Adding to the backlash against Facebook's new advertising programs, privacy groups are preparing to file complaints with the Federal Trade Commission against the social networking site. The digital civil rights group Electronic Privacy Information Center intends to file a complaint by January about both Facebook's new SocialAds and Beacon programs. The Center for Digital Democracy, which currently has a complaint pending at the FTC about behavioral targeting, also intends to pursue regulatory action against the company. EPIC plans to protest both Facebook's SocialAds--which tells members which of their friends have signed on as "fans" of the advertisers-- and Beacon ads, which notifies members' friends about their off-site purchases. The three-week-old programs mark Facebook's attempt to harness users on behalf of marketers, in effect turning members into word-of-mouth advertisers. And that's precisely why some advocates find the programs objectionable; they argue that Facebook is improperly pressing consumers into service on behalf of marketers. "Part of what Facebook is doing is taking from people the value of their endorsements, which traditionally is something that people can be compensated for, and selling it back to their advertisers," says EPIC Executive Director Marc Rotenberg. Currently, some states have privacy laws protecting people's right to control the public use of their image by marketers. In New York, for instance, there's a century-old law on the books banning advertisers from using people to endorse products without their written consent. Facebook has argued that people effectively give consent when they sign on as "fans" of particular marketers, but it's not clear that courts would agree. Facebook unveiled the new ad platforms to great fanfare earlier this month, with founder and CEO Mark Zuckerberg saying the program would usher in a new era for media. "The next 100 years starts today," he said at the time. A roster of more than 40 marketers signed on as advertisers, including online ticketer Travelocity, shoe seller Zappos, and retailer Overstock.com. But consumer and privacy advocates saw problems with the platforms the get-go. Within days of the launch, the Center for Digital Democracy and US Public Interest Research Group sent a letter to FTC chair Deborah Platt Majoras protesting Facebook's new ad programs as well as an expanded behavioral targeting effort on MySpace. The activist group MoveOn.org also is campaigning against Facebook's Beacon program, which publicizes information about people's purchases to their friends. While users can opt-out of sharing such information --either at the point-of-purchase or on Facebook itself--MoveOn says the program should be opt-in only, to ensure that members have explicitly consented. Last week, MoveOn started a Facebook group "Petition: Facebook, stop invading my privacy!" which had drawn more than 28,000 members by Tuesday.
Who needs a gPhone? Google's latest industry bombshell isn't aimed at wireless providers--it's aimed at the coal industry, and is centered on finding a way to produce cleaner, renewable energy worldwide. The search giant unveiled its Renewable Energy Cheaper than Coal, or REC initiative, on Tuesday--a set of strategies and investments to back projects aimed at producing electricity from alternative energy sources. REC will work in conjunction with its Google.org philanthropic arm to initially focus on developing solar, wind and geothermal power systems. In the coming months, the company will hire engineers and energy experts, and partner with established renewable resource providers like Pasadena-based eSolar and Alamada-based Makani Power for solar and wind projects, respectively. Though consumers and corporations alike have tried to "go green" over the past few years, coal still powers a majority of the electric power stations around the globe--and Google believes that a combination of science, philanthropy and capitalism can help change that. According to Larry Page, Google's co-founder and president, products, the company's goal is to produce "one gigawatt of renewable energy capacity that is cheaper than coal ... in years, not decades." One gigawatt of energy can reportedly power a city the size of San Francisco. "They're in a class by themselves," says James Elsen, CEO of the SustainLane, green-focused ad network. "Google has one of the largest solar array stations in the state of California planned, one of the largest hydroelectric powered data centers in the works, and they think about the interplay between social ventures like alternative power in the context of their day-to-day business--not split out as a separate philanthropic effort." "The environment is not an afterthought when it comes to the way they run their business," he adds. But industry consensus on whether the search giant was biting off more than it could chew with this ambitious initiative was mixed. Between the Lines tech blogger Larry Dignan wrote: "Unless Google is putting ads on windmills, it looks like a detour that could make shareholders squirm." During Tuesday's press conference, Page acknowledged that the REC initiative is clearly not part of the "search, ads and apps" strategy that has fostered dramatic growth and sent company stock prices well above $700 per share. "This doesn't count as search and advertising," Page says. "But we do want to give our business some latitude to look into new areas, especially when they are strategic." And as the company's energy consumption expenses continue to rise in line with their increases in search share, new tech developments and sprawling head count--investing in cheaper, renewable power sources is just plain smart business strategy. According to Seth Bauer, editorial director of National Geographic's The Green Guide, Google's move could signal a turning point in the kinds of relationships that large, successful corporations have with their investors. "Most companies would be too scared to try something this expensive, audacious and outside of their core product offering," Bauer says. "But Google has such an incredible track record and so much money at this point that the investors will probably just hang on for the ride. And if they didn't--I think Google's management team would try to take the company private again before they'd buckle under investor opposition." Others note that because Google's plan includes hiring up to 30 engineers and others to join the effort within the next two years, "it's the kind of corporate leadership we need to see to help solve climate change and create healthy, renewable jobs here in the U.S.," says Matt Petersen, president of Global Green USA. Ultimately, the green advocates say that Google's REC initiative will be good for both the environment and the economy--as, according to Bauer, "people recognize that our economy is stagnant in terms of developing a new industry. We're not likely to create a new billion-dollar manufacturing market. This push for renewable energy creates more than just jobs, it creates a whole new arena around which to build businesses."
