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March 27 2012

14:00

FTC: If It's Your Computer, You Should Own Your Data

If you own your computer, you should own the data that's on it. That's the message from Federal Trade Commission Chairman Jon Leibowitz.

At a Washington press conference -- also broadcast -- the FTC issued a new report on Internet privacy. Leibowitz praised how far the nation's come in protecting data, even from this time last year. But he also shared that consumers still need more clarity and control over their personal information.

The event opened with this animated primer about how information is collected, and where it goes.




































The FTC made three main recommendations:

  • Social media sites, apps, browsers, retailers and Internet service providers among others should adopt "privacy by design." In other words, privacy should come first.
  • Companies should work towards better transparency. The average privacy policy, Leibowitz said, is longer than the Declaration of Independence.
  • Consumers and businesses should receive simple choices to decide what information is shared. This should include a "Do Not Track" option.

"'Do Not Track' from our perspective means do not collect," Leibowitz said. "We need to have a 'Do Not Track' option that is persistent, easy to use and effective. "

In the past year, he said, large platforms and marketers made a lot of progress toward protecting privacy, partly because it's the right thing to do, and partly because they want to keep consumers' trust.

"It's amazing how far these companies have come," Leibowitz said. "I think we're all pulling in the right direction. People just get it -- it's the right thing to do ... It's better for your business."

'Best practices'

privacyreport.jpg

Overall, the report falls more into the category of "best practices" than regulations. The point, he said, was "not to erect a stoplight, but to take a look at the traffic patterns." Yet he urged Congress to enact tougher privacy protection laws, and noted that the FTC's power is based in its ability to enforce the law.

For example, last spring Google settled FTC charges that it violated user privacy when it launched Google Buzz. Then last fall Facebook settled an FTC lawsuit alleging it repeatedly deceived users about their privacy.

The lengthy report certainly sets the stage for more debate. It ends with a dissenting statement from FTC Commissioner J. Thomas Rosch. His concerns include that the report had no limiting principles, and could be seen as a mandate.

"It would install 'Big Brother' as the watchdog over these practices, not only in the online world but in the offline world," he wrote. He also added that there's no universally accepted definition of what "Do Not Track" means.

"I still worry about the constitutionality of banning take-it-or-leave-it choice (in circumstances where the consumer has few alternatives)," Rosch opined. "As a practical matter, that prohibition may chill information collection, and thus impact innovation, regardless whether one's privacy policy is deceptive or not."

Terri Thornton, a former reporter and TV news producer, owns Thornton Communications, an award-winning PR and social media firm. She is also a freelance editor for Strategic Finance and Management Accounting Quarterly.

This is a summary. Visit our site for the full post ».

January 05 2012

15:15

The newsonomics of the News Dial-o-Matic

It’s an emerging issue of our time and place. They know too much about us, and we know too little about what they know. We do know that what they know about us is increasingly determining what they choose to give us to read. We wonder: What are we missing? And just who is making those decisions?

Today, in 2012, those questions are more pressing in our age of news deluge. We’re confronted at every turn, at every finger gesture, with more to read or view or listen to. It’s not just the web: It’s also the smartphone and especially the tablet, birthing new aggregator products — Google Currents and Yahoo Livestand have joined Flipboard, Pulse, Zite, and AOL Editions — every month. Compare for a moment the “top stories” you get on each side-by-side, and you’ll be amazed. How did they get there? Why are they so different?

Was it some checkbox I checked (or didn’t?!) at sign-in? Using Facebook to sign in seemed so easy, but how is that affecting what I get? Are all those Twitterees I followed determining my story selection? (Or maybe that’s why I’m getting so many Chinese and German stories?) Did I tell the Times to give the sports section such low priority? The questions are endless, a ball of twine we’ve spun in declaring some preferences in our profiles over the years, wound ever wider by the intended or (or un-) social curation of Facebook and Twitter, and mutliplied by the unseen but all-knowing algorithms that think they know what we really want to read, more than we do. (What if they are right? Hold that thought.)

The “theys” here aren’t just the digital behemoths. Everyone in the media business — think Netflix and The New York Times as much as Pandora and People — wants to do this simple thing better: serve their customers more of what they are likely to consume so that they’ll consume more — perhaps buying digital subscriptions, services, or goods and providing very targetable eyes for advertisers. It’s not a bad goal in and of itself, but sometimes it feels like it is being done to us, rather than for us.

Our concern, and even paranoia, is growing. Take Eli Pariser’s well-viewed (500,000 times, just on YouTube) May 2011 TED presentation on “filter bubbles,” which preceded his June-published book of the same name. In the talk, Pariser talks about the fickle faces of Facebook and Google, making “invisible algorithmic editing of the web” an issue. He tells the story of how a good progressive like himself, a founder of MoveOn.org, likes to keep in touch with conservative voices and included a number in his early Facebook pages.

He then describes how Facebook, as it watched his actual reading patterns — he tended to read his progressive friends more than his conservative ones — began surfacing the conservative posts less and less over time, leaving his main choices (others, of course, are buried deeper down in his datastream, but not easily surfaced on that all-important first screen of his consciousness) those of like-minded people. Over time, he lost the diversity he’d sought.

Citing the 57 unseen filters Google uses to personalize its results for us, Pariser notes that it’s a personalization that doesn’t even seem personalized, or easily comparable: “You can’t see how different your search results are than your friends…We’re seeing a passing of the torch from human gatekeepers to algorithmic ones.”

Pariser’s worries have been echoed by a motley crew we can call algorithmic and social skeptics. Slowly, Fear of Facebook has joined vague grumbles about Google and ruminations about Amazon’s all-knowing recommendations. Ping, we’ve got a new digital problem on our bands. Big Data — now well-advertised in every airport and every business magazine as the new business problem of the digital age to pay someone to solve — has gotten very personal. We are more than the sum of our data, we shout. And why does everyone else know more more about me that I do?

The That’s My Datamine Era has arrived.

So we see Personal.com, a capitalist solution to the uber-capitalist usage of our data. I’ve been waiting for a Personal.com (and the similar Singly.com) to come along. What’s more American than having the marketplace harness the havoc that the marketplace hath wrought? So Personal comes along with the bold-but-simple notion that we should individually decide who should see our own data, own preferences, and our own clickstreams — and be paid for the privilege of granting access (with Personal taking 10 percent of whatever bounty we take in from licensing our stuff).

It’s a big, and sensible, idea in and of itself. Skeptics believe the horse has left the barn, saying that so much data about us is already freely available out there to ad marketers as to make such personal databanks obsolete before they are born. They may be forgetting the power of politics. While the FCC, FTC, and others have flailed at the supposed excesses of digital behemoths, they’ve never figured out how to rein in those excesses. Granting consumers some rights over their own data — a Consumer Data Bill of Rights — would be a populist political issue, for either Republicans or Democrats or both. But, I digress.

I think there’s a way for us to reclaim our reading choices, and I’ll call it the News Dial-o-Matic, achievable with today’s technology.

While Personal.com gives us 121 “gem” lockers — from “Address” to “Women’s Shoes”, with data lockers for golf scores, beer lists, books, house sitters, and lock combinations along the way, we want to focus on news. News, after all, is the currency of democracy. What we read, what she reads, what they read, what I read all matter. We know we have more choice than any generation in history. In this age of plenty, how do we harness it for our own good?

Let’s make it easy, and let’s use technology to solve the problem technology has created. Let’s think of three simple news reading controls that could right the balance of choice, the social whirl and technology. We can even imagine them as three dials, nicely circular ones, that we can adjust with a flick of the finger or of the mouse, changing them at our whim, or time of day.

The three dials control the three converging factors that we’d like to to determine our news diet.

Dial #1: My Sources

This is the traditional title-by-title source list, deciding which titles from global news media to local blogs I want in my news flow.

