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June 14, 2009 - June 20, 2009

June 19, 2009

GOP Memo Reveals Privacy Law Sausage-Making Ingredients

Several introductory statements given by Republican members two House Energy and Commerce Subcommittees yesterday stressed the need to ensure that any potential federal privacy legislation is not "overreaching," or doesn't create online ad industry winners and losers. Not surprising for typically pro-business Republicans leery of government infringement that can detriment market fairness.

For instance, as I noted in today's story about the hearing on behavioral advertising, Louisiana's Steve Scalise suggested "self-regulation is sufficient," and added, "Congress should not pick winners or losers."

I thought about his and similar statements when perusing an intriguing memo evidently delivered to GOP Members of those subcommittees from "Republican Committee Staff." The memo suggests Republicans push for a "consumer-centric" regulatory approach rather than a technology-centric one.

"Rather than taking approaches that focus on particular technologies or particular corporate relationships, we should consider a regime that focuses on consumers. A consumer-centric approach is competitively- and technologically-neutral, because it would apply the same standards to everyone participating in the tailored Internet advertising market, regardless of the technology they use or how they happen to have structured their company. It also places the decision about what information can be collected and/or shared in the consumer's hands based on his or her preference," states the memo.

A tech-centric approach would, for instance, outlaw things like deep-packet inspection - the much-maligned ISP-based tracking and targeting method used by companies like NebuAd and Phorm. From the memo: "Focusing on deep packet inspection would also achieve little improvement in consumer privacy because it is barely being used, if at all, in the United States to tailor and deliver online advertising. A deep packet inspection-focused approach would instead only keep phone and cable companies out of the Internet advertising business while online companies continue to expand the market."

A "consumer-centric" approach would give Web users the ability to decide what information companies can use. How? Uh, that might be just as daunting a task as legislating based on always-evolving technologies.

As the memo states, "Each consumer therefore decides how he or she feels about the information being collected, the parties doing the collecting, and the purpose for which the information will be used.... Additionally, this approach takes the government out of the equation: government does not have to define what information is sensitive and personally identifiable, what uses of the information are allowable, and what technologies are acceptable."

Those interested in inspecting how our government makes its kielbasa (including sage from the WH garden?) also may have noticed that one of yesterday's hearing witnesses, Scott Cleland, also concluded in his written testimony, "If Congress decides to legislate on Internet privacy, a consumer-driven, technology/competition neutral privacy framework would be superior to a technology-driven privacy framework."

Coincidence? Maybe. The similar use of language is of interest, though.

Also interesting is why Cleland was asked to testify at the hearing. He shows up from time to time at these things - usually at hearings related to antitrust issues though. Cleland has long been a thorn in Google's side. (The company has been known to send the Internet tech industry/government press corps background details on the guy. He's the president of tech industry research and consulting firm Precursor and has been an outspoken critic of Google. He testified before congress against the firm's acquisition of DoubleClick. He has also worked as a consultant for Google's nemesis, Microsoft. He's gained a reputation as a shill for telcos. I'm not saying he is, but he's gained that reputation. Remember what the memo said about a deep packet inspection-focused approach keeping phone and cable cos. out of the Internet ad biz? Hmmm....

OK, so, that leads me to wonder whether Google - which wants federal privacy legislation, mainly so there's only one tangle of red tape to deal with rather than several state-based tangles - is in favor of a tech-based solution. And of course, I want to know if Microsoft is. Unfortunately, the hearing was cut short yesterday and didn't resume until evening, by which time I was already onto my second or third $7 PBR + whiskey shot at Rodeo Bar. I'll be listening once the files are posted to the House Energy and Commerce committee site.

Also interesting: Google and Yahoo had reps witnessing at the hearing. MSFT did not. Or did it? Hmmm....