Adapting to a shifting mobile landscape, Verizon Wireless said Tuesday that it will allow customers to connect to its network with any device or application that meets minimal technical standards starting next year. The move comes only weeks after Google announced an alliance with a group of wireless carriers and handset manufacturers, including Sprint and T-Mobile, to create a new mobile platform that will be open to third-party developers. During a conference call, Verizon Wireless CEO and President Lowell McAdam said the decision to open up its network was driven by a rapidly expanding universe of options for mobile consumers. "We're constantly monitoring market forces, and have seen the accelerated pace of innovation and expanding degree of customer demand for multiple business models," McAdam says. McAdam and other Verizon executives emphasized that its "Any Apps, Any Device" initiative would not change its existing "walled garden" business model. "We believe most customers still want the full-service model that exists today," McAdam says. "This will complement, not replace, our successful full-service model." But he acknowledged that subscribers increasingly want more choices as cell phones turn into mini-multimedia players. "What this separate and distinct model does is really tap into those customers looking for complete control of their device," McAdam says. Through its V Cast data service, Verizon already offers subscribers a variety of content from music to video clips to mobile TV at an additional charge. But the major carriers' own media offerings compete with a growing selection of "off deck" applications provided by outside companies and developers. The largest U.S. wireless carrier plans to unveil open access nationwide by the end of 2008. Early next year, it will publish technical standards that allow outside developers to create mobile products that will run on Verizon's CDMA-based network. Any device meeting the criteria will be approved for use, and will allow consumers to run any application they choose. Customers will be able to activate devices either online or by calling an 800 number set up by Verizon. Otherwise, responsibility for troubleshooting problems with devices or applications will rest with device makers themselves. Verizon intends to host a conference early next year to explain standards and receive input from the development community on how best to meet consumer needs. In seeking to attract developers to create new devices and applications for its network, Verizon will be competing with Google's planned Android platform. Google has already begun offering cash prizes to developers who come up with applications that are included its own mobile platform. The first Android-powered phone is scheduled to come out in the latter half of 2008 from T-Mobile. During the conference call, John Stratton, chief marketing officer for Verizon Communications, said the company's move toward open access has no bearing on whether it will join Google's Open Handset Alliance of more than 30 carriers and device makers. But he added that any devices or applications created for the Android platform would not necessarily be precluded from using them on Verizon's network. Some mobile analysts speculated yesterday that Verizon's initiative was prompted--at least in part--by the open access rules built into the upcoming auction of 700MHz wireless spectrum. The rules are intended to increase consumer choice on devices and applications used on the new spectrum. Google and various activist groups pushed for adoption of open access rules by the Federal Communications Commission. But McAdam denies that regulatory pressure had any influence over its decision to open up its network. "What goes on Capitol Hill or what's being discussed about potential 700MHz rules really doesn't play into this," he says. "It's really focused on meeting customers' needs." Analysts said the move could position Verizon well to expand its offerings while maintaining its traditional closed network. "Verizon Wireless' upside is that it will sell services to users that it wouldn't have had access to in its more traditional development and distribution model," said William Ho, a wireless analyst for technology research firm Current Analysis. But they say questions still remain about how Verizon will monetize its open access business model and what impact it will have on quality of network service. "More devices mean more network usage, which means degradation of quality," wrote Om Malik, founder of the popular GigaOm technology blog. "Will Verizon keep investing ginormous amounts of money to keep the moniker, "America's most reliable network"?
