The leading trade associations in the online advertising industry have just released their new self-regulatory principles—the first comprehensive self-regulatory principles industry has produced, which track closely with the suggested guidelines released by the FTC in February.
I commend the industry for setting a new standard in transparency, consumer control and data security. These Principles do much to empower Americans to make their own decisions about privacy, but I fear that many critics of so-called “targeted advertising” will
never be satisfied, no matter how high industry raises the bar.
These critics have insisted that ordinary users can’t be trusted to make the “right decisions” about privacy and have insisted on imposing restrictive default “opt-in” rules for the online data collection that makes online advertising valuable to websites that rely on ad revenue. Such pre-emptive privacy regulation would stunt the growth of revenue for the “Free” online content and services we’ve all come to take for granted. During a time of economic recession, and as traditional media like newspapers struggle to make the transition from print to the Internet, it’s more important than ever that policymakers allow self-regulation to evolve. Only by doing so can we expect continued innovation and creativity online. We must all remember: There is no free lunch!
I’ll lead a panel discussion on July 10 on Capitol Hill about “Regulating Online Advertising: What Will it Mean for Consumers, Culture & Journalism?” Please RSVP here.
As I noted recently, Berin Szoka and I just released a big PFF white paper (PDF) entitled, “Cyberbullying Legislation: Why Education is Preferable to Regulation,” which examines two very different federal approaches to the issue. One approach is focused on the creation of a new federal crime to punish cyberbullying, which would include fines and jail time for violators. One approach, set forth by Rep. Linda Sánchez (D-CA) in H.R. 1966 (originally H.R. 6123), the “Megan Meier Cyberbullying Prevention Act,” would create a new federal felony: “Whoever transmits in interstate or foreign commerce any communication, with the intent to coerce, intimidate, harass, or cause substantial emotional distress to a person, using electronic means to support severe, repeated, and hostile behavior, shall be fined under this title or imprisoned not more than two years, or both.”
The other legislative approach is education-based and would create an Internet safety education grant program to address the issue in schools and communities. In mid-May, the “School and Family Education about the Internet (SAFE Internet) Act” (S. 1047) was introduced in the Senate by Sen. Robert Menendez (D-NJ) and in the House by Rep. Debbie Wasserman Schultz (D-FL). The measure proposes an Internet safety education grant program that will be administered by the Department of Justice, in concurrence with the Department of Education, and the Department of Health & Human Services.
On June 12, the Family Online Safety Institute (FOSI) hosted a discussion about these bill on Cap Hill, which was moderated by FOSI CEO Stephen Balkam. Representatives from both Rep. Sanchez’s and Sen. Menendez’s offices were on hand to discuss their bills, and I provided some feedback based upon what Berin and I concluded in our paper. It was a good discussion and I encourage you to watch the whole thing because there were some good questions from the audience later in the show.
http://www.youtube.com/v/FsCpOgwTqQM&hl=en&fs=1&
Fred Vogelstein’s essay in Wired, “Great Wall of Facebook: The Social Network’s Plan to Dominate the Internet — and Keep Google Out” describes the intensifying clash between Google and Facebook—a clash that focuses on the ability to target advertising:
Like typical trash-talking youngsters, Facebook sources argue that their competition is old and out of touch. “Google is not representative of the future of technology in any way,” one Facebook veteran says. “Facebook is an advanced communications network enabling myriad communication forms. It almost doesn’t make sense to compare them.”
Apart from noting that Facebook directs users to Microsoft’s Bing as its default search engine for the Internet at large, the most interesting part of the article is Facebook’s “4-Step Plan for Online Domination”:
1. Build critical mass. In the eight months ending in April, Facebook has doubled in size to 200 million members, who contribute 4 billion pieces of info, 850 million photos, and 8 million videos every month. The result: a second Internet, one that includes users’ most personal data and resides entirely on Facebook’s servers.
2.
Redefine search. Facebook thinks its members will turn to their friends—rather than Google’s algorithms—to navigate the Web. It already drives an eyebrow-raising amount of traffic to outside sites, and that will only increase once Facebook Search allows users to easily explore one another’s feeds.
3.
Colonize the Web. Thanks to a pair of new initiatives—dubbed Facebook Connect and Open Stream—users don’t have to log in to Facebook to communicate with their friends. Now they can access their network from any of 10,000 partner sites or apps, contributing even more valuable data to Facebook’s servers every time they do it.
