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‘Like’ it or not, online ads are getting personal

Posted by arnon_k On February - 1 - 2011 ADD COMMENTS

Editor’s note: Adam Ostrow is the editor in chief of Mashable.com.

(CNN) — Is the future of online advertising one of incredibly targeted advertising based on your interests, online activities and Facebook “likes,” or is it one dictated by robust privacy controls that keep those details out of the hands of marketers?

Increasingly, it seems to depend on who you ask.

In the past week, both Google and Mozilla (the organization that makes the Firefox browser) have introduced ways to opt out of so-called behavioral advertising — industry speak for ads that target users through the use of cookies that can track your internet browsing and shopping history, among other activities.

Google’s solution is an extension for its Chrome web browser that lets users proactively block certain advertisers from serving them behavioral ads.

Mozilla’s approach would bundle a “do not track” feature with its browser, but require websites and ad networks to agree to recognize such requests from Firefox users.

Microsoft has previously announced its own plans for letting users opt out of such ads.

These efforts come at a time when the Federal Trade Commission is considering a formal Do Not Track list that would work much in the same way in the online marketing realm as the Do Not Call list works in telemarketing.

They also come at a time when the social media world is moving in the direction of highly personalized ads based on your activities, relationships and profile information.

Facebook has just rolled out a feature called Sponsored Stories that lets marketers repurpose activities such as “liking” a fan page, checking into a retail store or interacting with a branded app as advertisements that users see when they log in to the social network.

And this happens automatically — any time you interact with a brand on Facebook, your action could be used as an ad that entices your friends to do the same. For the moment, there’s also no way to opt yourself out of being featured.

Facebook’s not alone in this type of targeting, however. Business-focused social networking site LinkedIn has added the ability to target ads based on job titles, company name and group level, features that the company says have resulted in three to four times more clicks than standard ads during initial testing.

Meanwhile, research firm eMarketer predicts that Twitter will bring in $150 million in revenue this year, driven largely by the Promoted Tweets and Promoted Trends ads that the company introduced last year.

Much like Facebook’s Supported Stories, these ads showcase users talking about a given brand, with advertisers paying upwards of $100,000 per day for the privilege.

The next logical step in all of this, it would seem, is for the likes of Facebook, LinkedIn and Twitter to utilize this data outside the walls of their own sites and either create their own ad networks or license their data to third parties that want to enhance their personalization capabilities.

Of course, that’s even further at odds with proponents of “do not track,” who are already highly critical of ads that, among other things, “retarget” you based on shopping sites you have visited.

But it seems all but inevitable that personalization is here to stay and is only going to get more intimate. Sure, a small percentage of internet users may use tools that opt them out (if such options even become available in meaningful ways), but the vast majority will continue shopping, browsing and “liking” things on the Web without a second thought.

Legislation could conceivably force advertisers to offer more in-your-face alerts about when you’re sharing information that could be used in ads, but you can bet that user experience designers will be ready to create prompts that get users to click “continue,” as has been the case with endless terms of service agreements and, in more recent times, Facebook applications.

Of course, that’s only if it gets to that point — most of the key players in this debate are all spending big in Washington to make sure any new regulations are as unrestrictive as possible.

Soon-to-be former Google CEO Eric Schmidt caught flak in December when he told CNBC that, “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”

While that might be a short-sighted way of looking at the current debate on online privacy, it does represent a reality of where things are headed, especially within the advertising realm. As users, the smartest path for now may simply be to heed Schmidt’s advice.

“The cost of reading the New York Times for free is being tracked. The cost of being on Facebook is being data-mined,” Peter Eckersley, a senior staff technologist for the Electronic Frontier Foundation, said Friday at a panel discussion on the intersection of technology and privacy.

Eckersley’s comments came at an event organized by Google at its Washington, D.C., office to mark Data Privacy Day — an international effort by governments and businesses to draw attention to the issues surrounding individuals’ online privacy.

A seemingly constant stream of breaches, accidents and misfires have given the issue fresh visibility this year, and prompted lawmakers and regulators to consider new mandates aimed at protecting their constituents.

So as the fourth annual Data Privacy Day kicked off on Friday, the feeling of urgency in the room at Google’s event was palpable.

