EC chief will sanction eavesdropping online if admen agree to behave themselves

October 22, 2011

Ever heard of Robert Madelin? The chances are you have not. Don’t worry, it won’t hold you back in life. Unless you happen to be a major advertiser or senior advertising executive. In which case, you should be ashamed of your ignorance.

Forget the Bailey Report, forget erotically charged images on posters. The frontiers of commercial freedom have already moved to a more strategic battle-front. One where the weapons of choice are electronic spies and surveillance.

If advertisers win this battle, the prize is very great. Using what is termed “behavioural targeting” – (sometimes “behavioural analytics” or “online tracking”, but let’s call it BT for the sake of simplicity) – they will be able to plot the course of any internet journey an individual ever makes. True, they won’t be allowed to know that individual’s real name, date of birth or physical address. But they will, by inference, be able to draw over time an incredibly intimate portrait of his or her most heartfelt material desires.

BT is, or rather will be, infinitely more valuable to advertisers than their best current tool, contextual advertising – which relies upon careful targeting of web-page content rather than anything known about the disposition of its visitor. Andrew Walmsley, a noted industry expert on the subject, is in no doubt that BT will supplant demographics-based contextual advertising:

We’re still going to see demographics used online, but principally so it can be benchmarked against other media. But, just as we sometimes hear the Fahrenheit temperature given on the weather forecast, it’s really just for the old folks.

His article is, by the way, a useful reminder that not all BT is the same: there are at least six varieties, of varying potency.

So, win-win: bring it on. Except, of course, that BT is deeply invasive of individual privacy. Technically, it relies upon access to an electronic spy – a special kind of cookie – planted in the heart of every individual’s hard-disk drive. Without consent, its exploitation could be considered not only an infringement of the Data Protection Act, but the wider European Human Rights Act. Many civil rights advocates would go further and invoke the shade of George Orwell. Unregulated, information acquired through online tracking could pass into the hands of shady, unlicensed third-party operators – for example, totalitarian-minded apparatchiks or deeply unscrupulous businessmen – with who knows what consequences for our civil liberties.

I come back to Madelin. Who is he? None other than the director general of Information Society and Media, European Commission (EC/INFSO for short). In other words, the senior civil servant in charge of the Brussels bureau concerned, among other things, with reconciling the needs – commerce among them – of the information society and EU civil liberties.

One of Madelin’s unenviable tasks is to act as ringmaster in the interpretation of a new ePrivacy Directive, promulgated in May this year but only fully effective from next spring.

A key bone of contention between the two warring factions he must conciliate – let’s call them “industry” and “civil society”, because that’s what they call themselves – is whether the new legislation actually requires “prior informed consent” being given to any organisations wishing to place or access files stored on a personal computer. And if so, just what definition is placed on the term ‘file’.

An extreme interpretation of these new rules would mean unmitigated triumph for the privacy lobby. Every time a cookie (not all of which are concerned with online tracking, of course) came up, it would have to be accompanied by a pop-up demanding instant consent or denial. Tedious in the extreme for the online user, and disastrous for industry.

The more nuanced civil society position seems to be an “Opt In” choice for the individual user, backed by  statutory legislation, but applicable only to those cookies capable of commercial online tracking.

Not surprisingly industry, whose position has been articulated by the Internet Advertising Bureau and something called EASA (European Advertising Standards Alliance), is having none of this.

It believes the civil society stance is flawed and naive. Specifically, the privacy lobbyists fail to understand that the free advantages we enjoy on the internet these days  – such as email, news, social networking, maps, entertainment – have only come about because they have been subsidised by advertising revenue. In this sense, BT is merely “the next stage” in a process which has been going on for two decades.

Worse, what lurks behind the civil society position is not so much a concern for advancing individual privacy as a profoundly hostile attitude to commerce – which is regarded as sinister and manipulative.

Industry is not arguing there should be no restrictions on BT, merely that they should be – you guessed – minimal and self-regulated; in fact, drawn up on the British ‘voluntary’ model of advertising regulation. It disputes that the “informed consent” required by the new legislation need be “prior”. Hence its adoption of what we might call an “Opt Out” strategy.

Put simply, the industry proposal amounts to a website where consumers can block online tracking by going through a long list of advertisers (those at least signing up to the IAB initiative) and clicking on check boxes. This mechanism will be identified by an icon appearing on sites where commercial tracking technology (particularly third-party cookies) is being used. And promoted along the lines of ‘better technology leads to a better life; but you, the consumer, remain in control’.

There is some doubt – even within the industry camp – that the IAB-devised plan will be enough to turn the trick on its own. Nevertheless, industry is becoming increasingly confident that is has won the day, barring a few concessions.

This confidence was backlit a few months ago by some extraordinary shenanigans in Brussels, when one member of the civil society faction stomped out of a Madelin-chaired committee meeting and subsequently accused Madelin of being “captured by industry“.

What this seems to mean is that Madelin has indeed come down in favour of Opt Out. But there will be a price to pay. It will include an open, independent, audit to which advertisers will have to submit themselves; total transparency (whatever that means, exactly) in their dealings; and an effective consumer tribunal for handling any complaints.