4.
Sell targeted ads, everywhere. Facebook hopes to one day sell advertising across all of its partner sites and apps, not just on its own site. The company will be able to draw on the immense volume of personal data it owns to create extremely targeted messages. The challenge: not freaking out its users in the process.
Facebook can’t keep losing money forever. Indeed, investors are willing to keep sinking money into Facebook during Phases 1-3 because they think it will pay off in Phase 4—when Facebook really threatens to be a fGoogle-killer. But rather the fact that investors are willing to subsidize the creation of a wonderful platform now used by 200 million people (one fifth of all Internet users worldwide), or that Facebook might finally provide a counter-weight to the fearsome Google, the People for the Ethical Treatment of Data (PETD) are appalled. One commenter on the Wired story put it best: Continue reading →
Adam Thierer and I have been trying to drive home a simple message in the ongoing debate about targeted online advertising and privacy: “There is no Free Lunch!” We don’t have a lot of friends in this debate, since nearly everyone else seems to assume that online content and services will just continue to fall like manna from heaven if politicians strangle advertising online. So I was particularly heartened to read the following from Shelly Palmer:
This is the most serious question facing content producers today. Content costs money to produce. Third-party advertising/sponsor support is one model, promoting your own products is another, subscription is a third. At the end of the day, there are only three ways it works: I pay, you pay or someone else pays. Unfortunately, there is no business model called “no one pays.” In the case of MediaBytes, the model is “I pay.” It works for me as stated above. But, apparently, a fairly large number of people in my audience are uninterested in seeing even relevant product offerings. Is advertising over? If so, what’s next?
Amen! Shelly hosts a daily Internet talk show on technology and media called MediaBytes. He recently tried inserting a short ad at the beginning of the show to cover the significant costs of production:
The show is produced every business day and requires a research staff, a writer (me), an editor, an encoding/distribution manager and an affiliate relations staff. The reason for the production overview is that, this particular two-minutes may look like a talking head combined with some graphics and clips, but the work flow for any given show takes approximately 6 hour and all of the people involved in the production are on salary here at Advanced Media Ventures Group. And, for the record, MediaBytes, and the associated production materials, takes up approximately 25% of my day.
Unfortunately, Shelly’s audience seemed to feel entitled to receive the fruit of his hard work for free—without suffering the
agony of watching… horror of horrors: advertising!. Continue reading →
In response to my essay last night about this new Free Press campaign to layer price controls on the Internet by banning metered prices via Rep. Massa’s new bill (the “Broadband Internet Fairness Act“), George Ou and Richard Bennett reminded me of some of the contradictory statements that the (Un)Free Press crew have made on this issue. Indeed, if you look back at what Free Press and their chairman have said about the matter over just the past 18 months, they seem to be whistling two very different tunes.
For example, George Ou reminded me of what Free Press had to say in its November 2007 filing in the FCC’s Comcast-Bit Torrent proceeding:
“More importantly, if Comcast is concerned that the collective set of users running P2P applications are affecting quality of service for other users on a cable loop… they could also charge by usage.” (p. 29)
[…]
“Indeed, in many nations, network providers do meter, and bill their customers on the basis of amount used. So the transaction costs of doing so must not be prohibitively high. Indeed, a network provider can apparently meter cheaply because, in most networks, users’ traffic to and from the Internet passes through a single gateway, the network access server.” (p. 31)
And Richard Bennett reminded me of what Tim Wu, chairman of the Free Press, had to say about metering to the Washington Post just one year ago:
“I don’t quite see [metering] as an outrage, and in fact is probably the fairest system going — though of course the psychology of knowing that you’re paying for bandwidth may change behavior.”
So, what gives? Will the real Free Press please stand up? Does the Free Press believe in pricing freedom or price controls for the Internet?
by Berin Szoka & Adam Thierer
This morning, the House Energy & Commerce Committee will hold a hearing on “Behavioral Advertising: Industry Practices And Consumers’ Expectations.” If nothing else, it promises to be quite entertaining: With full-time Google bashers Jeff Chester and Scott Cleland on the agenda, the likelihood that top Google officials will be burned in effigy appears high!