Dial #2: My Networks

Social curation is one of the coolest ideas to come along. Why should I have to rely only on myself to find what I like (within or in addition to My Sources) when lots of people like me are seeking similar content? My Facebook friends, though, will give me a very different take than those I follow on Twitter. My Gmail contact list would provide another view entirely. In fact, as Google Circles has philosophized, “You share different things with different people. But sharing the right stuff with the right people shouldn’t be a hassle.” The My Networks dial lets me tune my reading of different topics by different social groups. In addition, today’s announced NewsRight — the AP News Registry spin-off intended to market actionable intelligence about news reading in the U.S. — could even play a role here.

Dial #3: The Borg

The all-knowing, ever-smarter algorithm isn’t going away — and we don’t want it to. We just want to control it — dial it down sometimes. I like thinking of it in sci-fi terms, and The Borg from “Star Trek” well illustrates its potential maniacal drive. (I love the Wikipedia Borg definition: “The Borg manifest as cybernetically-enhanced humanoid drones of multiple species, organized as an interconnected collective, the decisions of which are made by a hive mind, linked by subspace radio frequencies. The Borg inhabit a vast region of space in the Delta Quadrant of the galaxy, possessing millions of vessels and having conquered thousands of systems. They operate solely toward the fulfilling of one purpose: to “add the biological and technological distinctiveness of other species to [their] own” in pursuit of their view of perfection“.) The Borg knows more about our habits than we’d like and we can use it well, but let’s have us be the ones doing the dialing up and down.

Three simple round dials. They could harness the power of our minds, our relationships, and our technologies. They could utilize the smarts of human gatekeepers and of algorithmic ones. And they would return power to where it belongs, to us.

Where are the dials? Who powers them? Facebook, the new home page of our time, would love to, but so would Google, Amazon, and Apple, among a legion of others. Personal.com would love to be that center, as it would any major news site (The New York Times, Zite-powered CNN, Yahoo News). We’ll leave that question to the marketplace.

Lastly, what are the newsonomics of the News Dial-o-Matic? As we perfect what we want to read, the data capturing it becomes even more valuable to anyone wanting to sell us stuff. Whether that gets monetized by us directly (through the emerging Personals of the world), or a mix of publishers, aggregators, or ad networks would be a next battleground. And then: What about the fourth wheel, as we dial up and down what we’re in the marketplace to buy right now? Wouldn’t that be worth a tidy sum?

December 19 2011

15:15

FTC Fines Santa Claus Over COPPA Violations

WASHINGTON–Federal Trade Commission Chairman Jon Leibowitz today announced a record fine against Santa Claus for violations of the Children’s Online Privacy Protection Act.

“Mr. Claus has flagrantly violated children’s privacy, collecting their consumer preferences for toys and also tracking their behavior so as to judge and maintain a data base of naughtiness and niceness,” Leibowitz said. “Worse, he has tied this data to personally identifiable information, including any child’s name, address, and age. He has solicited this information online, in some cases passing data to third parties so they may fulfill children’s wishes. According to unconfirmed reports, he has gone so far as to invade children’s homes in the dead of night. He has done this on a broad scale, unchallenged by government authorities for too long.”

Claus was fined $2 million and ordered to end any contact with children. Prior COPPA fines include $1 million against now-virtually-unknown social site Xanga, $400,000 against UMG Recordings, and $35,000 against notorious toymaker Etch-a-Sketch.

The FTC action follows similar complaints against Claus brought by European privacy authorities. European Commission Vice-President Viviane Reding has complained about Claus holding data on children outside of EU data-protection standards in North Pole server farms. German head of consumer protection Ilse Aigner has called for an investigation of Claus’ use of Google Street View in navigating his Christmas Eve visits. German Federal Commissioner for Data Protection and Freedom of Information Peter Schaar has demanded that Claus give children, naughty or nice, the right to be forgotten in his data base. And Thilo Weichert, head of the privacy protection office in the German state of Schleswig-Holstein, demanded that German web sites take down any Facebook “Like” button referring to Claus.

Meanwhile, Canadian Privacy Commissioner Jennifer Stoddart has attempted to bring together an international coalition of privacy officers opposed to Claus’ practices. In California, Claus has been threatened with severe penalties for nonpayment of the state sales tax. And the UK has vowed that Claus will be detained and could face extradition should he set foot in any English chimneys on Christmas Eve.

Reaction to the FTC decision was mixed in Washington. Republican presidential candidate Rick Perry vowed to kill the Federal Trade Commission, relieved that he had finally recalled the final agency he had marked for death. Rival Newt Gingrich suggested that Claus apply for U.S. citizenship, “having contributed much to U.S. industry by stimulating greed at all ages; we need more Clauses and more spending to fix this Democrat-ruined economy.” Ron Paul suggested that Claus set up a Liberatarian nation at the North Pole and offered to run for office there. Herman Cain, whose candidacy remains on hold after allegations of sexual improprieties, said that he “always wondered why the old coot didn’t get in hot water for plopping kiddies on his lap; seemed a lot creepier than anything I ever did.” President Barack Obama refused comment.

From his North Pole headquarters, Claus said through a spokesman that he endeavored only to fulfill children’s dreams. “I regret that the world has come to this: treating any adult who wants to make a child happy as a dangerous stranger,” he said. “The problem with our modern world is not technology but fear, suspicion, and cynicism.” He vowed to continue his Christmas mission of joy. “What’s the worst they can do to me?” he asked, “cookie me?”

Contact: Elfelman Public Relations
Photo via Dreadcentral

November 11 2011

17:50

July 25 2011

05:28

Google faces fresh fire over web reviews

For a search giant with the business goal to "organize the world's information" it takes little to enter markets where information is sold. Financial Times refers to the recent developments in the market for customer reviews. Google's market power alone would be sufficient to change these markets entirely. 

[Google.com | About:] Google’s mission is to organize the world‘s information and make it universally accessible and useful.

Financial Times :: FT reports that Google is facing fresh protests following its decision last week to stop copying some types of information from other websites for use in its own, rival services. The reversal is the first indication of Google changing its business practices since the US Federal Trade Commission launched a broad anti-trust investigation into the company last month. A similar review was begun in Europe last year.

Continue to read Richard Waters, www.ft.com

July 01 2011

21:27

Politics and business as usual - Google hires 12 new lobbying firms

Politico :: Google’s new lobbyists will push back against antitrust affronts. - A federal probe of Google’s search industry dominance has the company mobilizing in Washington: It announced Friday it would hire 12 new lobbying firms in a move that will grow its Beltway footprint, influence and balance sheet. It will likely be a mix of new, outside Democratic and Republican pickups taking Google’s message to Congress, the FTC and beyond.

Via ssommerhalter

Continue to read Tony Romm, www.politico.com

21:14

US antitrust laws - Twitter investigated over dealings with apps firms including UberMedia

Guardian :: Twitter is being investigated by US regulators over its dealings with third-party companies including UberMedia, the firm behind popular BlackBerry and iPhone apps. The Federal Trade Commission, or FTC, is investigation whether Twitter's business relationships with other companies comply with US antitrust laws.

Continue to read Josh Halliday, www.guardian.co.uk

May 28 2011

19:13

FTC: how should original guidelines on online advertising disclosures be updated?

Wall Street Journal :: The Federal Trade Commission has begun soliciting public comment on how it should revise more than decade-old guidelines that translate federal advertising laws to the Internet, as the agency moves to more aggressively police digital ads.

The agency said on a notice on its website Thursday that groups have until July 11 to send suggestions on how its original guidelines on online advertising disclosures should be updated to address new technologies, such as those used to target ads to users’ interests and mobile advertising.

Continue to read Emily Steel, blogs.wsj.com

February 10 2011

19:40

5Across: Online Privacy and the 'Do Not Track' Debate



MP_internetprivacy_small.jpg

The debate around online privacy has largely centered around advertising that is targeted at people depending on where they have been online. While somewhat creepy, those ads are perhaps the least of our worries. What many of us don't realize is that there are multiple parties tracking our moves online, some harmless and some possibly nefarious.

In fact, one of our MediaShift readers pointed out that PBS.org itself has at least seven trackers on its site:

I found that on the PBS.org site there are 7 trackers active, they are AddtoAny, Comscore Beacon, Disqus, DoubleClick, Foresee, Google AdSense, and Google Analytics...I found these because I use a Firefox add-on called 'Ghostery' that blocks trackers.

