It was a matter of time before the winds of regulation blew over the mysterious world of digital advertising and behavioral targeting, just as they blew out the telemarketing-junk call industry in the 1980s, email spammers in the 1990s, and pay-per-post blogola two years ago. I think it’s inevitable that the government will regulate online tracking and I believe the result — counter to fears it will decimate digital advertising — will be a much needed catalyst for innovation in online advertising.

From the 12.6.10 New York Times: “If the vast majority of online users chose not to have their Internet activity tracked, the proposed “do not track” system could have a severe effect on the industry, some experts say. It would cause major harm to the companies like online advertising networks, small and midsize publishers and technology companies like Yahoo that earn a large percentage of their revenue from advertising that is tailored to users based on the sites they have visited.”

Nothing gets the public’s libertarian hackles up like a threat to their privacy, even though 99% of them have no clue what constitutes identity and personal privacy in the digital age. The declared intentions of the Federal Trade Commission to crack down on online advertising use of tracking beacons, pixels or cookies is inevitable and has been brewing since 1995 when Mark Andreesen and  Netscape first introduced the cookie to great consternation and misunderstanding.

This is an old issue, one that tracks back to the mid-1990s and was embodied by the famous comment by Sun Microsystem’s CEO, Scott McNeally: “You have zero privacy. Get over it.” McNeally uttered those words at a time when the technology and media industries were trying to head off government regulation by forming the Online Privacy Alliance (OPA). Evidently self-regulation hasn’t been enough, and now the industry is on the brink of having some new regulations to conform to.

Let’s look at what the issue is and how things got to the point that the issue officially was blessed as the most significant story of the day in early December by the front page of the New York Times. The Wall Street Journal’s Julie Angwin gets the most credit for raking the privacy muck in a shrill series that is encapsulated on this page on the Journal’s site which is actually a very comprehensive and chilling catalogue of news about the state of digital privacy in modern America. While some critics like Jeff Jarvis have accused the Journal of being breathlessly alarmist and turning the practice of cookie-based advertising into the modern equivalent of Reefer Madness, the Journal has persisted, making it an inevitable outcome that sooner or later some bureaucrats and Congressmen would take up the  call and file a bill.

Let me attempt to simplify the issue in lurid terms: Web publishers and digital advertising companies are colluding to sneak  invisible tracking devices onto your computer which report back personal information about you so they can deliver targeted advertisements to you and share your personal information with marketers, and other interested parties.

The issue comes down to whether or not a web user has the right, by default, to ban the placement of  cookies or “invisible tracking pixels” on their PC when they visit a website or click on an ad. These cookies are  the digital equivalent of a tracking device snuck under the bumper of your car so your whereabouts can be tracked by the cops or enemy spies.

One of the most prevalent digital bugs or tracking cookies is the Adobe-Omniture 2o7.net tracker.  Omniture is a very powerful web metrics tool that web publishers and corporate web sites use to analyze traffic patterns and user behaviors.  Most major e-commerce sites use the tool and I’ve spent a lot of time in its dashboards analyzing metrics at CIO.com and Lenovo.com. This is an expensive tool, not something a typical Internet scam artist would use to hatch some evil plan, and it never reports back any personal information about site visitors. Your name, your address, your phone number, your social security number …. none of its transferred back to the analyst.

Yet the 2o7 tracking cookie it classified as spyware and a threat by most spyware scanners. Why?

Privacy is becoming a matter of degrees. While your name may not be passed without your knowledge, your IP address is. And someone with a subpoena and some diligence can, in theory, track you down to a specific geographical address. Your personal information — from your online medical records to your bank account numbers — all of it exposed and can be stolen by a criminal clever enough to trick you into parting with that information on a fake site or through so-called “social” engineering.  Identity theft is a very real threat online, and tends to trick the nontechnical, unsophisticated users the most.

But what does a ban on tracking cookies do to online advertising?

First, it will have an impact on re-targeting. This is where a site like Lenovo.com or Filson.com (two online retails I happen to visit occasionally) plant a tracker into your browser and then use it to trigger ads for their products when you visit other sites. So, if I go to Lenovo’s ThinkPad store and check out a T410S, I can usually expect to see a lot of Lenovo ads as I surf around to CNET, PC Magazine, and any other sites that Lenovo’s advertising agency deems appropriate to display the client’s ads on. Do these ads greet me by name? No. Are they intelligent enough to distinguish my interest in one product over another? No. Do they get progressively more aggressive in offering me a better price as time goes by? No.