Chester, self-appointed spokesman for what one might call the People for the Ethical Treatment of Data (PETD) movement, is sure to rant and rave about the impending techno-apocalypse that will, like all his other Chicken-Little scenarios, befall us all if online advertisers were permitted to better tailor ads to consumers’ liking. After all, can you imagine the nightmare of less annoying ads that might actually convey more useful information to consumers? Isn’t serving up “untargeted” dumb banner ads for Viagra to young women and Victoria’s Secret ads to Catholic school kids the pinnacle of modern online advertising? Gods forbid we actually make advertising more relevant and interest-based! (Those Catholic school boys may appreciate the lingerie ads, but few will likely buy bras.)
Anyway, according to National Journal’s Tech Daily Dose, the hearing lineup also includes:
- Charles Curran, Executive Director, Network Advertising Initiative
- Christopher Kelly, Chief Privacy Officer, Facebook
- Edward Felten, Director, Center for IT Policy, Princeton University
- Anne Toth, Chief Privacy Officer & Vice President, Policy, Yahoo!
- Nicole Wong, Deputy General Counsel, Google
That’s an interesting group and we’re sure that they will say interesting things about the issue. Nonetheless, because four of them have a corporate affiliation that fact will inevitably be used by some critics to dismiss what they have to say about the sensibility of more targeted or interest-based forms of online advertising. So, we’d like to offer a few thoughts and pose a few questions to make sure that Committee members understand why, regardless of what it means for any particular online operator,
targeting online advertising is very pro-consumer and essential to the future of online content, culture, and competition. As Wall Street Journal technology columnist Walt Mossberg has noted, “Advertising is the mother’s milk of all the mass media.” Much of the “free speech” we all cherish isn’t really free, but ad-supported!
Continue reading →
You really have to hand it to the folks over at the (Un)
Ah yes, “Internet fairness.” Who can possibly be against it? Well, before you rush to click send on that UnFree Press form letter, let’s be clear what this effort is really all about. Free Press claims that the Massa bill is needed because “phone and cable giants [are] weighing schemes to hike prices, shut down the free-flowing Web and keep user innovation in check.” How are those companies doing that? Tiered pricing! Rep. Massa says that, “Time Warner has announced an ill-conceived plan to charge residential and business broadband fees based on the amount of data they download.” Oh my God, no… you mean some people might be charged for the costs they impose? What’s next? Are we going to force people to pay for their own energy use by metering gasoline, electricity, or water? Think of the horror! (This is sarcasm, folks. All those things are metered currently. And yet, somehow, the Earth hasn’t spun off its axis.)
Like all the other propaganda produced at the Free Press techno-spin factory, their latest crusade is based on a combination of outright lies and blatant economic ignorance. Metering broadband access is not an effort “to restrict Internet use,” as Free Press claims. Rather, like every other metered system under the sun, it’s an effort to price a scarce resource in such a way so as to
maximize use. Broadband operators don’t sit around all day scheming to find ways to decrease network usage. They wouldn’t make any money that way!! They need to find business models that encourage increased uptake while also investing in and growing their networks to meet new demand and competitive challenges.
Moreover, there are other pro-consumer reasons for companies to consider metering options. Unless it is your goal to allow some particularly aggressive users to be subsidized by all other users, it is sometimes sensible to price usage based on demand. If you don’t, you potentially create a perverse incentive for a small handful of over-grazers to to be feeding at the trough at everyone else’s expense. As economist Russell Roberts aptly noted in the title of a famous 1995 Wall Street Journal editorial, “If You’re Paying, I’ll Have Top Sirloin.” Thus, you would never want to make the “all-you-can-eat” pricing model the only option for the provision of a scarce resource. Even if you choose not to deploy it, it is useful to have the metered pricing model available in case you need to charge the over-grazers at some point.
Continue reading →
Internet policy Shame Artist extraordinaire Chris Soghoian has struck again! Chris recently shamed the online advertising industry into improving their privacy practices with his Targeted Advertising Cookie Opt-Out (TACO) plug-in for Firefox. Now Chris has set his sight on the security practices of cloud service providers.
A letter released this morning, signed by 37 leading online security experts (and organized by Chris), calls on Google to offer persistent SSL (HTTPS) encryption by default for all Google services—or at the very least, to make more visible the option currently given to users to opt-in to use SSL for all communications. Google, in its response, indicated that it was already “looking into whether it would make sense to turn on HTTPS as the default for all Gmail users.”