While the FTC considers a "Do Not Track" database, and Rep. Jackie Speier (D-Calif.) plans to introduce a "Do Not Track Me Online 2011" bill tomorrow in Congress, the debate about who can track us where online is heating up. The idea for such a database would be that consumers could opt-out in one simple way from all tracking online, similar to the "Do Not Call" database for telemarketers. But online, things aren't so simple. Some tracking is for analytics, some is to help tailor a site to your preferences, and some to target ads. We convened a group of privacy experts, journalists and publishers to discuss -- and debate -- the limits to what companies and government could track about us online. Check it out!

5Across: Online Privacy

onprivacy.mp4

>>> Subscribe to 5Across video podcast <<<

>>> Subscribe to 5Across via iTunes <<<

Guest Biographies

Ryan Calo runs the Consumer Privacy Project at the Stanford Center for Internet and Society. A graduate of Dartmouth College and Michigan Law School, Calo clerked on the U.S. Court of Appeals for the Sixth Circuit and practiced privacy and telecommunications law at Covington & Burling LLP before joining Stanford Law School in 2008. Calo works on the intersection of law and technology, including privacy and robotics. His work been covered by the New York Times, Wall Street Journal, and other major news outlets.

Declan McCullagh is the chief political correspondent for CNET and runs the Privacy Inc. blog there. Previously he was a senior correspondent for CBS News' website and Washington bureau chief for Wired. He is a private pilot and lives on the San Francisco peninsula with his wife and 15-month old son.

Joanne McNabb is chief of the California Office of Privacy Protection, and is a Certified Information Privacy Professional and co-chair of the International Association of Privacy Professionals' Government Working Group. She serves on the Privacy Advisory Committee to the U.S. Department of Homeland Security and is a Fellow of the Ponemon Institute. Before starting the Office of Privacy Protection, McNabb worked in public affairs and marketing, in both the public and private sectors, including five years with an international marketing company in France. She attended Occidental College and holds a master's degree in Medieval Literature from the University of California, Davis.

Lee Tien is a senior staff attorney at the Electronic Frontier Foundation, a non-profit public interest group focusing on online civil liberties. He went to college at Stanford and law school at UC-Berkeley. He works on a wide range of privacy and security issues including electronic surveillance, cybersecurity, online tracking, national ID systems, location tracking, electronic health records, and the smart energy grid.

Anne Toth is the Chief Trust Officer for Yahoo, where she has managed a wide array of policy issues related to privacy, community, user-generated content, child safety, advertising standards, online accessibility, mobile products, and consumer direct marketing. Toth has been active in leading industry trade association efforts around interest-based advertising, serves on the board of directors of the Network Advertising Initiative and Future of Privacy Forum Advisory Board. She has testified before Congress in DC and the Article 29 Working Party in Brussels on matters related to online privacy. Prior to joining Yahoo, Toth was a research economist at the Fremont Group, a San Francisco-based private investment company affiliated with Bechtel.

If you'd prefer to watch sections of the show rather than the entire show, I've broken them down by topic below.

Where's the Harm?

The 'Do Not Track' Debate

Big Brother is Watching

Differing Takes on Privacy

Free Speech vs. Privacy

Credits

Mark Glaser, executive producer and host
Corbin Hiar, research assistant

Charlotte Buchen, camera

Serene Fang, audio

Location: Vega Project & Kennerly Architecture office space in San Francisco

Special thanks to: PBS and the Knight Foundation

Music by AJ the DJ

*****

What do you think? Do you like the idea of a "Do Not Track" database? How much do you worry about your privacy while going online? Share your thoughts in the comments below.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

This is a summary. Visit our site for the full post ».

February 07 2011

19:12

Special Series: Online Privacy

"All the world's a stage," and even moreso with the rise of the Internet, online advertising and social networking. While there is no American "right to privacy" in the Constitution, there are limits to what we want companies, publishers and advertisers to do with our personal information. Do we want advertisers to serve ads based on our web surfing habits? Should we be able to opt out from that kind of tracking? How would that work? The U.S. government -- including the FTC, Commerce Department and Congress -- is considering more regulation, while the industry tries self-regulation...again. While MediaShift gave a nice guide to online privacy a couple years back, the time is right to give an in-depth look at online privacy in the age of the always-on social web.

All the Online Privacy Posts

> Will U.S. Government Crack the Whip on Online Privacy? by Jonathan Peters

Coming Soon

> Facebook privacy issue timeline by Corbin Hiar

> A lively 5Across roundtable discussion with Yahoo's Anne Toth, EFF's Lee Tien, California Office of Privacy Protection's Joanne McNabb, CNET's Declan McCullagh and Stanford's Ryan Calo. Hosted by Mark Glaser.

> Privacy issues around advertising and marketing by Mya Frazier

> How can publishers protect data of users? by Dorian Benkoil

*****

What do you think about our series? Did we miss anything? Share your thoughts on how you protect your privacy online and whether you think there should be more laws to protect your privacy.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

This is a summary. Visit our site for the full post ».

18:49

Will U.S. Government Crack the Whip on Online Privacy?

This week MediaShift will be running an in-depth special report on Online Privacy, including a timeline of Facebook privacy issues, a look at how political campaigns retain data, and a 5Across video discussion. Stay tuned all week for more stories on privacy issues.

MP_internetprivacy_small.jpg

Online privacy is the new openness.

After years of telling all on the Internet, of tweeting about armpit rashes and tantric sex, we may have gone too far, shared too much. We may have lost control of the information that we reveal about ourselves and of the way others use that information. Which is a bad thing.

That's the thinking, at least, behind two government reports released at the end of 2010. The first one, produced by the Federal Trade Commission (FTC), outlines a plan to regulate the "commercial use of consumer data." The second one, produced by the Commerce Department, recommends that the federal government "articulate certain core privacy principles" for the Internet. Together they show that online privacy is very much on the public agenda.

FTC ENDORSES "DO NOT TRACK"

The FTC report, titled Protecting Consumer Privacy in an Era of Rapid Change, begins by noting that "consumer information is more important than ever" and that "some companies appear to treat it in an irresponsible or even reckless manner." It says data about consumer online activity and browsing habits are "collected, analyzed, combined, used, and shared, often instantaneously and invisibly."

google optout.JPGFor example, if I browse online for a product, which I often do, then advertisers could collect and share information about me, including my search history, the websites I visit and the kind of content I view. Likewise, if I participate in a social networking site, which I do, then third-party applications could access the stuff I post on my profile. Today my only lines of defense would be to adjust the privacy controls on my browser, to download a plug-in, or to click the opt-out icon that sometimes appears near an ad.

That's not good enough, according to the FTC report, which is intended to be a roadmap for lawmakers and companies as they develop policies and practices to protect consumer privacy. To that end, the FTC made three proposals.

First, companies should build "privacy protections into their everyday business practices." More specifically, they should provide "reasonable security for consumer data," they should collect "only the data needed for a specific business purpose," they should retain "data only as long as necessary to fulfill that purpose," they should safely "dispose of data no longer being used," and they should create "reasonable procedures to promote data accuracy." In addition, they should implement "procedurally sound privacy practices throughout their organizations."

Although it's unclear what would constitute a "specific business purpose," those suggestions to a great degree reflect existing law. Section 5 of the FTC Act, which prohibits unfair or deceptive practices, can be used to nail companies that fail to secure consumer information. Similarly, the Gramm-Leach-Bliley Act requires financial institutions to take certain steps to secure their information, and the Fair Credit Reporting Act requires consumer agencies to ensure that the entities receiving their information have a permissible reason to receive it. The latter also imposes "safe disposal" obligations on those entities.

Second, companies should "provide choices to consumers about their data practices in a simpler, more streamlined way." This would allow consumers in some transactions to choose the kind and amount of information they reveal about themselves. I say "in some transactions" because companies would have to distinguish between "commonly accepted data practices" and those "of greater concern."