Posted by Kate Kaye at 12:58 PM | Permalink | Comments (1)

June 18, 2009

NBC Universal to Use Microsoft's Navic Platform to Sell TV Ads

A Microsoft source recently told me the company has begun trumpeting its TV ad management capabilities to networks and cable companies in earnest. This source said a deal with a major broadcast network was imminent.

It now appears that deal has dropped. In an agreement reported this morning by the Journal, Microsoft will provide automated TV ad selling tools to NBC Universal. NBC will use the system to broker ads on its broadcast and cable networks.

Microsoft acquired those capabilities a year ago this week with the acquisition of Navic Networks. Navic's platform offers services for both buyers and sellers. Advertiser-facing features include addressable ads, automated media buying, and Web-like campaign reporting tools. The company can also help TV media buyers customize their branded TV applications and other on-demand interfaces; these can be accessed through telescoping within interactive TV ads.

The fact that Microsoft's first big deal for Navic is with NBC Universal comes as no surprise. The two companies have long had a very cozy relationship, especially on advertising matters. Internally, their MSNBC.com joint venture is held up as the gold standard for digital ad effectiveness -- within the Microsoft stable, anyway.

NBC Universal's president of sales and marketing, Mike Pilot, told WSJ the broadcaster wants to streamline the ad sales process in part to free up time to create more custom ad packages.

Posted by Zachary Rodgers at 8:57 AM | Permalink | Comments (2)

June 17, 2009

Bing Continues to Gain Share in Week Two

Microsoft's relaunched search experience continued to pile on new users in its second week, according to a new comScore estimate.

After gaining market share of almost 2 percent during the the first week of its launch (June 1 to 5), Microsoft racked up another 1 percent of share last week (June 8 to 12), the researcher said. That put Microsoft's average daily reach among U.S. searchers at 16.7 percent, up 3 percentage points from pre-Bing levels. Its share of search result pages grew by the same amount, increasing to 12.1 percent last week.

The finding by ComScore suggests the extensive advertising and PR around Bing are doing what they're supposed to. However the real test will come in future weeks and months, when the early trial users either stick with Bing or go back to their previous search engine of choice.

Posted by Zachary Rodgers at 11:28 AM | Permalink | Comments (3)

Finally, a Digital Agency Buys a Traditional One

What we're reading this morning:

-Sapient to Acquire Nitro Group (Wall Street Journal) I've been waiting years for this to happen. Not sure this is really the first, but I do believe it's the first of any size. Deal is worth approximately $50 million.

-Recession Could Leave Digital Ads in Stronger Position (New York Post) Category will claim nearly 20 percent of ad spend as others permanently decline, PwC finds.

-More MySpace Layoffs to Come... Overseas (TechCrunch) More than a hundred staffers will be cut at the company's international offices, according to unnamed sources in this report.

Posted by Zachary Rodgers at 7:26 AM | Permalink | Comments (0)

June 16, 2009

Microsoft Sues Three for Click-Fraud

A sampling of what ClickZ's editors are reading this morning:

-Microsoft Sues Three in Click-Fraud Scheme (NYT) Filing follows year-long investigation.

-P&G Viral Video Attempt Replaces 'Guy Parts' with 'Girl Parts (AdAge) Risque effort for Tampax is a surprise coming from CPG giant.

-Facebook dethrones MySpace in the U.S. (LA Times) Comscore's latest numbers show News Corp.'s dominant social media reach has been usurped.

-Multilayered Cadbury Campaign Takes Off (Mashable)

-Startup AdMob Talks With Possible Buyers (Bloomberg)

Posted by Zachary Rodgers at 11:27 AM | Permalink | Comments (3)

An Indication of Yahoo Paper Consortium Impact

Exactly how much ad revenue has been derived through Yahoo's relationships with its growing newspaper consortium is unknown. But, the partnerships seem to be getting more solidified as Yahoo reveals a few results, and new members join the gang.