In some regards, re-targeting is somewhat pathetic. It sounds semi-intelligent to follow a visitor around and throw more ads at them, but in reality you have to keep in mind one very real fact: online advertising is, for the most part, completely ignored by most users. Click through rates have been declining on most display (graphical) ads since they were introduced in the mid-1990s, and only so-called rich media ads featuring video or some form of dynamic multimedia are getting higher CTRs. We’re talking click rates under 1%.  Digital ads remain noise for the most part, and the only stuff that seems to have legs — witness the phenomenal one-trick pony known as Google — is contextual search advertising (which does not use tracking cookies).

As tracking and re-targeting comes under fire a few things will happen. First, advertisers will lose insight into the buying patterns or behaviors of customers, and selecting media for their advertising will become more difficult. Will advertisers regress to what is known as last-click attribution, where credit for a sale, registration or other “success event” be credited to the last ad or link the user  clicked before arriving in a store to make a purchase? Perhaps, but I think what will happen is the 2011 equivalent of New York City’s solution to the threat of being buried under too much horse manure in the late 19th century — technology (in NYC’s case the automobile) will simply cause the problem to become moot. Advertisers and agencies have been lazy and deceiving themselves that they have some semblance of intelligence in their metrics — which they laud as “behavioral targeting” – when in fact it’s ad insertion based on cookie triggers, nothing more. Take away the cookie and I guarantee some motivated entrepreneur will rush to the table with a new ad format that performs without them.

So, bottom line, bring on the era of regulation, punish the most egregious offenders, and stay tuned for the online advertising industry to evolve into a more intelligent form of advertising which has been overdue since the invention of contextual search ads by Bill Gross.

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And now for today’s Cluetrain moment:

Who owns the social media mission in your company? The public relations team most likely. Sorry, make that the press relations team — as the modern PR professional doesn’t talk to the public directly, but to them through the press. Handling the unwashed masses and mobs with their pitchforks and torches was usually the lot in life of the 1-800 telecenter drones and the hapless ticket agents in the terminal. Social changed all that. Now that neat blog you built to talk about your chili contest and good works with the local Walk For Hunger, the one the PR team uses to ghost expressions of empathy and good cheer from the CEO?; well now the comments are stuffed with a lot of people with dirty faces and tattered hems calling bullshit and pointing out your lack of clothes and complicity in the death of the orangutans and polar bears.

You can’t measure ROI from your Facebook pony when its stable is full of poop. Consider Nestle and be warned. When flaks and spinmeisters meet the mob, the result is predictable. There Will Be Blood. From Slate:

“Enter Facebook. Nestle has a Facebook page, and until this week it was a quiet backwater. But on Wednesday, defenders of the rainforest and its orangutans began to visit, illustrating their profile pictures with various clever permutations of the Nestle logo — “Nestle Killer” — and making a series of mean comments about the company. The powers that be weren’t pleased. At 11:26 p.m. Thursday night, the moderator of the page posted on the Nestle Wall:

To repeat: we welcome your comments, but please don’t post using an altered version of any of our logos as your profile pic — they will be deleted.”

(and a disclaimer, my PR colleagues get this stuff, and we don’t hang them out to dry in our various outposts, they get support from people who know the Golden Rule)

via Nestle’s brave Facebook flop – How the World Works – Salon.com.

Matt Jones at Jack Morton says what need to be said — it’s not the plumbing, but the water in the pipes when it comes to social marketing.

“At the risk of being branded a heretic or perhaps just being shown the door by my agency HR director, I have to say it: I hate social media. Why? Because it’s just media. And since when was media ever interesting?”

via Why I Hate Social Media – Advertising Age – DigitalNext.

Give every passenger a one time freebie in exchange for setting up an account for crying out loud. First session is on us. Try it. We hope you like it.