Seeking new ways to engage and retain viewers, TV networks are increasingly investing in online community tools and other initiatives. In an effort to foster fan communities, several have enlisted the help of AOL's Userplane subsidiary, which licenses ad-supported chat, instant messaging and video messaging tools. The networks include The CW, Independent Film Channel, Fuel TV and the U.K.'s Channel 4. "Put simply, our tools increase the time a user will spend interacting with a site or a branded property," says Sam Wick, head of business development at Userplane. Perhaps the most striking example of this trend is NBC's efforts to promote its popular series "The Office" by actually recruiting viewers to work at Dunder Mifflin--the colorless paper company where the series is set. In less than two months, the show's site has attracted over 800,000 unique users--100,000 of whom decided to enlist in the company's virtual workforce--along with eight million page views. "The success of certain show-based initiatives like "The Office" perfectly illustrates how a network can harness a show's fan-base with a well-executed online community," says Gartner Research analyst Andrew Frank. Seeking additional revenue streams, AOL acquired Userplane in mid-2006 for an undisclosed sum. Because Userplane's chat and video services are ad-supported, AOL was immediately able to sell ads on the more than 180,000 Web sites that license Userplane's hosted chat application, including MySpace. "Social networking features with media sites drive page views--which, in turn, drive advertising," Wick says. Userplane offers partner sites three options for using its technology: Paying a monthly license fee based on usage, accepting third-party advertising in lieu of fees, or a hybrid model in which licensed clients can also split ad revenues with Userplane. Userplane sells standard banner and text ads, as well as video ads that run in a panel within its Web platform normally used to show a user profile or a photo. Userplane's software also lets advertisers target audiences based on user profiles and demographics. And beyond keyword-targeted site advertising, Userplane's ad network is able to organize Free Webchat orders into a series of more than two dozen categories, from automotive and careers to health, news, shopping, and sports, Jones says.
Spotzer Media Group has launched an upgraded version of its automated ad service and received a second round of venture financing from Sierra Ventures and European Directories, a large yellow pages publisher in Europe. The €10 million investment (about US$15 million) will mainly be used by Amsterdam-based Spotzer to expand operations in the U.S market., where it plans to generate half of its revenues by next year. The deal also includes a partnership with European Directories in which Spotzer's ad-creation services will be offered to local businesses by the publisher's yellow pages sales staff. Started earlier this year, Spotzer provides "ready-to-air" spots to small- and medium-sized marketers that are unable to afford traditional TV and video media buying and production costs. It maintains a library of 500 generic commercials that can be customized for any client and targeted geographically and demographically across broadcast and cable TV, out-of-home TV networks, and the Web. Spotzer competes with a handful of other emerging self-service ad systems, chiefly SpotRunner, which has backing from heavyweights including CBS, WPP and Interpublic Group. The new features of Spotzer's online platform are aimed at making the system more fully automated. Clients can now use new editing tools to create a "rough cut" of an ad with different logos, slogans or other branding elements before actually licensing the ad. A geographic mapping and scheduling engine lets users determine the price and availability of ads. A local TV spot for the New York metro area that would run for could cost as little as $500, for instance. New online tools also allow marketers to develop basic media plans based on campaign goals and budgets. That might include driving traffic to a Web site, creating general awareness or promoting a special sale. The actual media buys are completed by Spotzer through the relationships it has with TV broadcasters, Web sites and other outlets. "We offer the comprehensive turnkey media services traditionally offered by media agencies," says Spotzer founder and CEO Andrew Klein, who previously founded Wit Capital in New York. A key goal for Spotzer is to enable a complete media mix for clients to reach the right audience at the right time. "The next big reality for local business is that the online environment is far more interesting than local television," explains Klein. "We're hugely focused on the convergence of TV-like advertising coming to more measurable Internet platforms." To that end, the company aims to build ties to yellow pages advertisers starting with its alliance with European Directories, which operates in nine countries including the Netherlands, Austria and Poland. If successful selling its service in Europe, Spotzer plans to expand the initiative to Yellow Pages directories in the U.S. and other parts of the world. The company currently operates sales and media offices in New York and Emeryville, Calif., and plans to expand from a dozen to 30 U.S. employees by January. "We're making a major push in the U.S. starting now," says Klein, whose company has focused mainly on the Dutch market to date. Spotzer received prior funding of €8.7 million from investors including Cyrte Investments.
Firebrand, an online and mobile platform featuring the "coolest" TV commercials and backed by Microsoft and NBC Universal, made its online debut this week at Firebrand.com. The channel, which is attempting to turn "the commercial break into a commercial destination," also is available on iTunes on a nightly late-night show on the Ion Network. "Firebrand programs TV commercials the way music networks have programmed music videos," says the site's co-founder and CEO John Lack. Lack, an early MTV executive, is targeting so-called Millennials, or Generation Y--he believes they are just as attuned to quality commercials as they are to any breed of content. That philosophy dovetails nicely with the hopes of marketing--which believe engaging creative will protect them from threatening consumer trends like audience fragmentation and time-shifting. "Great ads have their place in the open exchange of content going on the Web," says Phil Leigh, an online content analyst with Inside Digital Media. "Even for older people, there's some nostalgia with the old stuff." To date, however, this advertising-as-content strategy has achieved varying degrees of success, and failure. Anheuser-Busch's much-publicized branded destination BudTV.com has so far failed to establish an audience, while TBS' VeryFunnyAds.com reports over 73 million views since launching last year. Didja, a site for new and classic TV spots and produced by NBCU's USA Network, is slated to launch next year. Meanwhile, a site billed as "QVC meets MTV" was launched recently by Publicis Groupe, Droga5, and Digitas. Named Honeyshed, the site streams original sketch comedy clips and live programming all focused on consumer brands and aimed at an 18- to-30-year-old audience. Firebrand's business strategy includes paid placements on its Ion show, and advertising on its Web and mobile outlets. Ad sales is being headed up by Doug Rohrer, a former executive vice president/general sales manager at MTV Networks. The site includes a library of some 5,000 spots, and offers various interactive opportunities for marketing promotions. Along with Firebrand.com, the "content" is available online at Microsoft's MSNVideo.com and MSN Mobile, and NBC Universal's USANetwork.com.