The former includes ordinary transactions in which consumer consent is implied, e.g., I buy a book through Amazon, and I give the company my shipping address. No big deal, says the FTC. The latter, however, includes activities and transactions in which consent is not implied, e.g., an online publisher allows a third party to collect data about my use of the publisher's website. Big deal, says the FTC.

consumers_choice.jpgWhere consent is not implied, consumers "should be able to make informed and meaningful choices," and those choices should be "clearly and concisely described." In the context of online advertising, that means I would be able to choose whether to allow websites to collect and share information about me. The most practical way to give me that choice, according to the FTC, is to place a persistent setting on my browser to signal whether I consent to be tracked and to receive targeted ads. This "do not track" mechanism could give consumers the type of control online that they have offline with the "do not call" list for telemarketers.

Third, companies should "make their data practices more transparent to consumers." They should ensure that their privacy policies are "clear, concise and easy-to-read," and in some circumstances they should allow consumers to check out the data kept about them. Those circumstances remain unclear, but the report says if a company maintains consumer data that are used for decision-making purposes, then it could be required to allow consumers to review that data, essentially to give them the chance to correct any errors.

It's a good thing for the FTC to encourage companies to revisit their privacy policies. Most of them are long and dense and monuments to legalese, and some companies seem to notify me every week about changes to their terms and conditions. Nowhere is their ineffectiveness more apparent than in the world of mobile devices, which often spread privacy policies across dozens of screens, 50 words at a time. On the Internet, meanwhile, it would take consumers hundreds of hours [PDF file] to read the privacy policies they typically encounter in one year. That's hardly helpful to the consumer.

All in all, the FTC report has received mixed reviews. Some say its recommendations won't stop the information free-for-all, while others say it's promising and a step in the right direction. In any case, the commission will need the help of Congress to implement the plan, and that help isn't a sure thing.

COMMERCE DEPT. CALLS FOR PRIVACY CODES

The Commerce Department report, very sexily titled Commercial Data Privacy and Innovation in the Internet Economy: A Dynamic Policy Framework [PDF file], begins by noting that consumer privacy must address "a continuum of risks," such as minor nuisances and unfair surprises, as well as the disclosure of sensitive information in violation of individual rights. The report's purpose is to stimulate discussion among policymakers, and it includes recommendations in four areas.

First, the government should "revitalize" the FTC's Fair Information Practice Principles, a code that addresses how organizations collect and use personal information and the reasonableness of those practices. The amended code should "emphasize substantive privacy protection rather than simply creating procedural hurdles." The specifics are similar to those in the first section of the FTC report: the code should call on companies to be more transparent, it should articulate clear purposes for data collection, it should limit the use of data to those purposes, and it should encourage company audits to enhance accountability.

Screenshot-code.pngSecond, the government should "enlist the expertise and knowledge of the private sector" to develop voluntary codes for specific industries that promote the safeguarding of personal information. To make that happen, the Commerce Department should create a Privacy Policy Office to bring the necessary stakeholders together, and the FTC would enforce the codes once they've been voluntarily adopted.

Well, this makes me think of the old saw that socialism is good in theory but doesn't work. Whether or not that's true, too often the same can be said (truthfully) of voluntary codes. To make this scheme work, at the very least, the FTC should be given rulemaking authority to develop binding codes in the event the private sector doesn't act. Alternatively, as the report suggests, the FTC could ramp up its enforcement of existing privacy laws, to encourage companies to buy in to the voluntary codes, on the theory that the buy-in would entitle them to a legal safe harbor. In other words, complying with a voluntary code would create a presumption of compliance with any privacy legislation based on the amended Fair Information Practice Principles.

Third, the government should be mindful of its global status as a leader in privacy policy. On the one hand, it should develop a regulatory framework for Internet privacy that "enhances trust and encourages innovation," and on the other hand, it should work with the European Union and other trading partners to bridge the differences, in form and substance, between their laws and U.S. law. As the report notes, although privacy laws vary from country to country, many of them are based on similar values.

Fourth, Congress should pass a law to standardize the notification that companies are required to give consumers when data-security breaches occur. Lawmakers also should address "how to reconcile inconsistent state laws," because the differences among them have created undue costs for businesses and have made it more difficult for consumers to understand how their information is protected throughout the country.

In the privacy world my sympathies are chiefly with the consumer, but the patchwork of state security breach notification (SBN) laws is a very real challenge for businesses. Not long ago, I worked with a company that had offices in a number of states, and as a result, it had to comply with a number of different state SBN laws. They were variations on the same theme, of course, but the differences had to be accommodated. The devil was in the details, and from that work it became obvious to me that the compliance costs were high and the benefits low: Some people get better notification than others. That's neither fair for the consumers nor ideal for the company.

The reaction to the Commerce Department report, like the one to the FTC report, has been mixed. Privacy advocates have been critical of it, especially the sections that support self-regulation, but other groups and government officials have commended the Department for taking on a tough issue. For its part, the Department said it plans to incorporate the feedback into its final report, to be released later this year.

NEW COMMITTEE TO CARRY THE PRIVACY FLAG

It's also worth mentioning that in late October, the National Science and Technology Council launched a Subcommittee on Privacy and Internet Policy. Chaired by Cameron Kerry, general counsel of the Commerce Department, and Christopher Schroeder, assistant U.S. attorney general, the subcommittee's job is to monitor global privacy-policy challenges and to address how to meet those challenges.

The charter [PDF file] says the subcommittee will do three things: 1) it will produce a white paper on information privacy in the digital age, building on the work of the FTC and the Commerce Department; 2) it will develop a set of general principles that define a regulatory framework for Internet privacy, one that would apply in the U.S. and globally; and 3) it will coordinate White House statements on privacy and Internet policy, striking a balance between the expectations of consumers and the needs of industry and law enforcement.

LOOKING AHEAD

Online privacy is on the government's brain, no doubt, but it's hard to say what effect, if any, the reports will have. They strike a chord with privacy advocates concerned about the way companies use the information that consumers reveal about themselves. They show sensitivity to the needs of both consumers and businesses. And they don't contain, possibly with the exception of the "do not track" mechanism, any kind of poison pill that would make the reports in their entirety look undesirable to major stakeholders.

Still, many companies already do what the reports recommend, and many of the recommendations to a great degree reflect existing law. So it's fair to wonder how much would change even if lawmakers used the reports to draft legislation. Lots of macro-micro questions remain unanswered, too.

Would all types of businesses be subject to the new framework? What about one that collects only non-sensitive consumer data? How long would businesses be required to retain consumer data? Is there a principled way to come up with a time period? Should companies be allowed to charge a fee to consumers for them to access information that the company maintains about them? If so, how much?

That's just a small sample of the questions that the FTC and Commerce Department need to answer before moving ahead, and they've requested help from interested parties. Readers should feel free to weigh in by contacting the agencies directly; otherwise, drop a comment in the box below.

Jonathan Peters is a lawyer and the Frank Martin Fellow at the Missouri School of Journalism, where he's working on his Ph.D. and specializing in the First Amendment. An award-winning freelancer, he has written on legal issues for a variety of newspapers and magazines. He can be reached at jonathan.w.peters@gmail.com.

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December 09 2010

17:00

The Newsonomics of Do Not Track

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

Just in time for Christmas, we have cookie madness. No, not the sugared kind — the tracking kind. With pugnacious FTC Chair Jon Leibowitz taking on yet another big topic (saving media, net neutrality), we’re talking about tracking technologies — what’s fair, what’s legal, and what’s right.

On Dec. 1, Leibowitz put forward a 122-page Do Not Track proposal, officially inviting public comment due Jan. 31. Industry groups of many kinds, including the Online Publishers Association, are busily preparing responses. It’s unclear, as often the case with things digital, where the FTC jurisdiction ends and where Congress’ assent is required. There will be all kinds of twists and turns in the politics of Do Not Track (where, for instance, will the Tea Partiers stand, pro-unfettered individual liberty or anti-government regulation?), but when the dust settles, expect the following:

  • It’ll be easier for consumers to opt out of being tracked. That may be a simple one-click cookie, or something still a little complicated, but considerably easier than the multi-step approach required today. (I asked a group at NewsFoo, a tech-savvy bunch, how many knew how to turn off tracking. Only five out of 40 raised their hands.)
  • The advertising industry will seek to find new ways to further target, no matter what new hurdles are put in front them.

