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Articles by: "Chris Pedigo, SVP Government Affairs – DCN"

Perspectives | Policy

Why the GDPR will force you to understand your customers’ needs

When I was 14, I walked door to door selling subscriptions for the local newspaper. It paid a lot better than ditch digger (which I also tried), but it also required thick skin. I quickly learned that I needed a good elevator pitch that captured the essence and value of what I was selling and that helped me make a connection with the person on the other side of the door-frame. If I could do all of that in 10 seconds, then the conversation almost always went well. Sometimes it led to a sale, sometimes it led to “come back later,” and sometimes it just led to a pleasant conversation. All of those outcomes were infinitely better than getting a door slammed in my face. I imagine it was also a much better experience for the prospective subscriber who had just been interrupted by some 14-year-old kid ringing their door bell.

One key to improving my elevator pitch was having a thorough understanding of the product. In this case, the local newspaper. Then I needed to master the value proposition, which meant tuning into the customers’ needs. The key value for most subscribers was the connection to their local community. This was the 1980s, so the paper was the primary way to keep abreast of local politics, sports, events, weather, and to read the classifieds. It was impossible to communicate the value proposition to a prospective subscriber without understanding how a subscription would be helpful to them.

Now, we get all this local information in a very different way. But, what’s now often missing in today’s digital ecosystem is the basic communication with consumers. Some companies do it well – see Apple’s just-in-time notices that allow apps and websites to ask consumers for permission to collect and use sensitive data like location and contacts. However, entire categories of companies aren’t communicating with consumers AT ALL. Just look at the thousands of ad tech companies that track unwitting consumers across the web.

Maybe there’s value to data collection in these contexts. But companies that don’t have a solid value proposition on the added value that they can effectively communicate to consumers better be ready for the door to slam.

The coming enforcement of the General Data Protection Regulation (GDPR) and the likely passage of ePrivacy Regulation in Europe will force companies to better explain what they are offering to consumers. In short, they’ll have to develop an elevator pitch.

For years, industry trade groups have heralded the consumer benefits of big data. But these benefits are often articulated in long-winded, research white papers designed to justify unbridled data collection to regulators. The fact is that, like their predecessor, direct mail, these “highly targeted ads” are more often viewed as creepy than carefully customized. Certainly, customers sometimes appreciate experiences tailored to their past behavior and preferences. However, giving them control over what data is collected and telling them why does not negate that possibility. Effectively communicating the “why” is the essence of the elevator pitch after all.

Starting in the spring of 2018, ubiquitous, non-transparent data collection is not going to fly in Europe. And in a global economy, that means marketers and advertisers everywhere need to pay attention. Companies will have to figure out concise and compelling ways to explain their value proposition to consumers in order to get their consent.

As a young newspaper salesman, I had to knock on the door and—if a customer was willing to open it—I had a brief opportunity to demonstrate the value the local newspaper could deliver. Otherwise, that door would close and I might not get another chance.

Based on my experience, the companies that understand why consumers value their product will be the ones that emerge victorious in this new landscape. Along the way, the whole digital experience might be improved for everyone. And the result will certainly be better than a potential customer opting to download an ad blocker instead.

Perspectives | Policy

DCN letter to the NRA

Today DCN sent a letter to The National Rifle Association (NRA), in response to their campaign to attack the press—including our members directly—with incendiary language. We’ve been watching carefully after they released this video and are increasingly disturbed by the transition into a much larger campaign by the NRA and other political actors. As we state in the letter, we respect their right to have a viewpoint and are simply calling out, particularly in a sensitive time, there are lines which shouldn’t be crossed regardless of the side of the debate you’re on. 

CNN’s Brian Stelter broke the news here.

Perspectives | Policy

Discriminatory deals could close the open web

Earlier this week, we filed our formal comments with the FCC detailing DCN’s view on net neutrality. In the comments, we noted the potential hazards associated with allowing ISPs to give preferential treatment to some websites over other, particularly when it comes to those owned by the ISPs themselves.  

 

The issues really come into focus when you consider the case of Verizon. Over the last few years, Verizon has made a series of strategic acquisitions of digital content – first, by purchasing AOL and all its properties and, recently, Yahoo (which have been combined under the Oath brand). 

