FC: Responses to "High cost of Net privacy" oped by DoubleClick CEO

[Declan McCullagh <declan () well com>]

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More:
http://www.politechbot.com/cgi-bin/politech.cgi?name=doubleclick

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> Date: Fri, 10 Mar 2000 08:49:31 -0800 (PST)
> From: carl () lasvegassun com (Carl Shapiro)
> To: declan () well com
> Subject: Re: FC: The high cost of Net privacy, oped by DoubleClick CEO
>
>
> Hi Declan,
>
> I think it's interesting that Mr. O'Connor compares internet
> business models to those of television and radio.  Those media
> have long been able to deliver effective advertising without
> the sort of consumer profiling that he advocates for the net.
> He doesn't explain why he thinks that kind of intrusion is
> necessary now.


> Date: Fri, 10 Mar 2000 11:47:11 -0500
> To: declan () well com, politech () vorlon mit edu
> From: Marc Rotenberg <rotenberg () epic org>
> Subject: Lessons of Doubleclick - Marc Rotenberg
>
> Declan -
>
> Here is my reply to Kevin O'Connor, sent to the Wall
> Street Journal for publication earlier this week.
>
> Marc Rotenberg
> EPIC
>
> -----------------
>
>
> LESSONS OF DOUBLECLICK
>
> If you pick up a newspaper or a magazine, watch a television show or
> listen to the radio, advertisers will send you a targeted message
> but you will still have your privacy. This is true for multi-million
> dollar campaigns and five-dollar classified ads.  Watch the Super
> Bowl with 140 million other sports fans, and you'll probably see ads
> for cars or beer, or some other mass-market product. Pick up an
> issue of a magazine for coin collectors, and you may find an ad for
> a Liberty Silver Dollar from 1888 in uncirculated condition.
>
> Advertisers have always been able to tailor ads to specific markets.
> With the Internet it is even easier to do. The subject matter can be
> more focused, the information more timely. Advertisers also get
> almost instantaneous feedback on which ads are working and which are
> not. Follow an auction on e-Bay and you will see just how well the
> Internet enables targeted advertising between buyer and seller and
> still protects privacy.
>
> All of these factors suggested that Internet could be a very
> effective way for marketers to reach customers with a minimal
> privacy intrusion. But Doubleclick, and in fairness, several of its
> competitors pushed the envelope and decided that reaching customers,
> regardless of the privacy consequences, was the way to go. Not
> content with the most effective and efficient form of advertising
> ever made possible, these companies began plans to profile net
> surfers, to link anonymous clickstream data with detailed and
> personally identifiable purchase records.  They called it
> "personalization" but the process is "profiling" and the method
> involves the secretive collection of personal information about
> consumers.
>
> The schemes were deeply flawed, both as a matter of policy and
> technology. Doubleclick essentially ignored all of the generally
> accepted privacy rules. They couldn't even comply with their own
> privacy policy. As we pointed out in our complaint to the Federal
> Trade Commission, the privacy policy at the Doubleclick web site was
> constantly being revised.  First, Doubleclick's privacy policy
> assured users who received targeted ads from Doubclick that they
> would remain "completely anonymous." Then Doubleclick dropped the
> reference to anonymity and said the information was not "personally
> identifiable." More recently, following the merger with Abacus
> Direct, Doubleclick said that if it joined the two databases it
> would further revise its privacy statement to reflect its "modified
> data collection and data use practices."
>
> There was no way any consumer could make a meaningful decision about
> whether to disclose personal information to Doubleclick. Doubleclick
> could essentially do with the information whatever they wished. They
> might as well have scrapped their privacy policy and put up three
> words "subject to change."
>
> The technology was just as bad. Even Doubleclick's business partners
> were not aware of how personal information was being collected.
> Kozmo dropped Doubleclick when they realized that videotape rental
> records were being transferred by the advertising network, most
> likely in violation of the Video Privacy Protection Act. Web sites
> offering healthcare advice learned to their chagrin that they were
> passing on medical information on their visitors through the
> Doubleclick network. Even the opt-out scheme proposed by Doubleclick
> had problems. Customers who wanted privacy would be required to
> store a Doubleclick cookie on their computer. Not a very smart idea
> when consumers, trying to protect their privacy, are routinely
> deleting cookies.
>
> By the time Doubleclick dropped the plan, the company was facing
> investigation from the Federal Trade Commission, two state attorney
> generals, and a host of private litigants. Doubleclick's problems
> were hardly caused by the campaigning of a few privacy advocates;
> virtually anyone who thought about the long-term implications of
> profile-based advertising saw the problem.
>
> Doubleclick CEO Kevin O'Connor was right to admit a mistake and
> should be commended for responding, albeit belatedly, to growing
> public concern about privacy in the online world. The question now
> is what lessons will be learned. Is this simply a matter of "issue
> management" and inadequate campaign contributions, or is there an
> opportunity for a genuine exploration of how to develop business
> models for the Internet that are profitable and also respect
> consumer privacy? My hope is that the industry will take the second
> course. But this will mean taking seriously the need to develop
> strong and effective privacy measures.
>
> If net advertisers intend to collect personal information on
> Internet users, they should follow the most stringent Fair
> Information Practices. That's not just about giving individuals
> "notice and choice," it's about allowing individuals to know what
> the company knows about them, and to object to the use of the
> information and even to have it permanently deleted if they wish.
> It's about being more open and accountable in how personal
> information will be used. Access to a privacy policy is never as
> good as actually being able to see how someone else will use your
> personal data.
>
> Better of course would be for innovative firms to take advantage of
> the extraordinary flexibility of the Internet and develop
> advertising models that do not rely on the collection of personally
> identifiable information. Several advertising firms currently do
> this and others should consider it as well. There is every reason to
> believe that advertising models that respect consumer privacy can be
> made to work in an environment as dynamic as the Internet.
>
> Support for privacy legislation that would establish baseline
> standards across the industry would also be a good move. Self-
> regulation has its advantages, but in the world of privacy it simply
> protects bad actors. A better approach would establish simple,
> uniform, predictable rules for business and consumers. A legal
> principle in support of anonymity will do a lot to spur the
> development of robust technologies of privacy.
>
> One argument that simply does not fly is that the surreptitious
> profiling of customers' private activities -- what web sites they
> visit, what articles they read, what pictures they watch -- is
> necessary to support the Internet. That's an argument without bounds
> and one the Net advertisers should drop quickly if there is going to
> be a real discussion about how to protect privacy online.
>
> Consumers are serious about the need for privacy protection on the
> Internet. Now it's time to see if business can be equally serious.
>
> Marc Rotenberg
> EPIC
> Washington, DC
>
>
> -----
>
> (c) 2000 Marc Rotenberg