While Google’s response identifies some clear problems with implementing persistent SSL for all users (esp. connection speed), few would deny that it makes sense for webmail providers to encrypt all traffic using SSL, rather than sending email data “in the clear,” which risks interception by hackers. We at PFF hold no brief for Google, in fact we have found ourselves disagreeing with them on many other occasions on a range of issues (most notably net neutrality mandates). Nonetheless, on this front, Google has long been a leader, having offered SSL since Gmail launched and having begun providing the persistent HTTPS option last summer while most of their competitors still use SSL only for the initial authentication that occurs when a user first signs in. While the letter focuses on Google and webmail in particular, this issue has far broader implications for all online cloud service providers.
No Free Lunch: The Costs of Encryption
Gmail, Yahoo! Mail, Hotmail, etc. are, of course, “free” (
i.e., ad-supported). Google in particular has lead the way in increasing the functionality offered in Gmail, not just constantly increasing the total storage space provided to every user (now over 7GB), but regularly adding innovative new features—at no charge to users. Continue reading →
Adam Thierer & I have just released a detailed examination (PDF) of brewing efforts to expand the Children’s Online Privacy Protection Act of 1998 to cover adolescents and potentially all social networking sites—an approach we call “COPPA 2.0.”
As Adam explained on Larry Magid’s CNET podcast, COPPA mandates certain online privacy protections for children under 13, most importantly that websites obtain the “verifiable consent” of a child’s parent before collecting personal information about that child or giving that child access to interactive functionality that might allow the child to share their personal information with others. The law was intended primarily to “enhance parental involvement in a child’s online activities” as a means of protecting the online privacy and safety of children.
Yet advocates of expanding COPPA—or “COPPA 2.0″—see COPPA’s verifiable parental consent framework as a means for imposing broad regulatory mandates in the name of online child safety and concerns about social networking, cyber-harassment,
etc. Two COPPA 2.0 bills are currently pending in New Jersey and Illinois. The accelerated review of COPPA to be conducted by the FTC next year (five years ahead of schedule) is likely to bring to Washington serious talk of expanding COPPA—even though Congress clearly rejected covering adolescents age 13-16 when COPPA was first proposed back in 1998.
We’ll discuss some of the key points of our paper in a series of blog posts, but here are the top nine reasons for rejecting COPPA 2.0, in that such an approach would:
- Burden the free speech rights of adults by imposing age verification mandates on many sites used by adults, thus restricting anonymous speech and essentially converging—in terms of practical consequences—with the unconstitutional Children’s Online Protection Act (COPA), another 1998 law sometimes confused with COPPA;
- Burden the free speech rights of adolescents to speak freely on—or gather information from—legal and socially beneficial websites;
- Hamper routine and socially beneficial communication between adolescents and adults;
- Reduce, rather than enhance, the privacy of adolescents, parents and other adults because of the massive volume of personal information that would have to be collected about users for authentication purposes (likely including credit card data);
Continue reading →
As part of our ongoing series that tracks the gradual transition of video content to the boob tube to online outlets, I want to draw everyone’s attention to two excellent articles in today’s Washington Post about this trend. One is by Paul Fahri (“Click, Change: The Traditional Tube Is Getting Squeezed Out of the Picture“) and the other by Monica Hesse (“Web Series Are Coming Into A Prime Time of Their Own“). I love the way Paul opens his piece with a look forward at how many of us will be explaining the “old days” of TV viewing to our grand kids:
S
it down, kids, and let Grandpa tell you about something we used to call “watching television.”
Why, back when, we had to tune to something called a “channel” to see our favorite programs. And we couldn’t take the television set with us
; we had to go see it!
Ah, those were simpler times.
Oh, sure, we had some technology we thought was pretty fancy then, too, like your TiVo and your cable and your satellite, which gave us a few hundred “channels” of TV at a time. Imagine that — just a few hundred! And we had to pay for it every month! Isn’t the past quaint, children?
Well, it all started to change around aught-eight, or maybe ’09, for sure. That’s when you no longer needed a television to watch all the television you could ever want.
Yes, I still remember it like it was yesterday . . .
Too true. Anyway, Paul goes on to document how some folks have already completely made the jump to an online-online TV existence and are doing just fine, although the idea of us all gathering around the tube to share common experiences may be a causality of the migration to smaller screens, he notes.
Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.