 

Many have speculated that these purchases were all about Verizon building scale to attract advertising dollars. And, if that was in fact their goal, Verizon is now heavily incentivized to maintain and even grow the audiences and platforms they have acquired. To do so, a natural next step would be for Verizon to provide faster access to its vertically-owned sites.  

 

In addition, Verizon would be disincentivized to allow the same speedy access to websites that compete with, say, Yahoo Finance. It’s not even a matter of whether a competing site could try to pay for preferential access (which on its own makes it hard for smaller content providers to compete). In this case, Verizon would simply want to ensure that Yahoo Finance gets the most traffic. And given its unique ability to control access speeds, it would be in a position to do so.  

 

It’s hard to imagine that a public company with profit motives and shareholder expectations wouldn’t make every effort to drive more traffic to its sites in order to show the value of these acquisitions. However, the larger issue here is that—as an on-ramp to the internet—Verizon could prioritize delivery of its websites, thus ensuring that consumers are more likely to access them. 

 

The same dynamic would play out in any space where Verizon has its own content. It is not a stretch to assume that Verizon’s shareholders would expect Verizon to provide preferential access to Yahoo Tech, Yahoo Beauty, Yahoo Sports, Yahoo Lifestyle, TechCrunch, and HuffPost. In short, other tech review sites, fashion magazines, sports sites, lifestyle publications, and news organizations would lack the ability to compete fairly.  

 

Adding to the problem is that there are only a handful of mobile broadband providers. (And, as we all know, mobile increasingly dominates content consumption.) So, if each of the mobile broadband providers has their own content for a specific vertical, the remaining content creators would be left without a chair in the game. In fact, they would find themselves at a significant competitive disadvantage. Instead of competing on quality of content, publishers would be forced to compete over who can be bought first by a mobile broadband provider.

 

We all agree that ISPs should not block or throttle consumers trying to access the plethora of available lawful content. But, we need to be equally careful to ensure that discriminatory deals don’t dramatically limit the number and variety of websites available to consumers. As the internet’s inventor Tim Berners-Lee said, “The important thing is the diversity available on the Web.” The Internet is a wonderfully weird place where innovation is the norm and a cacophony of voices flourish. Let’s keep it that way.

Perspectives | Policy

A level playing field for companies and consumers

Whether your browsing history should be private by default has become a key question in the past year. Shortly after the election, Congress repealed privacy rules that would have required broadband providers to get consent from consumers before they could share this consumer data with advertisers. Members of Congress noted that it was unfair to apply these rules only to the internet providers but not to other giant digital companies, including Facebook and Google. When Senators and Representatives returned to their home districts, however, they promptly got blasted by some of their constituents for appearing to protect the shady practices of cable companies.

Partly in response to the backlash, Rep. Marsha Blackburn (R-TN) introduced the BROWSER Act. It’s a bill designed to level the playing field for companies that collect data about consumers at massive scale. And it is inclusive of all companies that are able to collect data across much of the web like ISPs, Google and Facebook. At the same time, the bill guarantees more transparency and choices for consumers. Ignore the shrill extremists in this debate. For good faith actors representing industry or consumer groups, there’s a lot to like about this bill.

In short, the bill would require companies to obtain opt-in consent from consumers before using “sensitive” data. This would include financial, location, and health information as well as browsing history and app usage. Some have argued browsing history and app usage shouldn’t rise to the level of sensitive information. However, common sense suggests otherwise. How would you feel if someone tried to buy and then publish a list of the websites you visit? In short, this bill says where you go in both the real and virtual worlds should remain private until you grant consent. I find it hard to argue with this.

The bill goes a step further in prohibiting companies from altering or denying service for consumers who do not opt-in. This provision is likely to draw the ire of industry lobbyists. But there’s a lot of merit in putting the onus on companies to develop a good “elevator pitch” for consumers. Companies that convince customers of the value to consumers are likely to be rewarded with their business—and trust.

The bill also requires a “clear and conspicuous” privacy policy that is easy to find. This generally codifies what is standard practice for good actors today. It’s unlikely that anyone can make a credible argument against providing transparency for consumers.