I flew home on Delta from NYC on Tuesday night and the plane happened to have the new GoGo Wifi service. I’ve tried them all in the past, and in the interest of testing I went through a 15 minute sign up on my BlackBerry bold, paid about $7.95 for privilege, used it for 15 successful minutes, and wondered the entire time why there is a seperate $9.95 rate of laptop users.

Bad marketing though. Give me a freebie on first use, a taste to get me addicted, and subsequent flights should see the dollars flow. I know the service costs like $100,000 per plane to install, but asking me to pay for the proverbial pig in a poke? Get me to log in, create an account, give you an email address, then spam the snot out of me. Sloppy acquisition marketing drives me nuts.

Wifi didn’t work for Boeing and its Connexion service.  It was too expensive and too early. Paying for connectivity just pisses me off to no end, but squandering a sign up opportunity drives me even nuttier.

At some point last fall, some smart and brave person at Hyundai made the brilliant decision to look ahead into the future a few months and realize that consumers would place a new car nearly last on their list of life’s necessities come January. By being the first automaker to promise a money-back guarantee should the buyer lose their job, Hyundai accomplished several brilliant marketing moves.

1. They established empathy with their customers.

2. They beat their competition who thought “employee pricing” — letting consumers buy at the same price as insiders — represented empathy. The competition has followed suit and looks like followers.

3. They tapped into the zeitgeist without resorting to the unimaginative marketing message most brands follow these days which is lower total cost of ownership – the aftersale expense which few consumers want to depress themselves with in the elation of acquiring something new. Do you want to talk about depreciation, mean-time-between-failure, and service costs? Meet my accountant.

Marketers have diminished options in a down economy if they cling to their old campaign playbooks. Those playbooks are what I call megaphone tactics. Yell a lot in the right places with the right people by your side and good things will happen.  This is good for selling cigarettes, booze, and hairspray circa the Mad Men Era of the 1960s.

First to go overboard — sports sponsorships. Read Bill Simmons’ great obituary on the NBA “The No Benjamins Association” on ESPN and look at the NASCAR cars rolling around the ovals with white hoods where the sponsor’s logo used to go.

“Here’s a little game to play during your next NBA outing: Look around for how many suites are dark. (You’ll notice them specifically in the corners or behind the baskets.) A dark suite means either that nobody bought it or that somebody did buy it for the season, then made the decision, “Screw it, let’s save the $1,200 [or whatever the number is] on food and drink and not give tonight’s suite tickets to anyone.”

Sports marketing has been whacked. Corporate home rentals for the Masters in Augusta is off 20% this year and woe to the recipient of government bailout money who buys a hospitality box in a baseball stadium this spring.

Second to go overboard: feel-good branding. Those “eagles-on-proud-wings-standing-on-a-rock-spire-in-Utah” ads are done.  If it doesn’t have a solid call to action (please buy our crap now, please), then it’s not running. Just for grins, next time you’re on the mid-town tunnel approach to Manhattan or on any prime billboard region, count up how many are paid and how many are public service announcements.

Third to die: print ads. Sorry, read the remaining headlines while you can, this is the season when dead-tree publishing gets slammed. Business rags are seeing ad counts down 33% year on year. I won’t echo-chamber the terrible news of newspaper bankruptcies in Seattle, Denver, etc. …. The print puppy died and daddy isn’t bringing home a new one.

So, I could wring my hands and be all dour, but no. Instead I want to point out that for those marketers who still have money to put in market, they seem to cling to last year’s playbook, just tuning the message around the advertising equivalent of a slasher flick to say everything must go, go, go at prices too insane to believe. I see it in the airline spam: Lufthansa offering off the wall fares to Paris –  $200 roundtrips to Europe.

What is happening at places like Hyundai is a realization that the rules have changed. Consumers are sitting on their wallets and will continue to. The question marketing needs to consider is not how to align to a corporate strategy built around volumes and market share — cascading strategy based on sales yields little more than direct marketing and demand generation tactics which do nothing to distinguish the company from its competition.

Standing apart from the competition is the heart of the whole branding thing. Differentiating on price is a fool’s game and leads to the whole slasher flick thing. Tossing the brand overboard in a down market strikes me as the equivalent of eating next season’s seed corn.