A key voice in all of this will be that of Chris Graham, the UK Information Commissioner and – as former chief executive of the Advertising Standards Authority – something of an expert on how the self-regulatory system works. (Purely coincidentally, the ASA is likely to be the UK  regulator if Opt Out prevails.)

Graham has yet to pronounce ex cathedra on the subject. But the broadly benign texture of his views can be gauged by a visit to the ICO website, where the talk is of the industry facing up to ‘transparency’ and ‘independent audits’.

My understanding is that the advertising industry is being given a few more months’ grace to define its regulatory position satisfactorily. Failing which, Madelin will move down the path to statutory legislation. As can be imagined, every sinew will be stretched to ensure he does not feel the need to do so.

Before leaving this convoluted subject, it might be of passing interest to hear what the punter, rather than self-appointed experts speaking on his behalf, thinks about BT.

Handily, McCann Erickson has just published a relevant piece of research under the McCann Truth Central banner. The study, which quizzed 6,500 people in the US, UK, Hong Kong, Japan, India and Chile, shows that people are indeed concerned about attacks on their personal privacy. But targeted marketing is way down the list of threats, the two principal issues being the security of financial data and the security of personal reputation.

McCann WorldGroup global IQ director Laura Simpson notes that:

65% of people around the world are aware of Web tracking and 44% are aware that marketers use it to determine the interests of consumers. “Many welcome it,” she adds, because they believe there is a fair exchange, including access to promotions and discounts and ads directed at them that are more relevant to their needs.

Then again, as one industry commentator on the article points out, that enthusiasm may be conditioned by poor understanding of how sophisticated BT actually is.


Facebook drives soaring digital ad expenditure

March 29, 2011

Recession, what recession? None at all where expenditure on digital advertising is concerned. After the merest hint of a stutter the year before last, the engine of growth has surged to new heights of performance. Annual spend is up nearly 13% according to the latest, and much awaited, biannual study by the Internet Advertising Bureau and PwC. That’s close to double the rate of recovery in the rest of UK media spend (7.2%) over the same period.

The easiest way to grasp the overall significance of the survey’s data – which is rich to the point of indigestion in statistics and trends – is to remember the 3 Quarters.

One quarter of all UK media spend – or £4.1bn – now goes online. That makes it nearly, but not quite, the biggest medium. Television remains ahead by a whisker (26% versus 25%), but is likely to experience slower growth. You can draw your own conclusions about what is happening to press and the rest.

One quarter of that £4.1bn (£945m precisely) is now spent on display. Search is still dominant (57%), but is enjoying a growth rate of “only” 8%. IAB chief executive Guy Phillipson attributes the power of digital display to 3 underlying factors: the general recovery in advertising confidence during 2010;  more importantly, “the power of online to build brands” (an issue which has held it back in the past); and faster and more reliable broadband delivery, which has helped to stimulate video streaming.

One quarter of all time spent online in the UK is dedicated to social media, of which by far the largest component is Facebook. According to ComScore, cited in NMA, the social network accounted for 81.6bn page impressions in Q4, 2010 alone. More than anything else, we could speculate, it is Facebook – with its enviable reach, dwell time, and video opportunities – which has given advertisers the confidence to plunge into online display in such a committed way.

Two other accelerants of growth are worth noting. First, packaged goods companies, for long sceptical about dipping their toes in the digital pond, are now within the top three digital online spending categories, outgunned only by finance and entertainment and media.

Second, mobile advertising budgets more than doubled (116%) last year to reach £83m. That may still be a small figure, compared with the online total, but it demonstrates beyond doubt advertiser confidence in smart phone platforms. While on this subject, a report just out from US consultants Borrell Associates identifies mobile as the key revenue driver in the internet’s most hotly contested battlefield, “local” (see Groupon, Craigslist etc).

For more on the IAB survey, check out its website.


Deloitte research gives ITV more impact

August 24, 2010

ITV and commercial television cheerleader Tess Alps (of Thinkbox) will have been heartened by an indisputably solid piece of YouGov research  – not their own, as it happens – which bolsters the traditional 30-second ad spot and trashes the pretensions of its so-called digital nemesis.

Tess Alps: Manna from heaven

The results, distilled from 4,199 respondents on behalf of Deloitte as a preamble to this week’s Edinburgh TV Festival, could not be more on message if Thinkbox had designed them. TV advertising appealed most to 18- to 34-year-olds and least among over-55s. What’s more, nearly 90% of the 18- to 24-year old cohort was prepared to admit that advertising had some kind of impact upon them.

Best of all, for the TV lobby at least, more than half the respondents said television was more memorable than any other kind of advertising medium, compared with 10% who opted for newspapers as their favourite medium and – here’s the corker – 2% for online video ads, and 1% for online banner ads, and ads on iPhones and iPads.

If I were Guy Phillipson or one of his eager team of analysts at the Internet Advertising Bureau, I’d be demanding a recount. I’d point out that there are going to be a lot fewer 18- to 34-year-olds about in the years to come; and a lot more over-55s (who do use the internet, and hold an increasing part of the nation’s disposable wealth). I’d also ask how TV impacts measure up in terms of actual viewing (as opposed to distracted multi-tasking).

Still, there’s no denying that television – according to a significant majority of the population – remains by a long chalk the best brand-building medium.


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