Finally, the bill designates enforcement authority to the Federal Trade Commission (FTC). This is something that the entire cable lobby advocated for just a few months ago. Consumer advocates might want more robust enforcement tools for the FTC, but I question whether the federal rulemaking procedure is agile enough to adapt to changing technologies and business models. FTC guidance and enforcement cases can provide useful direction and clear lines for appropriate behavior.

To be clear, this is just the beginning of a long and uncertain legislative process. But, it’s an important development that Rep. Marsha Blackburn (R-TN), a conservative Republican with a decent amount of experience with tech issues, has moved down this path. The fact that a few voices at the edges of the spectrum are opposed means she probably got it exactly right.

Perspectives | Policy

Unbridled tracking, zero rating, and how we’re about to break the internet

According to recent reports, Federal Communications Commission (FCC) Chairman Ajit Pai is preparing to roll back the net neutrality rules put in place by former Chairman Tom Wheeler. While we don’t know the exact details yet, Chairman Pai is aiming to restore the jurisdiction of the Federal Trade Commission (FTC) over ISPs in exchange for promises from the ISPs to not block or throttle content and to not engage in paid prioritization deals.

Let’s put aside the debate over whether the FCC or FTC is best positioned to police broadband providers and whether mere promises from cable companies will be enough to protect consumers. Make no mistake – there is a lot to consider there.

For now, let’s dig into what provisions of net neutrality are important for a free and open society. As we noted in our 2015 comments to the FCC, consumers should be able to access content they choose. Therefore, it makes sense to prohibit blocking and throttling by ISPs. Also, “paid prioritization” deals could potentially favor content creators with more resources and market power over non-profit or startup companies. “Paid prioritization” would also likely favor content companies that are owned by the ISPs. Certainly, without transparency and safeguards, “paid prioritization” quickly starts to feel like paying a ransom.

Missing the Plot  

What’s more concerning about Chairman Pai’s proposal is what is missing. Namely, the silence on “zero rating” plans and the lack of basic privacy protections for consumers.

During the debate over the FCC privacy rules for broadband providers, many cable lobbyists complained that these rules would create an un-level playing field. There was concern that ISPs would have more restrictions on their ability to surreptitiously collect and sell consumer data than companies like Google. To be clear, if you’ve watched the continued rise in the use of ad blocking software by consumers, then you know consumers aren’t happy with the rise in “big brother” data collection methods by corporate giants.

However, in restoring FTC jurisdiction, there is an opportunity to create a level playing field while at the same time providing some basic privacy protections for consumers. As I noted a couple of weeks ago, the industry’s self-regulatory code requires any company that tracks “all or substantially all” of a consumer’s activity on the web to obtain that consumer’s consent. Companies like Google and Verizon have already publicly promised to abide by these rules. If the FTC holds the industry to the promises made in their self-regulatory code, we would have a level playing field that begins to match with most consumers’ expectations under a flexible FTC enforcement regime.

Zero Rating Issues

“Zero rating” plans also need to be addressed. This is the practice whereby a broadband provider allows consumers to access content without counting that access against a data cap. ISPs tend to “zero rate” content that they own (see Verizon’s AOL and Yahoo content). As more and more content consumption moves to mobile devices (with data plans), “zero rating” will become a huge issue. Most consumers don’t have unlimited data plans and many broadband providers have stopped offering them altogether.

The concern with “zero rating” is that there are only so many content creators that can benefit. This is partly true because a broadband provider only wants one content creator per vertical. For example, AT&T might accept payment from sportingnews.com to “zero rate” their content. Verizon owns Yahoo Sports. But where does that leave every other content creator in the sports world? Doesn’t this create a barrier to entry for any startup? This quickly becomes a game of a musical chairs that doesn’t end well for consumers, innovation or minority voices.

Open or Closed

Content creators thrive in a competitive and open marketplace in which they compete on the value of their news and entertainment. Unchecked “zero rating” plans could have the same effect as ISPs engaging in blocking, throttling and paid prioritization.