My modest proposal? If your marketing budget has tanked, and is down 50 percent from last year, the last thing you want to do is spread yourself thin trying to cover last year’s tactics.  This is the time to take a flyer, to do something innovative, to take a risk and consider the high risk tactic that was dreamed about in good times. This is not the time to fall back on classic Four-P marketing. Of those four p’s — Product, Price, Place, Promotion — I recommend.

Product: not the time to roll out a premium luxe model. Nor is it time to start reducing features around the product.  Example — this is not the time to reduce warranty terms, replace stainless steel screws with plastic screws, or cut any corners. The customers are more vigilant than ever. I saw an amazing presentation by the marketing reporter at Businessweek at Google last week and he showed how peanut butter makers are screwing us out of an ounce not by making the jar smaller. Oh no. They use a concave dent on the bottom of the jar (called a “punt” for you oenophiles) to reduce the volume. This is dickheaded and will come back to bite people.

Price: See my screed on taking the marketing message down to the gutter. Anyone can cut a price.  Smart brands like Hyundai go a step further and say “we feel your pain and fear and will do something about it.”

Place: I would not recommend buying the naming rights to a baseball stadium. I would slam the brakes on all traditional media and go 101% online.  Call me digital, but there it is. The traditional media has lost its mass audience effect big time. Media has exploded and fragmented into a million niches. The only way to accurately chase the audience is with a ninja digital team.  I am serious about this. This  Deprecession is the catalyst that is killing the generational gulf between digital immigrants and digital natives. You stand up and wave a traditional campaign, media plan and I guarantee your days are numbered.

Promotion: This is where the opportunity to put on the thinking caps is. No, no viral. No UGC on YouTube. I’m talking killing the notion of the campaign — as Charlene Li said yesterday on a panel, “campaigns are designed to end” — and move to an organic, ongoing, pervasive conversational model with the crowd. This is not social media marketing hand wringing — 99% of the self-annointed gurus couldn’t run a valid social plan if they were paid to do it. This is 180 degree flip from one-way blah-blah message marketing, expensive research and focus groups, and dumb people saying “I know half my advertising works, just not ….”

Promotions need to die and be replaced with full marketing empathy. This is the time to design a product with the customers, the time to listen to their feedback, give them something in a novel way, and break the model being chased by the competition. This is the time to break out with no questions asked service, with golden-rule customer service, with beyond the pale actions that will define the organization and make it beloved, not loathed. This isn’t about freebies, giveaways and concessions. It’s about constant listening and response. ComCast, JetBlue, these are the listeners and doers.

Anyway, enough dour ranting. Bottom line — this recession is the opportunity to kill off the tried and true and invent something new. Even if you decide to only risk a small portion of your seed corn this year, do it, and do it with every expectation of failing, but do it knowing that the customers will notice and maybe even like you for it.

I recommend a re-reading of Doc Searls’ seminal definition of conversational marketing, it’s worth the time.

via Think Ahead While Cutting Back: Marketing Priorities in a Recession : MarketingProfs Articles.

The Dour Marketer just caught a tweet from MarketingProfs’ Ann Handley pointing to this free piece by some smart people at MarketingNPV (disclosure, which has quoted me in a white paper penned by former colleague Rob O’Regan on marketing ROI in the past).

This is really good, n0-nonsense advice on how to cut when the mandate comes down from on high, and what not to cut during our current Depressionary pothole. There’s been a lot of this advice slung around recently, with rainbows-and-unicorns advice about “don’t stop the authentic conversation,” this sounds more like the real deal:

“First, get your head out of the emotional sand. You’ve lost the battle over the power of Marketing to drive the business in the near term. Don’t let disappointment cloud your future. Suck it up, look ahead, and don’t take it personally.

Second, take a step back and define the objectives for making smart cuts:

• Achieve the target reductions the CEO is asking for (most people stop right here).
• Support the company strategy for competing successfully.
• Conduct a thorough and unbiased analysis of all options.
• Preserve your credibility. Live to fight again another day.”

… even if the august analysts at Forrester have convinced themselves that as long as the bloggers disclose the payment and are permitted to say whatever they feel, that pay-per-post sounds better redubbed as a “sponsored conversation.”

I still think it is one of the dumber marketing manuevers in the social marketing bag of tricks.