This isn’t an abstract debate about consumer rights or Big Brother. It’s a debate that could have profound implications for news media. If rules are re-written, we could see a re-balancing of power among news media, advertisers, ad agencies, and the ad networks. Therein may lie billions of dollars in ad spending — and revenue splits — in the years ahead.

If you attend an digital ad conference or talk to leaders in the industry, you’ll see the same PowerPoint (or Keynote): The perfection of commerce is coming soon. Ad-targeting technologies are getting smarter each day, creating better analytics about…us, collectively and individually. The coming perfection: I only get the kinds of commercial messages that make sense to deliver to me, based on all the known info about me, my reading patterns, and shopping habits. Sure, some mass branding — Coke in both Times Square and Tokyo’s Shibuya Crossing — will always be valuable. Most advertising messages, though, will be targeted. Targeted advertising is more effective, cheaper to deliver, and cuts out waste.

In that paradigm, media isn’t an enemy, exactly. It’s just friction. Media that helped deliver audiences for many decades now is a kind of friction. In the last several years, particularly, old media brands have eschewed ad networks as much as they thought they could, selling “premium” inventory. That means leveraging the authority of the news brand and its association with the deep pockets of affluent readers. We’ve seen some success there, but have to wonder how long it might last as targeting technologies get better and better. Why deal with the friction of separate media buys, if you can cherry-pick the audiences you want wherever they may be at the moment?

In classic web theory, it’s disintermediation: The connection between media and consumers is dissolving, with marketers able to reach end users more directly.

Enter a new age of Do Not Track. Maybe, in that world, news media’s role — and its engagement with audiences — becomes much more valuable. Maybe, it’s a reintermediation of a kind, as news media’s role in the shopping/buying lives of its readers re-emerges, digitally.

How might this happen? If we look at the potential newsonomics of Do Not Track, we can see at least two ways that real revenue can be driven out of the reordering of the tracking world.

First, the FTC proposal treats first-party tracking differently than third-party tracking. First-party tracking means that media, or really any company, tracks the behavior of its customers, those who have chosen to have a relationship with the brand. First-party tracking would allow online publishers to use analytics, drawn from web usage and registration data, to better target content for readers and viewers. And first-party tracking should allow some ad targeting of readers by a publisher on its own site — though that question will get muddier, depending on how Do Not Track actually works.

If publishers — especially big publishers, with the scale of audience of the Times, the Journal, Reuters, and portals — can help advertisers target consumers, then their audiences may become relatively more valuable, and advertising messaging higher priced. The “relative” here is relative to what advertisers can do off big brand sites. If Do Not Track constrains that in a significant way, that big news brands can offer relatively better targeting. That means a $10 CPM ad may be instead sold for $16, for instance, and the value of targeting can add up to tens of millions for each company annually. For a U.S. online ad industry now galloping to 17 percent 3Q growth (and expected similar growth next year) to a $25.8 billion expected 2010 final number, that targeting advantage could mean billions.

Second, publishers might further monetize the voluminous data they are harvesting. They could sell it. Data, media have come to understand, isn’t exhaust — it’s gold, if properly mined, and deeply valuable to advertisers and agencies.

Krux Digital, which works with publishers to track data usage, recently put out a report saying that “data skimming” by third-party networks was costing “premium publishers” $850 million a year. In other words, networks were placing cookies on publisher sites, alighting with lots of data that they then used to target other advertising. The number could be high (Krux has an interest in a high number; the higher the number, the more apparent need for its services), but there’s significant money left under some table, largely unbeknownst to publishers. If Do Not Track puts more power back into the hands of the publisher, then publishers may be help to re-sell the information — and that could help build toward the new business model news publishers’ need.

The FTC, of course, isn’t setting out to provide publishers with a new revenue stream. It’s trying to protect consumers.

Consequently, in industry responses to the FTC, OPA and other news industry groups have to be smart. They have to not only give lip service to being pro-consumer. They have to talk about how they can be pro-consumer, and much more transparent about how they use consumer data. They can proudly talk about delivering better news products. They can talk about improving the researching/shopping/buying experience. They can get beyond what some note as the “creepiness factor” of tracking, by offering up fundamental rules about how they’d be clear with their readers and viewers about what is being shared, what’s not and about consumer choices. They could also offer consumers incentives to share info.

They can re-establish, and reinforce, new stronger relationships with readers, in perfect synchronicity with the efforts of some to charge for digital news content.

The big opportunity, perhaps, is the ability of news publishers to transparently offer reader/consumers the opportunity to “opt in” to a wider world of reading and shopping targeting. Then, they could re-emerge, in the tablet era no less, as community and national centers of news — and commerce. Forget Foursquare; readers could check into their favorite news companies.

Track photo by HKmPUA used under a Creative Commons license.

July 21 2010

03:20

Google takes the FTC to school

Google just issued a response to the Federal Trade commission’s staff discussion draft on potential recommendations to support the reinvention [read: preservation] of journalism [read: newspapers]. (here was my reaction). It’s a wonderful document that takes the FTC — and the news industry — to school on the First Amendment, copyright, fair use, antitrust, media history, business, and technology. The government and publishers should be embarrassed to need such remedial education.

Highlights:

This says it best:

The large profit margins newspapers enjoyed in the past were built on an artificial scarcity: Limited choice for advertisers as well as readers. With the Internet, that scarcity has been taken away and replaced by abundance. No policy proposal will be able to restore newspaper revenues to what they were before the emergence of online news. It is not a question of analog dollars versus digital dimes, but rather a realistic assessment of how to make money in a world of abundant competitors and consumer choice.

Google’s doc leads off with promotion of its efforts to work with news organizations: Living Stories, traffic sent to news sites, technology help, and so on. They might as well just have linked to James Fallows’ paean and Eric Schmidt’s Wall Street Journal op-ed. You’ve heard these points before. My problem with them, as I’ve said, is that Google is trying to make friends with an industry that only wants enemies to blame for its failures. But at last, Google stops pulling punches and slaps down the industry’s self-deluding myths and the FTC’s dangerous ideas.

“[T]he current challenges faced by the news industry are business problems, not legal problems,” Google says,”and can only be addressed effectively with business solutions. Regulatory proposals that undermine the functioning of healthy marketplaces and stall the pace of change are not the solution.”

Google points out that newspapers’ circulation peaked between 1890 and 1920; that newspapers declared radio would kill them and only newspapers should hold the sacred and hallowed mission of news; that newspapers declared TV would kill them and characterized broadcast reporters as “parasites” (a lovely tip of the hat to Rupert Murdoch). We won’t buy that again. “The internet, rather than being the cause of journalism‘s downfall, provides a unique opportunity for news organizations to renew and reinvigorate journalism,” Google says.

Google lectures the FTC and the industry on internet business basics: “Unfortunately, the Discussion Draft does not acknowledge the basic economics of search engines and similar services and instead erroneously suggests that search engines are somehow cannibalizing newspaper advertising revenue rather than serving as an important connection to potential consumers.” Aggregators, Google points out earlier, send traffic and business opportunities to publishers. And Google does not make a significant amount of revenue from news … just as newspapers do not (subsidizing it with more lucrative verticals).

Google lectures the FTC et al on the unbundling of news. Fact o’ life. It then offers a primer on how publishers should be treating the readers who come to them via links.

Google restates the FTC’s dissection of newspaper revenue: 80% advertising, 17% newsstand, 3% subscriptions. “Pay walls,” it says, “could be an effective way to raise the 3% revenue figure.” A zinger for publishers. But Google’s fine with pay walls if publishers want them. It’s just not fine with government regulating them. “Innovating to create products and services that consumers want to pay for,” Google says, “is the only way to guarantee long-term subscription revenue growth, and none of the policy proposals are designed to foster that kind of innovation.” A zinger for the FTC (one I wish Google had dwelled on more since it does know innovation.)