We can and should have a robust debate about whether the FTC or FCC is best positioned to promote net neutrality. But let’s not lose sight of the opportunity to protect the internet’s promise of wide, open access and the societal good that promise has delivered since its inception.  Any net neutrality plan must also address “zero rating” and set a level playing field for consumer privacy protections.  Without these safeguards, the hallmark characteristics of the open web — diversity of voices, opportunity for discovery and freedom to innovate — are imperiled.

Perspectives | Policy

Press freedom—and friction—feed democracy

Freedom of the press around the world declined in 2016 for the 12th year in a row, according to Freedom House. Between reporters being jailed as enemies of the state and news organizations being shut down completely, journalism today faces a very hostile environment. Our current president’s tweet that the press is “the enemy of the American people” only introduces more turmoil for journalists and emboldens dictators around the world. His claim also couldn’t be further from the truth.

As Ronald Reagan famously noted, America is “a shining city on a hill.”  Our experiment with democracy is on full display for the world to see. And one of the more important factors of our success is a free and independent press. Over the course of our history, the world has seen an educated, relentless and free press expose the Teapot Dome Scandal and President Nixon’s Watergate along with countless local cases of corruption and deception. A free press is a bedrock principle of democracy. It provides necessary transparency, helping to educate citizens and fulfilling an important check on power.

On Presidents and a Popular Press

Yet, despite its importance, a recent Gallup poll showed that public approval ratings of major media platforms are at all-time low. It’s worth noting that, in the last 20 years, the media’s approval ratings have never risen above 40% for digital, print or television news. One could argue that if the press isn’t hated, then it’s not doing it right!

Before he became president, Thomas Jefferson was an original proponent of a free press. In a letter from 1787, he wrote “And were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.” However, during his successful campaign for President in 1800, candidate Jefferson endured heavy scrutiny by the press. By the time he took office, he hated the press or at least what he thought it had become. In his second term, he even ordered the arrest of newspaper editors for sedition. However, by 1816, seven years after he left the presidency, Jefferson wrote in a letter “where the press is free, and every man able to read, all is safe.”

Similar, strained relationships with the press continued with later administrations. After the failed invasion at the Bay of Pigs, President John F Kennedy stated “…the abrasive quality of the press applied to you daily, to an administration, even though we never like it, and even though we wish they didn’t write it, and even if we disapprove, there isn’t any doubt that we could not do the job at all in a free society without a very, very active press.”

Declaration of Independence

And just a few days ago, when asked about the role of the news media, former President George W. Bush responded, “I consider the media to be indispensable to democracy. We need an independent media to hold people like me to account. Power can be very addictive. And it can be corrosive. And it’s important for the media to call to account people who abuse their power, whether it be here or elsewhere.” This from a president who lost the popular vote but won the Electoral College. He assumed office at a time when the nation was highly politicized and divided. He weathered withering criticism from the press about his policies, cabinet picks and early missteps.

This is the point: Elected officials and most citizens will never like a healthy press corps. We don’t need journalists to be loved. We need them to be aggressive, persistent and abrasive. In turn, politicians should respect the press’ role in our democracy, not undermine it for their own political gain. Struggling democracies and entrenched dictators around the world are watching our “shining city on a hill.” What do we want them to see?

Perspectives | Policy

How the new FCC privacy rules can work for our industry

In late October, the Federal Communications Commission (FCC) approved sweeping new privacy rules, which require Internet providers Service Providers (ISPs) to obtain affirmative opt-in consent before collecting and using sensitive consumer data. Importantly, sensitive data was defined broadly by the FCC to include financial and health data, geolocation, social security numbers and—for the first time—browsing history and app usage data. ISPs would need to offer consumers a way to opt-out of the collection and use of non-sensitive data. With Donald Trump’s election, a Republican-led FCC is likely to withdraw or significantly alter these privacy rules. So, where do we go from here?

It is important to note there is significant precedent and support for requiring a higher data collection threshold for ISPs. In 2012, the Federal Trade Commission (FTC) issued a report, entitled “Protecting Consumer Privacy in an Era of Rapid Change,” which laid out a framework for how companies should protect consumer privacy. The report drew lines between practices that would meet an average consumer’s expectations and those that would not. In their argument for a heightened requirement for ISPs, the FTC noted that “ISPs serve as a major gateway to the internet with access to vast amounts of unencrypted data that their customers send or receive over the ISP’s network. Thus, ISPs are in a position to develop highly detailed and comprehensive profiles of their customers—and to do so in a manner that may be completely invisible.”