Call me a purist but I like my critics to be objective and my reviewers to be uncomped. Product changes hands to be reviewed, not as gifts. Cash is spent on advertising, not on payola.

“As long as bloggers don’t hide who’s paying them and have the freedom to write whatever they want, we think sponsored conversation will fit in well with the other forms of marketing through blogs,” writes Forrester analyst Sean Corcoran. The report – written in conjunction with Forrester analysts Jeremiah Owyang and Josh Bernoff – also includes advice for interactive marketers considering using sponsored conversations in their marketing arsenal, much of it centered on the critical issues of authenticity and transparency.

Whether you agree with Forrester or not, we’d love to have you (and your readers) engage in this dialogue with us. Please let me know if you would like a copy of the new Forrester report, “Add Sponsored Conversations To Your Toolbox.”

There are so many more intelligent ways to get a blogger or group of bloggers to talk about your brand without resorting to cash payments. And I don’t buy this re-tweet/give away for charity dodge either.

I will continue to unsub from “posties” and have long given up following analysts and experts who condone these tactics. The world is slipping into the Idiocracy quickly enough without the “experts” undoing all semblance of objectivity and honesty in the higest potential communications channel ever invented.

Links withheld in protest.

update: Owyang is determined to bait me into a pissing match on this one, now by citing Lenovo’s Voice of the Olympic Games program as an example of a “sponsored conversation.”  I am not going to get semantic with him on “sponsored” and “conversation” definitions. Lenovo did not pay any athlete to blog nor once suggested, demanded, hinted or discussed that the athlete mention the word Lenovo. We gave them free laptops and FlipCams with no strings attached. The point that just won’t sink in with him — no matter who huffs and puffs, is payola is wrong, cash-for-blogging sucks, and Forrester is on the wrong side of the whole pay-per-post debate. I revert to Mark Cahill’s pointer to the concept of journalistic ethics. I suggest every blogger with a shred of dignity read it. And yeah, yeah, I know. Bloggers aren’t journalists. I’m suggesting they may want to avail themselves of some journalistic best practices and take the high road. http://en.wikipedia.org/wiki/Journalistic_ethics

No fewer than five former colleagues and friends have lit up blogs since the New Year, starting down a road that is remarkably rewarding if you have an affinity for it, but can also be frightening if it’s a forced march being taken on because someone suggested a blog is a smart career move (it is, done right). Thankfully for me spreadsheets haven’t migrated into the social domain – I’d be tongue tied if I had to communicate in cells and formulae, and I expect some new bloggers are more accustomed to communication through a Powerpoint slide than they are through a paragraph. I guess ex-journalists will have the easiest time in this medium, with quants and more analytical types a little more tongue-tied.

I sense a lot of these efforts are being launched because of the rising need to market their skills in an uncertain job market, to establish new ventures, and to put their expertise on public display. All, I might add as an aside, were launched on WordPress.com (and that is good). I wish the best to all, and regard their first posts with the same nervousness I felt when I started blogging. If I have any advice from those years, it’s this: it is all worthwhile when someone comes up to you and says those ego-stroking words: “I read your blog ….”

A blog is (to borrow a phrase from Walt Whitman) a song of yourself, a constant give and take between privacy and exposure, sharing and guarding, safety and risk. It’s not a printing press for cash, but there are those out there who feel compelled to launch blogs as businesses, and to that subculture there is a bleakness of affiliate marketing, PPC, linkbaiting, and SEO gaming techniques ripe for the picking but which never seem to yield much in the way of honor or cash. I understand when people in tough financial straits need to do what needs to be done to make a living. If blogging is your best idea of an at-home business plan, let me refer you to Dan Lyons – The Fake Steve Jobs — and his recent column in Newsweek on the futility of chasing $$$ from a blog.

For those who manage to stick with it, a blog can be an interesting ego exercise – a public diary and soapbox that needs some weekly tending before it withers. The following big issues will emerge.