I argue frequently about the importance of widgets: How they're an ad format that swims with the prevailing current instead of against it; that of the major marketing disruptions handed down by the Internet, only widgets are proving to be both promotion-effective and brand-enhancing; and how they allow marketers to join conversations they might not otherwise be invited into. But let's suppose for a minute that widgets aren't important to marketing. OK, I can't do that. Let's suppose for a minute that the importance of widgets to marketing is not yet known, that they are just emerging as the next new thing, are building in buzz, but short on evidence. Let's suppose that we are where we were about a year ago. Or where every new platform, technology and distribution development have found themselves. eBay, Amazon, Google have all been there. Mobile, Video, Behavioral Targeting did their time. Virtual worlds, advergaming, much of social media are there still. Whether the current marketing fascinations evolve into the next Google, or deteriorate into the next PointCast is relevant to their executives and VCs. But it shouldn't matter a whit to marketers. Marketers ought to be equipped to plunge into opportunities as soon as they are spotted, not after they have been proven. Not because they may develop into opportunities that marketers will have missed. Trust me, if any startup suddenly finds itself the brand marketer's holy grail, there will be inventory and opportunity for everyone. Rather, marketers should be involved in emerging opportunities because even if they are not big events themselves, they are training for marketing's big events. Every discipline needs practice, and no level of expertise can be achieved without it. For example, Derek Jeter probably fields about half a dozen ground balls during a 9-inning game. That he does so with such aplomb is because of the countless thousands of sharply hit grounders cracked his way during practice every season. Imagine if the only driving Jeff Gordon did other than his qualifying and competitive laps on the NASCAR track was shuttling his kids to school and soccer practice in the family minivan. Or if Lance Armstrong took 11 months off every year, and only rode his bike about 100 miles a day for 3 weeks straight during the Tour de France. These are world-class athletes I'm using as examples, but the analogy is valid. The marketers I work with every day - at major movie studios, CPGs, auto manufacturers, music labels, and financial services companies - are themselves world-class. If there were an Olympics for marketing, these people would be medal favorites in every event. And if you're not among them, you're competing with them for the same consumer mindshare. The trouble comes when opportunities have to be Olympic-caliber to warrant attention. The analogy ends here because athletes can't just decide they'll do the Olympics. They have to train and qualify and prove their worth every step of the way. Marketers with a big enough budget can elect to compete in any arena, including only the biggest. But without the endless hours of training and practice and qualifying and simulating competitive environments, their chances for gold are severely hamstrung. Emerging opportunities - in whatever medium - are an ideal training facility. The skills marketers are sharpening there, by nature of the "emerging" part of "emerging opportunity", are likely new skills, giving marketers more depth and versatility. Imagine if Brett Favre could run like Vince Young. Or if Roger Clemens could suddenly throw a knuckleball like Tim Wakefield. Or if Wal-Mart could make people love them as much as Prius. Sheer domination. But practice takes time, and time is money. And when you're talking about advertising, everything is money. How should you determine how much budget to allocate to the skill-building offered through emerging opportunities? One ratio to consider is Mickey's, who said to Rocky as the fighter was languishing through a workout, "For a 45-minute fight, you have to train hard for 45,000 minutes." By those calculations, for every $100K an advertiser spends on television, they ought to put $100 million into Second Life. Again, you see the analogy is like the lane dividers on NYC avenues - more of a suggestion than a hard rule. Wannamaker might suggest half the budget be devoted to emerging opportunities (he just wouldn't know which half). If only we could identify the wasted parts and put them to better use. I would posit, however, that given the supersonic speed of media change, all resources NOT contributing somehow towards developing the world-class marketing skills required to compete within emerging opportunities will someday be viewed as wasted. And some brands may remain on the sidelines, watching the race they ought to have won. Cunningham is Vice President for Global Sales at Freewebs. At cocktail parties he shamelessly introduces himself as "Widgetman." You can email him at chris@freewebs.com.