In addition, the Digital Advertising Alliance (DAA), the industry’s self-regulatory body, holds ISPs to a heightened requirement because they are in a unique position to “collect all or substantially all” of a consumer’s data. As the DAA Principles note, ISPs or “service providers” must “obtain the consent of users before engaging in online behavioral advertising.” For comparison, the DAA requires only that websites offer consumers a way to opt out.

This differentiated treatment of ISPs exists for good reason—there are fundamental differences between ISPs and other actors in the ecosystem. While the FCC has asserted on several occasions that it has no ability to regulate edge providers (aka websites), FCC Chairman Tom Wheeler also recognizes the difference between ISPs and edge providers. He has noted that consumers have fundamental choices about which websites they visit, while they do not have the same kind of choice when it comes to their ISPs. Indeed, the above-mentioned FTC 2012 Privacy Report notes that data collection and use by publishers like members of DCN tends to meet consumers’ expectations because that data collection and use occurs within the same context.

As we noted last February, context matters. DCN members go to great lengths to provide a trusted experience for consumers because our members understand that consumers have a myriad of places from which to get news, entertainment and information on the internet. This trusted experience and direct relationship with the consumer is also the value proposition for advertisers. Ubiquitous and non-transparent tracking by 3rd parties undermines the trusted experience that premium publishers are striving to create for their audiences.

As Ben Thompson notes in his post-election wrap, digital advertising has been built to be mostly direct marketing and data arbitraging on the failed premise that consumers don’t really care about their individual privacy or right to use the web without being tracked by 3rd parties. But the reality is that consumers do care – they’re limiting their online activity, clearing cookies, enabling Do Not Track signals and increasingly adopting ad blocking software. The current dynamic that favors a clear (and legal) arbitrage opportunity is actually harming advertisers and publishers along with the consumers they both serve and need. To continue ignoring these consumer concerns is likely to invite more regulatory scrutiny and foster an unhealthy digital economy. But, more importantly, ignoring these trends is also a missed opportunity for premium publishers who are best positioned to benefit from increased consumer trust.

While there will be significant debate about whether the FCC should have acted and whether the rules should be repealed, let’s be clear: Value should be shifted back to companies that collect and use consumer data transparently and in ways that meet with consumer expectations. In this way, the FCC privacy rules may serve to help publishers. If more companies act in an open and respectful manner, perhaps we can begin to repair the consumer trust issues that have battered our industry. In a world where context matters, premium publishers matter.

Perspectives | Policy

Spin this: We need to actually address the consumer need

Apple recently announced a fairly big change in their “Limit Ad Tracking” setting. Going forward, when a consumer activates the setting, the Identifier For Advertising (IDFA) will be set to 0. Thus, advertisers and ad tech companies would no longer be able to track that device across apps or websites and over time. While Apple asked companies to honor the “Limit Ad Tracking” setting before, it was hard (maybe impossible) to know whether companies actually complied. Now the setting has some teeth.

In response, ad tech lobbyist Alan Chapell is accusing Apple of giving consumers a way to opt out of advertising altogether. Naturally, as someone who advocates on behalf of publishers on these kinds of privacy issues, I had some initial reactions.

First, it’s absolutely ludicrous to say this is an opt out of advertising. Certainly it’s an opt out of behaviorally targeted advertising. But, the ads aren’t being blocked – they can still be served. What’s more the advertiser can still know that the ad has been served, where it was served and how it performed – companies would have a number of other options to derive this data. But let’s be clear: Advertisements can and will continue to be served. Apple’s change simply allows consumers to stop third party companies (with which they have no relationship) from using their IDFA to track everything they do on their device. There is actually a healthy argument that this change will make context and consumer relationships more valuable, which is important to both the consumers and the publishers of the content they enjoy on the web.