Another zinger to the industry and the FTC comes as Google points out that classified revenue implosion had “nothing to do with copying or free-riding and everything to do with the emergence of a new, more effective and more efficient product into the marketplace. The FTC would ordinarily regard such a situation as a cause for celebration – consumers are getting a better product at a lower price – not an opportunity to slow down that innovation through regulation.”

Google salutes the flag the FTC raised on making government information more accessible — but then Google went the extra step to suggest “harmonization of state and federal law relating to copyrightability of government information.” There, the agreement ends.

Google decries proposals to extend copyright law and limit fair use and repeats its fine arguments against the antiquated notion of hot news from its FlyOnTheWall brief. “Facts, hot or cold, cannot be protected by copyright since there is no author of them,” Google instructs the FTC. “This has been the law of copyright since its inception….”

Google goes after proposals to establish taxes and fees to support legacy news operations. And it attacks efforts to let news organizations fix prices and charge aggregators. The doc makes the FTC eat its own words: “The FTC‘s long-standing position regarding antitrust exemptions properly subordinates a desire to advantage individual firms (here, print news organizations) to the need for a competitive, even playing field that offers the maximum good to consumers.”

Bottom line: There’s no need for the FTC’s meddling:

….Google continues to work with publishers to find ways to ensure that journalism survives and thrives on the Web. We remain optimistic about the future of journalism: The Fourth Estate is too crucial a part of a functioning democracy, and the Internet too powerful a medium, for journalism to die in transition to a Web-first approach. News organizations have more readers than ever, more sources of information than ever, more ways to report and tell stories than ever, and more potential ways to generate revenue than ever. Journalism will change, but the free market and free society will ensure that it won‘t die.

Amen and good night.

Comments to FTC 20 July 2010

Related: Here’s a segment of On the Media this week with me lambasting the FTC:

June 14 2010

10:02

NYTimes.com: FTC’s journalism study could ’sidestep’ making recommendations

The New York Times updates its readers on the US Federal Trade Commission’s public forums on journalism and how to save it, the last of which will take place this week.

The commission is expected to produce a final study later in the year, but the New York Times report also warns: “the commission could easily sidestep making any recommendations to Congress or invoking its regulatory powers, and instead issue something along the lines of an analysis of its findings”.

Full story at this link…

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June 03 2010

21:31

May 29 2010

16:10

FTC protects journalism’s past

The Federal Trade Commission has been nosing around how to save journalism and in its just-posted “staff discussion draft” on “potential policy recommendations to support the reinvention of journalism,” it makes its bias clear: The FTC defines journalism as what newspapers do and aligns itself with protecting the old power structure of media.

If the FTC truly wanted to reinvent journalism, the agency would instead align itself with journalism’s disruptors. But there’s none of that here. The clearest evidence: the word “blog” is used but once in 35 pages of text and then only parenthetically as an example of buying ads on topical sites (“e.g., a soccer blog…”); otherwise, it’s only a footnote. The only mention of investing in technology — the agent of disruption — comes on the 35th page (suggesting R&D for tools such as “improved electronic note-taking”). There’s not a hint of seeing a new ecosystem of news emerge – the ecosystem we study and support at CUNY — except as the entry of nonprofit entities that, by their existence, give up on the hope the market will sustain news.

If the FTC truly wanted to rethink journalism and its new opportunities and new value in our democracy, it would have written this document from the perspective of the people it is supposed to represent: the citizens, examining how we can benefit from news that is newly opened to the opportunity of collaboration and greater relevance. Instead, the document is written wholly from the perspective of the companies and institutions of the industry.

The document, like good government work, does a superb job of trying very hard to say very little. From its hearings and research, the staff outlines proposals I find frightening, but many of them as politically absurd as they are impossible — e.g., what I’ll dub the iPad tax to put a 5% surcharge on consumer electronics to raise $4 billion for public funding of news — and the document doesn’t endorse them.

Still, it’s the document’s perspective that I find essentially corrupt: one old power structure circling its wagons around another. Change? That’s something to be resisted or thwarted, not embraced and enabled. The FTC’s mission in this administration of change — its justification for holding these hearings and doing this work — is to foster competition. Well, the internet is creating new competition in news for the first time since 1950 and the introduction of TV. But the commission focuses solely on newspapers, apologizing that it ignores broadcast — but not even apologizing for ignoring the new ecosystem of news that blogs and technology represent.

“This document will use the perspective of newspapers to exemplify the issues facing journalism as a whole,” the FTC says. And later: “[N]ewspapers have not yet found a new, sustainable business model, and there is reason for concern that such a business model may not emerge. Therefore, it is not too soon to start considering policiies that might encourage innovations to help support journalism into the future.” That is, to support newspapers’ survival. There’s the problem.

Among the ideas the FTC presents:

* “Additional intellectual property rights to support claims against news aggregators.” The document even takes on the language of Rupert Murdoch and company describing aggregators as “parasitic.” It espouses their perspective, that search engines and aggregators “use” content when, from my perspective, such use promotes and adds value to that content (and we’ll soon see how Murdoch’s properties do without it). The FTC doesn’t broach the concept of the link economy and the value and distribution created by aggregators — not to mention (and they don’t) that created by recommendations from readers via Twitter and Facebook (neither word appears).

The FTC looks at extending copyright and corralling fair use and also outlines the dangers, ending up with no recommendation, thank goodness. It also looks at proposals to extend the “hot news” doctrine of a 1918 court case by the Associated Press but doesn’t begin to grapple with the definition of hot (Tom Glocer of Reuters says his news has its highest value in its first three miliseconds) and it does acknowledge that news organizations “routinely borrow from each other.” Rip ‘n’ read, it’s called.

What disturbs me most in this section is that the FTC frets about “difficult line-drawing being proprietary facts and those in the public domain.” Proprietary facts? Is it starting down a road of trying to enable someone to own a fact the way the patent office lets someone own a method or our DNA? Good God, that’s dangerous.

* Antitrust exemptions. The FTC looks at allowing news organizations to collude to set prices to consumers and with aggregators. Isn’t that the precise opposite of what an agency charged with protecting competition for the benefit of customers should be considering? Shouldn’t the FTC recoil in horror at such sanctioned antitrust to protect incumbents’ price advantages? Not here.

* Government subsidies. After saluting the history of government subsidies for the press — namely, postal discounts, legal notice publication, assorted tax breaks, and funds for public broadcasting — the agency looks at other ideas: a journalism AmeriCorps paying journalists; increased funding for public broadcasting; a national fund for local news suggested in Columbia’s report on journalism; a tax credit for employing journalists; citizen news vouchers (a la campaign checkoff); grants to universities for reporting. It also looks at increasing the present postal subsidy (which would only further bankrupt the dying postal service in the service of dying publications); using Voice of America and Radio Free Europe content (aka propaganda) in the U.S.; and enabling the SBA to help nonprofits.

* Taxes. At least the FTC acknowledges that somebody’d have to pay for all this. In one section, the FTC looks at licensing the news: having ISPs levy a fee on us that the government then dolls out to its selected news purveyors — call that the internet tax. It’snothing but a tax and it would support incumbents surely. In another section, it examines the aforementioned iPad tax; a tax on the broadcast spectrum; a spectrum auction tax; a tax on ISPs and cell phones; and a tax on advertising (brilliant: taking a cut of the last support of news in America).

* New tax status. The document spends much space looking at ways to make journalism a tax-exempt activity and suggests the IRS should change its regulations to enable that. It also looks at changing tax law to enable hybrid corporations (“benefit” and “flexible purpose” corporations that can judge success on serving a mission and not just maximizing profits) as well as L3Cs.

* Finally, the document looks at the one thing that should be in its purview as a government agency: getting government to make its information open and accessible to view and analyze. Well, amen to that.

I’m quoted in the document from my testimony saying that I am “optimistic to a fault about the future of news and journalism. The barrier to entry into media has never been lower…. But what we do need is a level playing field.” And in a footnote: “If you’re talking about surviving, you’re talking about the perspective of the old, legacy players who had a decade and a half to get their act together, and they didn’t The future of journalism is not institutional, we now know, it is entrepreneurial.”