Getting the “wonks” and “geeks” talking in the same language is the first challenge. Engineers think linearly, like computers running code, said Alma Whitten, Google’s director of privacy product and engineering. Policymakers come at it from a different angle.

And then both sides need to be able to communicate with users, who don’t want to muck around with complicated controls and account settings.

“The people that understand tech and understand the policy side and engage really have a challenge to live up to in making how this works clear to everyone,” she said.

Unsurprisingly, the tech companies would prefer to see these problems solved through tools, not rules. Google (GOOG, Fortune 500) touted the new “two-step verification” option it will be rolling out to all accounts within the next few weeks.

The new opt-in setting gives users a second security wall. When someone logs into a Google account for first time from a new computer, a code will be sent to the phone (typically a mobile, but a landline will also work) associated with the account. That code is required for access — a step intended to keep out intruders who have obtained the account’s password.

Facebook also launched new data-protection tools this week. The biggest was a “safe browsing option” that integrates the HTTPS protocol for secure connections. That technical tweak will help solve a gaping hole that let hijackers grab control of Facebook accounts accessed through public Wi-Fi hotspots.

0:00 /2:38My private life revealed on the web
The EFF’s Eckersley praised the move as a key step forward.

“The thing that you should know about ‘http’ is that it’s fundamentally very hackable,” Eckersley said. “If there’s an ‘s,’ you have a good chance of protection against those kind of threats.”

In this case, though, it was a bit like bolting the barn door after the horses have fled. Facebook posted its new security tool the day after CEO Mark Zuckerberg’s fan page was hacked.

A researcher who has accused Google of bias says the internet giant is now waging a campaign to discredit him.

Ben Edelman, an associate professor at Harvard Business School, published a study this week claiming Google boosts its own products in search results.

The Californian company responded by suggesting he was actually working on behalf of its rival, Microsoft.

But Mr Edelman told the BBC that Google was launching “personal attacks” to distract people from its own behaviour.

“I don’t mind personal attacks, to be honest, because I think it shows they can’t argue against the research,” said the associate professor.

“That’s what they’ve done to most of my recent research.”

His study, “Measuring Bias in Organic Web Search”, was conducted in August last year alongside Harvard colleague Benjamin Lockwood and published on Wednesday.

It found that Google gave undue prominence to its own sites across a number of popular search terms, such as e-mail, video and chat.

Under a search for “e-mail”, for example, the study found that Google’s top result is its own Gmail service – despite the fact that almost twice as many people searching the site subsequently clicked on the second result, Yahoo Mail.

The company responded angrily to the study, issuing a statement that accused him and his methodology of deliberate bias.

“The report is highly biased, ignoring contrary examples like “search engine”, “book flights” or “directions”, and failing to account for other reasons why certain sites rank highly,” it said in a statement.

It was also unimpressed by the author’s credentials.

“Mr Edelman is a longtime paid consultant for Microsoft, so it’s no surprise that he would construct a highly biased test that his sponsor would pass and that Google would fail,” it said.

“Google never artificially favours our own services in our organic web search results, and we perform extensive user testing to ensure that search results are ranked in a way that provides users with the most useful answer,” it added.

Antitrust investigations

The issue strikes at the heart of Google’s multibillion dollar search business, which it has always said is based on a neutral, automated system that merely reflects how popular a site is online.

That claim is already being questioned by regulators in Europe and America, following complaints from some services who feel they have been deliberately excluded.

In November, the European Commission announced that it was launching an investigation into whether the company was abusing its dominance.

Earlier last year, meanwhile, the attorney general of Texas said he was looking at claims that Google manipulates results to boost its own products and therefore make more profit.

Mr Edelman said his work was a thorn in Google’s side because it backed up those criticisms.

“I can see why it would hit home for them – they’re under antitrust scrutiny on at least two continents,” said Mr Edelman. “Their approach of asking people to trust them seems to be wearing thin.”

Mr Edelman told the BBC that the study could have been improved with more information and time.

He said its data could have been more recent and the search terms could have been independently chosen. But, he added, the numbers were sound and that he stood by his conclusion.

Not everyone agrees with Mr Edelman’s analysis, however.

Danny Sullivan, the editor of the Search Engine Land website, has defended some of Google’s practices in the past. He said the Harvard study did outline some “odd” behaviour but said the figures could also be used to show that Google was less biased than might be expected.