Which brings me to my second point: Consumers have been looking for ways to limit third party tracking for years and Apple is simply trying to meet that consumer need. Early on, consumers signaled their desire to limit tracking by clearing cookies – those tiny bits of code that ad tech companies planted on your computer. According to TRUSTe’s 2015 Privacy Index, 63% of consumers still clear their cookies. Then consumers started turning on the Do Not Track (DNT) signal in their browser. The World Wide Web Consortium (W3C) has developed a standard, which the ad tech lobby has been fighting against tooth and nail. And, of course, now consumers are increasingly turning to ad blocking software.

Finally, Chapell points out that “addressability should not be under the total control of a single entity.” Sounds like a great idea to have a multi-stakeholder group help set policy and technical standards. But, when the W3C (you know – the people who helped create the web) convened a multi-stakeholder group of representatives from all segments of the industry along with a few consumer groups, the ad tech lobby including Chapell worked to undermine and destroy the effort.

To answer the question posed by Chapell – do consumers have a right to opt out of advertising? – it should be painfully obvious by now that consumers are already opting out of advertising. Instead of throwing stones at groups and companies trying to address the underlying consumer need, perhaps Chapell and the ad tech lobby could work on giving consumers an easier and more robust way to express their preferences. DNT would be a decent start. Without better choice mechanisms, consumers are going to increasingly turn to blunt tools like Apple’s Limit Ad Track setting and ad blockers.

Perspectives | Policy

Why press freedom matters now more than ever

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;
or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to
petition the Government for a redress of grievances.”

—First Amendment to the Constitution (1791)

According to Freedom House’s Freedom of the Press report for 2016, press freedom worldwide has declined to its lowest point in 15 years. According to the report, only 13% of the world’s population enjoys a free press. From the heinous attack on Charlie Hebdo to state-sponsored censorship in China to violence committed against journalists covering organized crime in Mexico, it’s clear that journalists are increasingly hindered around the globe. Lest we become complacent, it is important to note that the U.S. only ranks at number 41.

Against that backdrop, it’s especially concerning when Donald Trump says that “70 to 75% of it (media) is absolutely dishonest, absolute scum.” And, he hasn’t stopped there. He mocked a disabled reporter. And, when a reporter asked him a tough question about the alleged funds he raised for veterans’ groups, Trump’s response was to call him “a sleaze.” It would be one thing if this was just bluster. But, Trump has advocated for the re-opening of libel laws so “we can sue (news organizations) and win lots of money.”

To understand what Trump wants to do, you only have to look across the Atlantic at the British libel laws. In order to bring a libel suit in the U.S., a person must prove that the published work was false. However, in the U.K., the onus is on journalists and reporters to prove their claims are true in court, which costs substantial time and money. This creates a chilling effect on reporting and free speech especially with regard to rich and powerful people or organizations.

In 2014, Cambridge University Press said it wouldn’t release a book critical of Russian President Vladimir Putin in the U.K. because it feared being sued. John Haslam, Executive Publisher at Cambridge University Press noted in a letter to the author that “the disruption and expense would be more than we could afford, given our charitable and academic mission.” More recently, HBO declined to release Going Clear—a documentary about the Church of Scientology—in Britain because of the high costs associated with defending against a libel suit. There are also cases of whistleblowers like Peter Wilmshurst being taken to court by a pharmaceutical company. Wilmshurst, a cardiologist, took issue with the science supporting a specific cardiac drug.  When he proposed to publish data from his experiments, he was sued for libel in an attempt to repress his findings. He successfully defended against the suit, but only after years in court and much cost to him.

Trump hasn’t offered any specifics about his plan to amend libel laws here in the U.S., but his stated goal of being able to “sue and win lots of money” suggests that he would go at least as far as Britain’s laws. And, to be fair, Trump isn’t the only one working to undermine press freedoms. The rich and powerful often want less criticism of their actions. For these reasons, the Founding Fathers made the First Amendment clear: “Congress shall make no law…abridging the freedom of speech, or of the press.” This fundamental and important boundary for government is essential to the free flow of ideas and leads to an informed public.