But this document does nothing to enable that entrepreneurial future. If you want to give somebody tax breaks — and I wouldn’t — give them to those who invest in innovation — whether as disruptors from the outside or as visionaries from the inside. I certainly would not change laws to favor incumbents over those innovators. I see no reason to provide tax subsidies to support an activity that is now a hundredfold more efficient than it used to be. Rather than restricting the flow of information by making it proprietary, I’d argue that it is in the interest of democracy to make it yet freer.

The real problem I see here, again, is the alignment of the legacy institutions of media and government. Here, the internet is not the salvation of news, journalism, and democracy. It’s the other side.

The real advice I gave the FTC is not quoted in the document. It’s this: Get off our lawn.

May 27 2010

14:00

The Newsonomics of wilting flowers

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

Ah, the Dream of the Wilting Flowers. Like many web dreams, premature, premature, premature…and then, maybe soon, pop. A sensation, with lots of dollars involved. Our best current example: Steve Jobs’ “invention” of the iPad, which of course was dreamed up in quite similar forms, decades before, in the fancies of Alan Kay and Roger Fidler, among others.

It’s all timing, right?

So it’s a good time to get a sense of what’s happening in local mobile commerce among news companies.

A friend visiting the exhibition hall at the NAA Orlando convention in April told me he’d been besieged by mobile commerce vendors. Then there’s the group (mobile commerce) grope, symbolized by the Groupon craze. Get a whopping good deal — but only if you can get enough of the crowd to go along with it as well. Of course, iAds are on the horizon, with Apple offering a sweet-smelling twist on walled-garden marketing pitches. Google’s AdMob — the leading mobile ad network — just got the thumbs-up from the FTC and has launched AdWhirl, its open-source (take that, Apple) “mediation layer” to facilitate mobile commerce. You can’t stay on top of all the mobile-marketing plays these days, no matter how much you try.

Let’s look at newspaper companies and what they’re doing with mobile commerce. Talk about timing: When Dan Finnigan ran Knight Ridder Digital a decade ago, one of his favorite mantras was the Dream of the Wilting Flowers. As in: It’s 4:30. You’re driving down the street. Your phone knows where you are, of course, and coming up, on the right is a florist…with a perishable commodity, flowers that will be worthless within 24 hours. Your “smart” phone, knowing where you are, who you are, your flower-buying habits, and maybe your spending proclivities, sends you the florist’s coupon for half-off, if you stop by within the half-hour. Satisfied merchant, satisfied customer, a perfecting of supply and demand.

It’s still a great vision, with a new generation chasing it, and getting closer. Talk to newspaper companies, though, and you’ll hear the answer is “we’re not yet there.” Closer, but not quite there.

Bill Ganon sees that wilting-flower dream, but he’s drilling down into something more basic: mobile sales training and the establishment of mobile pricing standards and analytics. Then, maybe by the end of the year, he says, the location-aware capabilities of smartphones may start to smell the daisies.

Ganon is the general manager for local market development for Verve Wireless, and Verve is the newspaper industry’s biggest mobile play. Spurred first by AP investment and partnership in summer 2008, many newspaper companies have turned to Verve for mobile content and, now, ad solutions. Verve now powers more than 400 mobile news sites for newspaper and broadcast companies including MediaNews, Hearst, Belo, McClatchy, Freedom, and Lee.

Verve is making a new ad push, after seeing its first forays fall flat locally. That push is predicated on scale. Its network — the Blackberry has just been added to the iPhone, with Android and iPad applications on the way, says Ganon — has grown dramatically. Year over year, for April, it has grown to 8.9 million uniques (from 2.9) and 130 million page views (from 51 million).

When Ganon — a veteran of old media sales at Newsweek and Sunset, as well as eight years with Qualcomm — took over local sales eight months ago, he found a ragtag group of local mobile efforts. Now, as Ganon describes his work, we can see the emerging newsonomics of local mobile pricing. As the mobile commerce world explodes, Ganon is focusing on the basics. He says Verve can now count 75 local sites beginning to make consistent sales, up from around 20 when he came on board. The basics of the push:

  • Training: Verve’s local market sales team of four is spending lots of time training newspaper and broadcast sales staffs on how to sell mobile. That’s reminiscent of the ongoing training done by Lem Lloyd’s merry band through the Yahoo-powered Newspaper Consortium. (In fact, with all the Yahoo, Verve, and marketing-services training ongoing, I’d wager that newspaper sales people have gotten more training in the last two years than in the previous two decades.) Verve’s training focuses on taking the mystique out of mobile: “Advertisers don’t like stealth solutions. They like to know what’s behind the curtain,” says Ganon.
  • Pricing: Ganon urges a $15 CPM (cost per thousand) floor for selling mobile. With that guideline, he says Verve-powered sites are averaging $19 CPMs, which would be about twice the average of what news sites on getting on the desktop web. Says Ganon: “This is your time to define metrics.” In other words, try to establish a price, not allowing prices to fall to low single digits as inventory is sold by middlemen, as has happened in the main digital business. Right now, most newspaper companies can count no more than five percent of their digital revenue, coming from mobile. Most of that total — maybe $100 million — is going to bigger, national brands like The Wall Street Journal and The New York Times. That’s out of maybe $500 million involved in mobile advertising overall in the U.S.
  • The Pizza Sale: Salespeople are being trained to sell the crust (a banner ad), the sauce (a landing page, tailored to action off the ad), and the toppings (call-to-actions, whether “click to call” or map directions). Pricing is still impression-based, though, Verve sees cost-per-click and cost-per-acquisition offers down the road.

What’s apparent is how early we are in local mobile selling — and how far away it is today from adding appreciably to news site revenues. The deals are small, and even the best-performing sites can count no more than 20 advertisers, with most having far fewer on their sites at any one time.

And the Dream of the Wilting Flowers? Ganon says Verve should be able to add in location-aware selling, maybe by the end of the year, but he believes that it “will be a major breakthrough.” So, 2011, maybe. When that breakthrough comes, the big question is who will benefit most: the local newspaper and broadcast companies, or Apple, or Google, or Yahoo, or maybe Verizon or AT&T?

Ask Walter Sanchez, publisher of BQE Media in Brooklyn and Queens and a Verve client, and he’ll tell you it’s an uphill climb. I met Walter at a recent New York Press Association conference, and his marketing efforts were way ahead of the curve, among publishers. He’s busy selling social sites, SEO, SEM, and mobile sites, he’s proud of getting such small businesses as Beach Bum Tanning sold on mobile ($500 a year for a landing page and 3,000 short-text messages). But he’ll tell you that most local merchants are indeed still mystified by the web, and they’re slow adopters: “When those 21-, 22- and 23-year-olds start buying their own businesses, in a few years, then, we’ll see real adoption.”

March 22 2010

14:00

December 10 2009

15:39

Next year’s news about the news: What we’ll be fighting about in 2010

I’ve helped organize a lot of future of journalism conferences this year, and have done some research for a few policy-oriented “future of journalism” white papers. And let’s face it: as Alan Mutter told On the Media this weekend, we’re edging close to the point of extreme rehash.

This isn’t to say there won’t be more such confabs, or that I won’t be attending most of them; journalists (blue-collar and shoe-leather types that they are) may not realize that such “talking” is actually the lifeblood of academia, for better or worse. However, as 2009 winds down, I do think that it might be worthwhile to try to summarize a few of the things we’ve more or less figured out this year, and point towards a few of the newer topics I see looming on the horizon. In other words, maybe there are some new things we should be having conferences about in 2010.

In the first section of this post, I summarize what I think we “kinda-sorta” learned over the past year. In the next, I want to point us towards some of the questions we should be asking in 2010.