> Date: Fri, 10 Mar 2000 14:36:09 -0500
> To: declan () well com
> From: Jonathan Gewirtz <nqn () ix netcom com>
> Subject: Re: FC: The high cost of Net privacy, oped by DoubleClick CEO
>
> O'Connor seems to argue that:
>
> *** A business model based on intrusive marketing using comprehensive
> databases of personal information is the only realistic alternative to a
> subscription based Web.
>
> *** The fact that many Internet users are outraged by third-party collection
> and use of their personal information is not a problem, as long as some
> users appreciate targeted marketing.
>
> *** DoubleClick, which exists to gather and use personal information, will
> (now) not use much of the valuable personal information that it has gathered.
>
> *** We should trust DoubleClick to make decisions for us about the gathering
> and use of our personal information.
>
> *** We should trust DoubleClick even though it would not, absent popular
> outrage over its practices for using personal information, have changed
> these practices.
>
> *** All privacy issues are moot anyway, because users will somehow be able
> to opt out.
>
> O'Connor frames the discussion as being about the balance between online
> privacy and the needs of advertisers. But this is a false conflict. The real
> issue is the question of who should do the balancing. If you present the
> issue in this way, most people will want to let individual Internet users
> make their own tradeoffs between privacy and convenience. O'Connor's
> business model, featuring a top-down system that takes most of these
> decisions away from individuals, is inherently in conflict with the wishes
> of a large number of Internet users.



> Date: Fri, 10 Mar 2000 16:31:20 -0500 (EST)
> X-Sender: doug () mail interlog com
> X-Mailer: Windows Eudora Light Version 1.5.2
> To: declan () well com
> From: Doug Carroll <doug () interlog com>
> Subject: Re: FC: The high cost of Net privacy, oped by DoubleClick CEO
>
> Kevin O'Conner states:
>
> > The vast majority of Web sites today lose money. To offset expenses, many
> > of these popular but unprofitable sites rely on paid advertising, just as
> > television and radio stations do. Without ads, neither traditional media
> > nor Web sites could provide free content.
>
> Website expenses for many are primarily offset by shareholder money, from
> IPO's and secondary issues. Advertising is a minor revenue source that
> adds parasitical sizzle to money-losing steak.
>
> Look at the balance sheets for most web-based companies, and see where
> most of the cash came from - IPO, or secondary issue, or bonds floated.
>
> Advertising contributes little revenue, and increases bandwidth costs
> greatly, while apparently undermining privacy without a warrant.
> I doubt overall it pays for itself either, measured by advertiser sales
> or site revenue. That's what shareholders are for.