In 1804, Thomas Jefferson wrote in a letter that “Our first object should therefore be, to leave open to him (man) all the avenues to truth. The most effectual hitherto found, is the freedom of the press. It is, therefore, the first shut up by those who fear the investigation of their actions.”

Nelson Mandela echoed these sentiments in 1994: “A critical, independent and investigative press is the lifeblood of any democracy. The press must be free from state interference. It must have the economic strength to stand up to the blandishments of government officials. It must have sufficient independence from vested interests to be bold and inquiring without fear or favour. It must enjoy the protection of the constitution, so that it can protect our rights as citizens.”

America should strive to serve as an example of freedom and democracy. We should resist efforts to rein in the press by politicians who are either thin-skinned or trying to hide something. We should support the work of media organizations to shine a light on uncomfortable truths. We should applaud journalists who hold people in power accountable—not make it easier for wealthy individuals, government institutions, corporations and elected officials to silence their critics. Without a strong and independent press, we are less likely to hear opposite points of view—already a problem in American politics. We are more susceptible to demagogues, who feed on false information and half-truths. Without a free and vibrant press, the quality of our public debate will diminish, our political leaders will run unchecked and our democracy will suffer.

Advertising | Perspectives | Policy

Trust, transparency and the New York Yankees

According a recent report in the New York Times, the majority of new online advertising revenue—85%—will go to two companies: Google and Facebook. While these companies have consumer-facing services, the reason they dominate the digital advertising ecosystem is because of the technology and algorithms they employ as third parties. Third parties collect data about consumers yet have no direct relationship with them. In addition, those people usually have no idea that their data is being collected.

When you consider that direct response ads represent nearly two thirds of digital advertising and these companies only get paid when consumers click on ads it’s no wonder we see the digital experience dominated by annoying, intrusive, and crappy ads.

And how are consumers reacting to this situation? As TRUSTe has noted, clearing cookies is still the primary method employed by consumers to protect their privacy. However, clearing cookies has detrimental effects to the user experience such as requiring consumers to log in every time they revisit a site which then makes the stalking, creepy ads come back even more. Yet they still clear cookies because it’s one of the main tools they know about to prevent being tracked. In this dysfunctional dynamic, big data is being used to drive down costs of serving targeted ads rather than drive up relevance to the consumer.

A few years ago, consumers started activating their Do Not Track (DNT) signals in an effort to express a choice, even though there was no industry standard yet. As Doc Searls plotted out, the number of DNT signals declined at the same time that the number of consumers with ad blockers started climbing. It’s not a coincidence – consumers have been looking for easy ways to express choice. If this continues, publishers won’t be able to fund quality content like this piece about the early season slide of the Yankees.

It’s interesting that our members are having some success asking consumers to turn off their ad blockers in order to access the content they love. The conversation goes something like this:

Website owner: Hi loyal reader, would you pretty please turn off your ad blocker or whitelist this site? We need advertising revenue to pay for quality journalism.

About 40% of consumers: Sure! I love you guys.

The remaining 60% of consumers: Meh. I’m gonna go look elsewhere for that story about Trump. I really, really hate those annoying ads on those other crappy sites I visit.

My take on this is that consumers understand premium experiences and are willing to view advertising in exchange. But, the value proposition gets out of whack when there’s no transparency for the consumer and the experience is poor.

Meanwhile, advertisers aren’t happy either. As the ANA pointed out, $7.2 billion was lost to fraud last year. They’ve been paying for ads that aren’t even viewable. There are also huge concerns about the inability to fully document where all of their digital advertising dollars are going. In short, there’s a lack of transparency and trust for advertisers. Sound familiar?

So, how does our industry find its footing again? We’ve got to be more clear with consumers about the value proposition and provide them with easy ways to express choice over ubiquitous data collection. By putting consumers first, we also force the issue on ad fraud, viewability and accountability. Every company involved in the digital advertising supply chain would have to justify how it’s adding to the overall value proposition. They would need to “put in more value” than they “take out” – the best way to build trust.

The FCC recently proposed privacy rules for broadband providers that aim to give consumers more control. The problem is that this only applies to ISPs – not all of the other entities that relentlessly track consumers around the web. And, government regulation often becomes outdated very quickly – market solutions or real industry self-regulation are far more able to adapt to new business models and practices. Maybe the FCC proceeding will lead to a new conversation within industry.