“Statistics can easily be turned to whatever you want them to be,” he wrote. “I feel like Edelman is turning his study into the most negative view possible.”

Responding to Google’s claims of bias, Mr Edelman said that he had been a paid consultant for Microsoft in the past, a fact openly disclosed on his website.

However, he added, the research – which also looked at Microsoft’s Bing service and found it was less skewed than Google – was not deliberately designed to produce such a result.

He added that he had also given free advice to Google in the past as well as other companies, including the BBC.

He also said that the company supported him when he criticised the behaviour and bad practices of Yahoo, which was Google’s main rival at the time.

“When Google didn’t have as much market power as they do now, they consulted with me on some projects,” he said. “How quickly Google forgets.”

Google’s Voice services are set to go mainstream in 2011.

Google (GOOG) is testing number portability on Google Voice (update: it was just taken down) which allows users to move their primary phone number to Google and then forward to a new number assigned by their carrier. I did this a few months ago at the invitation of Google and haven’t looked back. I can now forward my calls to my landline, Gmail, my new mobile number and work number at scheduled times and days. I also get free voicemail transcriptions, call recording and line transfers.

This is one of those services that becomes immediately useful and also immediately clear that you don’t ever want to live without.
few important things to note: If you are currently on a subsidized data plan (most of you are) you will incur an early termination fee and your plan will get cancelled. The process is similar to moving to another carrier. Also, Google is charging a $20 fee for number porting. As of now it only works on non-corporate mobile phones, meaning landlines and your work phone number can’t be ported, yet.
I spoke to Vincent Paquet, one of the founders of Grand Central along with Craig Walker, the service that was purchased to become Google Voice, who indicated that number porting would be rolling out soon, perhaps by the end of the month. He also hinted that Google’s upcoming Android Honeycomb tablets could have additional Google Voice features, perhaps the ability to make VoIP calls without a carrier voice account. They were displayed with the ability to video chat with other Google talk users.

Before you consider leaving voice lines all together, remember Google Voice isn’t positioned to be a voice line replacement…yet.

E-911 services aren’t yet mature (though I’m told Google is investigating that) and Google took some heat last year for not connecting to all rural carriers because of the high fees they charge.

How does Google monetize Voice? No, it isn’t whispering ads into your ears (though Paquet was amused by the notion). Paquet points to Skype and other VoIP carriers who charge international connection fees as one model. Connecting calls at Google’s scale is extremely inexpensive so huge revenues aren’t necessary to maintain the infrastructure.

Another reason for its existence, and the reason Paquet has stayed at Google long after the Grand Central acquisition, is Google’s focus on user experience. Paquet, like other Googlers I’ve talked to who were brought in by acquisition, had a chance to leave long ago but stays on because of the resources Google has at its disposal and its trust it places in its people. While it may take longer to make updates to Voice than it would as a startup (because of more code checking and testing), Google more than makes up for it with its server, bandwidth and other unique resources.

Voice is also a huge gateway into Google’s other services, especially the Enterprise, where eliminating the carrier and VoIP boxes would really excite small to medium-size business owners. At the time of purchase in 2007, product manager Wesley Chan said in a posting on Google’s website “We think GrandCentral’s technology fits well into Google’s efforts to provide services that enhance the collaborative exchange of information between our users.”

Dave Girouard, Google’s President of Enterprise indicated that soon Voice would be a managed service in Google’s Enterprise Apps just like calendar and email.

Google Voice is only available in the U.S. at the moment and calls to the U.S. and Canada are free throughout 2011. Voice is expected to roll out to Canada and Western Europe in 2011 or at least that seems to be the thinking. Google was briefly outed last year in negotiations with the Spanish government on bringing the product to Spain.

Paquet, a Frenchmen who has a passion for voice data services, had a previous VoIP startup that was picked up by Yahoo. He is even active on Google Voice help forums.

If you are near the end of your contract or off contract, I can highly recommend Google’s Voice services. Even if you don’t port your current number, you can get a new number (or just using it for voicemail) by signing up here. For much more on Google Voice, visit Google Voice’s YouTube Channel where you can see demos of most of the features in Voice.

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