> X-Sender: carthur@mgnmail3
> Date: Mon, 13 Mar 2000 10:37:20 +0000
> To: Declan McCullagh <declan () well com>
> From: "Charles Arthur, The Independent" <carthur () independent co uk>
> Subject: Re: FC: The high cost of Net privacy, oped by DoubleClick CEO
>
> Hi Declan...
>
> re this Doubleclick thing - it may have been a week, so perhaps someone
> else has pointed out that it's a complete crock?
>
> 1) The number of people who follow ads on clickthrough (as opposed,
> perhaps, to buying items like books or CDs on clickthrough) is vanishingly
> small, and getting smaller according to the usability studies I've seen -
> have a look at Jakob Nielsen's stuff at http://www.useit.com and
> http://www.useit.com/alertbox .
>
> Also, the claim that "a few years ago the Internet was squarely headed for
> subscription" is pure bunkum. A few sites like Slate tried subscriptions
> and backed off because people couldn't be bothered. People can't mostly be
> bothered to fill in registration forms, let alone have to pay for them too.
>
> Content access is free almost everywhere because it's so easy for Joe
> Public to do it that Joe Corporate is terrified of getting left behind if
> he thinks he has content which could attract people to use his site.
>
> And the Internet is "free" - haha. So that's why folks in the US pay their
> howevermanydollars per month for their Internet dialup (separate of the
> phone bill).
>
> This Doubleclick guy might find it useful to spout this stuff, but if he
> believes it too then he is seriously deluded.
>
> Fuller criticism below.
>         best
>         Charles
>
>
> At 4:37 pm +0000 on 10/3/00, you wrote:
>
> >Wall Street Journal
> >March 7, 2000
> >Editorial Page
> ....
> > > Without some assurance that ads will be effective, advertisers simply
> > > won't pay
> > > for online advertising. If that happens, we will lose a valuable
> >Internet
> > > business
> > > model. Web sites will have to begin charging consumers.
>
> Tell us some hard facts about how many people click through now. Less than
> 0.02 per cent, I've heard. And how many of those turn into sales? Even
> smaller.
>
>
> > > The vast majority of Web sites today lose money.
>
> Shd be "commercially-run" Web sites. My home page doesn't "lose" money.
> That was my free time which isn't costed that went into that.
>
> > >.. Without ads, neither traditional media nor Web sites
> > > could provide free content.
>
> Yes they could, and do. Try The Independent's site
> (http://www.independent.co.uk) or one of our competitors, The Guardian
> (http://www.newsunlimited.co.uk).
>
>
> > > The need for such Internet advertising has become more accepted. Just a
> > > few
> > > years ago, the Internet was squarely headed toward a subscription-only
> > > model.
>
> Completely wild assertion, unproven and never validated.
>
> > > Indeed, the consumer public has become very sophisticated about Web ads.
> > > We
> > > know from recent polls that some 70% of Internet users understand that
> >the
> > > Internet is free because, like network television, it is driven by
> > > advertising.
>
> In that case the 70% are severely misled. One wonders what the poll
> question was, and who organised it. Could it by any chance have been
> Doubleclick, with a question like "Would you pay to see a Web site without
> adverts"? One wonders.
>
> > > More
> > > important, two-thirds of Internet users understand that advertising lets
> > > small Web
> > > sites compete with giants that might otherwise dominate the Web.
>
> In what way "compete"? This is meaningless.
>
>
>
>
> > > They also recognize that ads can be helpful. Most Internet users welcome
> > > personalized content on the Web.
>
> Which is not the same as personally-targeted ads.
>
> > > This also applies to ads.. Targeted advertising allows consumers to
> > > receive
> > > information that is timely and relevant. It eliminates the clutter of
> > > unwanted ads
> > > and solicitations.
>
> Spam is dead? Someone should tell my filters. They're still killing it each
> day.
>
> > >... In the future we won't do business with
> > > U.S. Web publishers lacking privacy policies.
>
> Though that's not the same as examining whether those policies have teeth.
>
> /ends/
>
>  -------------------------------------------------------------------
> The Independent newspaper on the Web: http://www.independent.co.uk/
> It's even better on paper


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