Yahoo added two Freedom Communications papers and two North Jersey Media Group papers to its list. It also finally signed up The San Diego Union-Tribune - that's SignOnSanDiego.com. Last July, the company told me it was considering linking with Yahoo. The partnership includes 814 papers now, up from 176 at launch in November 2006.

A few numbers from Yahoo, according to today's press release:
- Over 160 newspapers are live on Yahoo's APT ad management platform. The system launched in September '08 with Hearst's San Francisco Chronicle and MediaNews Group's San Jose Mercury News.

- Yahoo also said 288 paper sites have launched its search products - contextual ads, paid search, and Web search; in addition, 592 of the partners use Yahoo's HotJobs exclusively for job ads.

- Yahoo also provided an anecdotal example of ad selling success in the release, noting that Indiana's Evansville Courier "recently sold $1.1 million of Yahoo! targeted ads during a one-week sales blitz."

Again, it's tough to know exactly how well the consortium project is going, at least in terms of its positive impact on the publisher partners' bottom lines. Still, the fact that it's expanded so much through more than 2 years of turmoil at Yahoo says something.

Posted by Kate Kaye at 11:25 AM | Permalink | Comments (0)

Why Pharma Giants Fear Online Media

Quip of the Day:

"The only way you could use the term 'flock' in connection with pharmaceutical firms and social media is to say that companies are a scared flock of geese... How many minutes in a video or Webcast before you have to mention the risk information associated with a drug? If you mention a benefit, how much time do you have to mention the risk? Know the answer? No, no one does."

-Eye on FDA blogger Mark Senak, rebutting a Washington Post claim that drug makers are "flocking" to social media.

Posted by Zachary Rodgers at 10:38 AM | Permalink | Comments (0)

June 15, 2009

Why Web Video Ventures Are Failing

Some links to stories ClickZ's editors are reading today:

Original Video Ventures Going Dark (LA Times) Stage 9 Digital, 60Frames, and others are throwing in the towel on made-for-Web video entertainment as economics prove too tough a nut to crack.

Twitter Helps Dell Rake in Sales (Reuters) PC giant claims $3 million in sales over the course of two years on Twitter click-throughs.

Amazon to Run First TV Ads in Seven Years (AdWeek) Kicks off user-generated media contest to develop concepts and creative. No agency is attached.

AdEx Media Closes $2.3 Million Financing. Performance-based ad network will use the cash to build out products.

Posted by Zachary Rodgers at 1:00 PM | Permalink | Comments (0)

Conquering Eastern Europe a Challenge for Western Firms

I've written a couple of pieces regarding the booming Eastern European online ad market recently, but entering those markets as a Western firm isn't as easy as it may seem. That was the message from the "winning business in emerging markets" panel at last week's Interactive Advertising Bureau Europe Interact conference in Brussels.

Comscore VP Europe Mike Read kicked things off with some encouraging Eastern European growth figures. However, the panelists suggested the realities of actually doing business in and generating revenue from those markets remained a challenge.

"If we take Russia as an example, the 'I come and I conquer' attitude doesn't fly," said Andrey Sveshnikov, who is in the process of setting up an IAB in that country. "Russia is a historically and culturally complex place. Setting up business there will take patience, and may require you to alter your business model," he added.

Filip Pieczynski, VP of Poland-based online research firm Gemius, warned against underestimating local online brands, and indeed the governments of places such as Russia. He cited Google's relative obscurity in the search market there, for instance, alluding to its proposed deal to acquire ZAO Begun which was blocked by Russian regulators.

That said, the panel -- which also included Martin Radelfinger, chief business development, M&A officer of prominent Eastern European media firm, Goldbach Media -- acknowledged that if the time was spent to understand the local cultures and markets, margins could be achieved, through the discounted cost of human resources, if nothing else.

Ultimately, the key takeaway, and something I found extensively during my reporting on the region, was summed up nicely by Pieczynski: "Each individual market is completely different. There's no golden rule to conquer all."

Posted by Jack Marshall at 6:39 AM | Permalink | Comments (0)

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