With the growing market of Internet of Things, immersive experiences and connected world we live in, the strains on trust between advertisers, consumers and publishers are only going to get worse. We need to find the right balance of providing consumers with transparency and real choices. Consumers are looking for a better experience. Advertisers are demanding fairness. And, I would like to live in a world where I can read all about how badly the Yankees are playing.

Perspectives | Policy

The evolution of technology and the unchanging need for press freedom

Another day, another outlandish campaign promise from Donald Trump. This time, he threatened to “open up the libel laws” so he can sue the press when they write articles that he doesn’t like. While there is no federal libel law, whatever means Trump uses to fulfill his campaign promise would likely undermine some basic First Amendment protections. You know, part that says, “Congress shall make no law…abridging the freedom of speech, or of the press…”

With bulldozing, blustering candidates like Trump, robust protections for the freedom of the press are more important than ever. A strong and capable press corps is a hallmark of a healthy democracy. Just look around the world: Where you find restrictions on the press, you find authoritarian regimes that limit freedom of citizens. In some countries, press organizations are restricted in what they can say. In others, journalists are restricted in their access to social platforms or technological tools.

For all these reasons, it’s important that the multi-stakeholder process, organized by the National Telecommunications and Information Administration (NTIA) to develop a set of best practices to regulate the use of drones, recognize that journalists have fundamental protections under the Constitution.

A new technology such as Unmanned Aircraft Systems (UAS) doesn’t change the need for a free press. In fact, as ever, the press need to be able to utilize new technologies to continue effectively informing the public. The printing press enabled newspapers to reach mass audiences. The photograph helped reporters paint a more vivid picture. Now, UAS help journalists describe the full impact of a natural disaster or the landscape of a war-torn region. Access to new technologies helps journalists maintain their effectiveness and meet the expectations of the public.

The multi-stakeholder model developed by the NTIA has proved useful in bringing together diverse viewpoints and constituencies to hammer out agreements on thorny public policy issues. That said, journalists using drones to inform the public is very different from Amazon using drones to deliver packages. The Constitution recognizes the difference. The courts have recognized the difference. Because the NTIA group’s final product could be used as a framework for legislation at the state or federal level, it should also recognize the difference. Journalists need strong protections and access to the latest technology in order to maintain a robust democracy that can withstand any blustering, bulldozing political movement du jour.

Perspectives | Policy

Perspective of premium publishers: privacy rules for broadband providers

On Friday, February 26, Jason Kint, CEO of DCN, wrote to Federal Communications Commission (FCC) Chairman Tom Wheeler to lay out the perspective of premium publishers with regard to their upcoming privacy rules for broadband providers.  The letter urges the FCC to require broadband providers to provide consumers with transparency and meaningful choice with regard to the collection and use of personal information especially when this data will be used for purposes that fall outside of a consumer’s expectation and outside of the context of the interaction where the data was collected.

For example, a reasonable consumer would expect a mobile broadband provider to collect data about how a consumer uses their mobile device so the company could make improvements to the broadband service or ensure efficient management of the network.  However, consumers would not expect (or even know) if a mobile broadband provider was using this same set of data to tailor advertising to consumers on websites or apps.

As several news outlets reported, at least one mobile broadband provider was inserting a unique identification header every time a consumer’s mobile browser fetched content from a website.  This header was used by advertising partners of the mobile broadband provider to identify individual consumers, track their online behavior and target advertising based on that behavior.  However, neither the mobile broadband providers nor their partners meaningfully disclosed to consumers’ information about this activity or the ability to opt out.  In addition, it was later discovered that the header was being used without the knowledge of the broadband provider by some of their advertising partners to respawn cookies that a consumer had deleted – effectively reversing a consumer’s choice for privacy.

Consumers have different expectations with regard to 1st party, direct relationships versus other types of transactions which are indirect and out of context.  The FCC’s privacy rules should account for the differences in these relationships.  As our letter points out, greater transparency and choice will help rebuild consumer trust and help the digital economy reach its full potential.
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