To summarize, I think were reaching consensus on (1) the role of professional and amateur journalists in the new media ecosystem, (2) the question of what kind of news people will and won’t “pay” for, and (3) the inevitable shrinking and nicheification of news organizations. And I think the questions we should be asking next year include (1) the way changes in journalism are changing our politics, (2) the relationship between journalism, law, and public policy, (3) what kind of news networks we’ll see develop in this new ecosystem, (4) the future of j-school, and (5) the role of journalists, developers, data, and “the algorithm.”

But first, here’s what we know.

What we kinda-sorta know

As Jay Rosen has tweeted a number of times over the past few months, what’s remarkable about the recent wave of industry and academic reports on journalism is the degree to which they consolidate the “new conventional wisdom” in ways that would have seemed insane even a few years ago. In other words, we now kinda-sorta know things now that we didn’t before, and maybe we’re even close to putting some old arguments to bed. Here are some (big) fights that may be tottering toward their expiration date.

1. “Bloggers” versus “journalists” is (really, really) over. Yes yes. We’ve been saying it for years. But maybe this time it’s actually true. One of the funny thing’s about recent pieces like this one in Digital Journalist or this one from Fast Company is just how old-fashioned they seem, how concerned they are with fighting yesterday’s battles. The two pieces, of course, show that the fighting won’t actually ever go away…but maybe we need to start ignoring most of it.

2. Some information won’t be free, but probably not enough to save big news organizations. If “bloggers vs. journalists” was the battle of 2006, the battle of 2009 was over that old canard, “information wants to be free.” We can expect this fight to go on for a while, too, but even here there seems to be an emerging, rough consensus. In short: Most people won’t pay anything for traditional journalism, but a few people will pay something, most likely for content they (1) care about and (2) can’t get anywhere else. Whether or not this kind of money will be capable of sustaining journalism as we’ve known it isn’t clear, but it doesn’t seem likely. All of the current battles — Microsoft vs. Google, micropayments vs. metered paywalls, and so on — are probably just skirmishes around this basic point.

3. The news will be increasingly be produced by smaller, de-institutionalized organizations. If “bloggers vs. journalists” is over, and if consumers won’t ever fully subsidize the costs of old-style news production, and if online journalism advertising won’t ever fully equal its pulp and airwaves predecessors, than the journalism will still get produced. It will just get produced differently, most likely by smaller news organizations focusing more on niche products. Indeed, I think this is the third takeaway from 2009. Omnibus is going away. Something different — something smaller– is taking its place.

What we might be fighting about next year

So that’s what we’ve (kinda sorta) learned. If we pretend (just for a moment) that all those fights are settled, what might be some new, useful things to argue about in 2010? I’ve come up with a list of five, though I’m sure there are others.

1. What kind of politics will be facilitated by this new world? In the old world, the relationship between journalism and politics was fairly clear, and expressed in an endless series of (occasionally meaningful) cliches. But changes on one side of the equation inevitably mean changes on the other. The most optimistic amongst us argue that we might be headed for a new era of citizen participation. Pessimists see the angry town halls unleashed this summer and lament the days when the passions of the multitude could be moderated by large informational institutions. Others, like my colleague Rasmus Kleis Nielsen at Columbia, take a more nuanced view. Whatever the eventual answer, this is a question we should be trying to articulate.

2. What kind of public policies and laws will govern this new world? Law and public policy usually move a few steps “behind” reality, often to the frustration of those on the ground floor of big, social changes. There’s a reason why people have been frustrated with the endless congressional debates over the journalism shield law, and with the FTC hearings on journalism — we’re frustrated because, as far as we’re concerned (and as I noted above), we think we have it all figured out. But our government and legal system don’t work that way. Instead, they act as “consolidating institutions,” institutions that both ratify a social consensus that’s already been achieved and also tilt the playing field in one direction or another — towards incumbent newspapers, for example. So the FTC, the FCC, the Congress, the Supreme Court — all these bodies will eventually be weighing in on what they want this new journalistic world to look like. We should be paying attention to that conversation.

3. What kind of networks will emerge in this new media ecosystem? It’s a strong tenet amongst most journalism futurists that “the future of news is networked,” that the new media ecosystem will be the kind of collaborative, do-what-you-do-best-and-link-to-the-rest model most recently analyzed by the CUNY “New Business Models” project. But what if the future of news lies in networks of a different kind? What if the news networks we’re starting to see emerge are basically the surviving media companies (or big portals) diversifying and branding themselves locally? This is already going on with the Huffington Post local initiative, and we can see national newspapers like The New York Times trying out variations of this local strategy. A series of “local networks,” ultimately accountable to larger, centralized, branded organizations may not be what “networked news” theorists have in mind when they talk about networks, but it seems just as likely to happen as more “ecosystem-esque” approach.

4. What’s the future of journalism school? This one’s fairly self-explanatory. But as the profession it serves mutates, what’s in store for the venerable institution of j-school? Dave Winer thinks we might see the emergence of journalism school for all; Cody Brown thinks j-school might someday look like the MIT Center For Collective Intelligence. Either way, though, j-school probably won’t look like it does now. Even more profoundly, perhaps, the question of j-school’s future is inseparable from questions about the future of the university in general, which, much like the news and music industries, might be on the verge of its own massive shake-up.

5. Human beings, data, and “the algorithm.” This one fascinates me, and it seems more important every day. In a world of Demand Media, computational journalism, and AOL’s news production strategy, questions about the lines between quantitative, qualitative, and human journalism seem ever more pressing. If we are moving towards some kind of semantic web, what does that mean for the future of news? What role are programmers and developers playing? How will they interact with journalists? Is journalism about data, about narrative, or both? Is journalism moving from a liberal art to an information science? And so on.

These are all big, big questions. They get to the heart of democracy, public policy, law, organizations, economics, education, and even what it means to be a human being. They may not be the same questions we’ve been debating these past several years, but maybe its time to start pondering something new.

Photo by Kate Gardiner used under a Creative Commons license.

December 08 2009

01:42

Get off the lawn

There’s one thing that Rupert Murdoch, Arianna Huffington, Steve Brill, and I agreed on last week – and and there’s probably nothing else one can imagine this group would ever find consensus around. At the two-day Federal Trade Commission “workshop” (read: hearing) that asked how journalism will “survive” (their word) in the internet age, we all told the commissioner to kindly butt out.

Murdoch talked about a drumbeat building to bail out newspapers and how that would be a mistake, just as bailing out GM was. The government shouldn’t save companies that make things customers don’t want, he argued. Huffington said there’s no need for government intervention and after her speech (read: testimony), I interviewed her for my upcoming Guardian MediaTalkUSA podcast and when I pointed out that she agreed with Rupert, she pointed out that he was asking for government favors in his threats to try to rewrite fair use. Brill started his talk begging government to stay out.

And I told Liebowitz that the future of news will be entrepreneurial not institutional; the institutions had and blew their chance. What we need is a level lawn where the tender shoots of these new businesses can grow without government trampling them on its way to try to protect the legacy players.

But the commissioner’s title for this “workshop” alone – “How will journalism survive the internet age?” – is prejudicial, a foreshadowing of the results they have already prescribed: it implies saving the legacy players when, as the Knight Foundation’s Eric Newton said at the hearings today, journalism doesn’t need to be saved, it needs to be created. (The reason I’m not there today is that I am teaching my entrepreneurial journalism course. That’s one way to save journalism: build it.) The choice of speakers was itself prejudicial: mostly the old players who played their tiny violins. The questioning was prejudicial: an FTC bureaucrat threw a newspaper exec a soft ball to decry aggregators and suggest how he wanted to get money out of them (not hearing the idea that aggregators who are adding value to the content). Liebowitz’s presumptions about the event were prejudicial; in his opening talk, he said he has already scheduled more hearings to talk about copyright (read: changing copyright to favor the dying institutions).

My requestion to Liebowitz and company: Get off our lawn!

Maybe, just maybe, he heard a bit of this. He told the Wall Street Journal last night, “I think the message from today is be very, very cautious before you do anything.” How about nothing.

But from the looks of Twitter, it’s worse today. Rep. Henry Waxman told the group today that “Congress responds to market failures.” But this is not a market failure. It’s a market, doing what markets do. Let the market do that.

Rep. Waxman: Get off our lawn!

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