clean with consumers as to why they are being made.

Google announced last month it was consolidating some 60 privacy policies across its products and services into one main privacy policy, allowing it to track users across all its platforms. In explaining the change, Google said it would result in a "simpler, more intuitive" experience for consumers.

But the CDD argues in its petition that Google is talking out of both sides of its mouth, saying one thing to advertisers and the business community, and another to the consumers who must make decisions about protecting their own privacy.

"An analysis of Google's business operations over the last year will demonstrate the true rationale for the changes to its privacy policy, which has nothing to do with making it 'easier' or 'more convenient' for users," the CDD complaint said. "In particular, Google fails to inform its users that the new privacy regime is based on its own business imperatives....Google should have explained to consumers what it told a private industry meeting, that to help fulfill its February 2011 prediction that display advertising will be a $200-billion-dollar global industry, it would need to better integrate user data across platforms and application using digital ad marketing automation."

After Google announced the planned changes in January, the FTC got an earful from lawmakers, privacy advocates and was even named in a lawsuit from the Electronic Privacy Information Center, which is asking the court to compel the FTC to investigate whether or not Google's planned changes violate its privacy consent decree with the FTC.

"We hope this notches up pressure on the FTC to force Google to back down," said Jeffrey Chester, executive director of the CDD. "I think this complaint will provide insight into Google's actual business practices so the FTC can act in the Google case. All along I've said, what Google needs to tell their consumers is what they tell each other and to publications like Adweek."

Data Points: Big Screen

Wed, 22 Feb 2012 02:22:02 +0000

Infographic: Carlos Monteiro

What Google's Privacy Snafu Means for Self-Regulation

Katy Bachman — Tue, 21 Feb 2012 20:55:20 +0000

Will Google's latest privacy misstep compromise the ad industry's self-regulation efforts? The discovery that Google and a handful of other companies were circumventing the privacy settings on Apple's Safari browser and had to recant has already brought back the privacy debate in Washington with a vengeance.

Following the reports, more lawmakers raised questions and many called for the Federal Trade Commission to intervene.

But the controversy also could have repercussions for the integrity of the ad industry that has been working hard to convince Washington that it could self-regulate privacy policies. Just last week, days before the Google-Safari contretemps, the Network Advertising Association, of which Google is the largest ad network member, issued its annual audit confirming its members were in compliance with the organization's privacy code and guidelines.

The whole incident with Google leaves the Network Advertising Initiative, a member of the Digital Advertising Alliance that is rolling out a self-regulatory program across the industry, in an awkward spot.

In a statement emailed to Adweek, Marc Groman, the executive director of NAI, reiterated the organization's commitment to enforcing its privacy guidelines.

"The NAI has an established process to review alleged violations of the NAI code and NAI policies," said Groman. "In accordance with these procedures, NAI compliance staff is reviewing the allegations contained in last week's articles with respect to all NAI members identified in the articles."

What's so disappointing to the ad industry is that Google may have torpedoed some of the goodwill it has built up at the Federal Trade Commission, which at the end of the year had encouraging words for the industry's self-regulation program.

The ad industry is serving up about 900 billion in-ad privacy icons per month, per the Digital Advertising Alliance, progress that is getting overshadowed by self-inflicted wounds that scare consumers and incite regulators and lawmakers.

"As an industry, we're taking steps forward and taking steps backward at the same time, and that's not doing anybody any good," said Chris Babel, CEO of Truste, a privacy management firm. "The FTC will push harder for faster progress. Issues are building, not diminishing."

Demonstrating that the ad industry can regulate itself will be key.

"This puts added pressure on us to make sure we have an enforceable program," said Mike Zaneis, svp and general counsel of the Interactive Advertising Bureau.

Girls' Education Campaign Runs Street Ad Only Women Can See

David Gianatasio — David Gianatasio

The transformation of bus stops into advertising laboratories continues this week in London, where an Oxford Street shelter will be fitted with facial-recognition technology that allows women to view a 40-second Plan UK "Because I Am a Girl" ad, while men will see only a URL. A client rep explains: "We're not giving men the choice to see the full ad so they get a glimpse of what it's like to have basic choices taken away." Wags might suggest that many guys wouldn't want to see the ad anyway unless it had hot chicks in it. I'd never stoop so low. Seriously, Plan UK has an intriguing strategy, although it's been somewhat lost in media coverage focusing mainly on the system that can tell the genders apart and serve ads accordingly. Most stories compare that aspect to the individually targeted ads portrayed in films like Minority Report—read: "futuristic" and "scary"—with critics decrying the "creepy" and potentially invasive nature of such systems. (Plan UK says the facial data will not be stored.) Per the BBC, the software is correct about gender roughly 90 percent of the time. Perhaps it can be fooled by wigs, masks and makeup. It'd be a hoot if men dressed in drag just to trick the system. At the very least, it would enliven the daily commute.

Brands Pinning It on Pinterest

Ki Mae Heussner — Ki Mae Heussner

Pinterest, the scrapbooking site that’s suddenly on everyone’s lips, is like a gift from the social media gods for style-conscious retailers.

“I think for any company that has an e-commerce presence, they absolutely have to be paying attention to Pinterest,” said Rachel Tipograph, social media director at The Gap.

In addition to the clothing chain, retailers such as West Elm and Nordstrom have watched the beautiful-looking, easy-to-use Pinterest—which enables users to grab and save images from across the Web—become a growing source of online referrals. In January, Pinterest drove more referral traffic than Google+, LinkedIn and YouTube combined, per Shareaholic. This month, per comScore, Pinterest hit 11.7 million unique visitors in the U.S., most of them women.

After noting an uptick in Pinterest users pinning its outfits last fall, The Gap began creating themed pinboards of its own, including “Denim Icons” and “Everybody in Gap,” Tipograph said.

While e-commerce brands may see more tangible benefits, Pinterest can be a powerful tool for any brand since marketing materials constitute its content, said John Donahue, director of business strategy at the social media agency Socialistic. “Your experts, your visionaries, your creatives now have this platform to syndicate content that is interesting to them, to help brands [tell their story],” he said.

For example, after brands and their agencies stage photo shoots for marketing campaigns and attend fashion events, they can then share behind-the-scenes content on Pinterest with—and build affinity among—their fans.

Yogurt brand Chobani has taken a lead in extracting that kind of value. Emily Schildt, digital communications manager, said Chobani joined Pinterest in October after spotting its fans sharing recipes and pictures on the site. Now, through pinboards, Chobani engages with about 2,000 followers. Pinterest helps Chobani drive traffic to its bloggers and shares the brand’s “personality and the values we hold and our lightheartedness,” said Schildt.

As it grows, look for Pinterest to potentially add brand-friendly insight tools and enhanced sharing options—and, possibly, to monetize its platform with Twitter-like sponsored pins, pinboards and interests.

Meantime, as John Bell, global managing director at Ogilvy & Mather’s new social media practice Social@Ogilvy, pointed out, marketers have some work to do. “The challenge to us,” he said, “is to quickly try to articulate that value so we don’t shut ourselves out.”