1. Your “about page” is your new bio. If you optimize anything, try make sure the about page encapsulates your bio as succinctly and accurately as possible. This is the new resume. This is a freeform space for you to paint the picture of you. Add LinkedIn ties, Facebook, twitter accounts, photos, and a link to your actual resume.
2. Focused: there are highly focused blogs that mine one specific vein of expertise. This is a tried and true tactic to establish one’s self as a subject matter expert. For some, particularly those with a technical skill, a highly focused blog can work wonders in building reputation. Particularly if the blogger is actually smart. These blogs thrive in their niche by being social with other experts in the same niche. Web analytics is a perfect example.
3. Unfocused: there are blogs, like this one, that cover the gamut from professional to personal issues. I have wrestled with the idea of launching a separate blog or two, but in the end have decided to stay consolidated and veer from one area of interest to another.

Courage is the toughest issue. I get the most traffic and comments when I go out on the limb and say something provocative. Sometimes I regret going too far and not moderating my opinions. I launched my first blog in 2002 and gave up because it felt too weird writing polemics and highly opinionated pieces in public after a career as an objective journalist. It still feels weird. I won’t ever feel comfortable stating a political or religious opinion in public out of an old habit of trying to remain as neutral as possible. This is a curse, not a virtue. Then again, I know a novice blogger who was just shown the door because of some ill-considered blog posts.

Drafting and knowing when to just hit the publish button is an art. I am a sloppy grammarian, punctuater, and copyeditor. Some people are picky about those errors, I just go back and correct them as I find them. Blogs are not nuclear fission. The world won’t end if you publish a mess.

And one final note: you will look and look for some verification that the blog is worth the time it takes. If you start collecting scalps and measuring your net worth in terms of followers, subscribers, readers or page views, I feel sorry for you. It’s not about the numbers. For the Dour Marketer, a blog is a reward unto itself. Do it for the experience, not the followers, and certainly not the cash.

Advice for Those New to New Media – Specialize | All Things Cahill.

Good post by Cahill on the need to specialize in social media, indeed all things.

It’s not good enough anymore to be a “new media specialist”, or even a “web video specialist.”  It’s heading to the direction where each of the general video tasks will become their own separate areas of specialization.  Such as editing, or compression, etc.

So now would be the time, especially if you are looking to retrain, or are already working in new media, to think about becoming more specialized.  In the long term I believe you’ll see more job opportunity, and better job security.  You’ll still compete in the general market, and you’ll have that one area of expertise where you’ll be the superstar.

I use TweetDeck to follow mentions of ThinkPad and Lenovo on Twitter.  For the past few weeks a new phenomenon has popped up, one that confuses me to no end.

So we have a user @moon, who tweets, fairly frequently, variations on the following message:

” On Monday Groundhog Day I’m giving away a Lenovo IdeaPad S10 RT @moon 3 times and be the first to RT a selected Tweet on GHD”

Then he posts variations of that promotion by inserting the name of a well known “A-list” blogger or Twitterer — like @chrisbrogan or @scoble.

1. I don’t know what GHD is. [duh: GHD=Ground Hog Day]

2. I have no clue who Paul Mooney is. He has a website http://www.neuronspark.com but I can’t figure out what the business is. There are tons of affiliate marketing links on the right sidebar.

3. Why would he give away a $400 netbook? Is this an example of a grassroots promotion and by running his own contest he hopes to get more attention to his twitter ID and hence more followers?

4. Why is he inserting the names of @twitter celebrities?

It is very effective — @moon has dominated the Lenovo brand name in Twitter for a month, has induced tons of people to “RT” his giveaway, and in the end, got my attention, for I am writing this blog post, and sent him a direct ping asking “what is compelling you to give away the S10″ and observing:  “moon: Why do you retweet your giveaway to every social media person like chrisheuer, jowyang, etc? Seems like spam at this point”

He replied: “I know chrisheuer and jowyang so I was hoping they would reTweet the giveaway.”

And I said:  “moon: just concerned because of Dec. KMART incident with XXXXXX and Izea/Payperpost people. Don’t want lenovo associated with that”

To which he replied he wanted to do the promo with Lenovo.

So here’s the observation. If you manage a brand online, get ready for people to leverage it — both professional and personal — for their own gain.The big question is whether to grease the skids and enable it, stand by and watch it happen, or send in the clowns and get all legal.

The question is this: should I be giving product to bloggers and twitter users to activate this sort of self-managed promotion/contest or am I on shaky legal/ethical ground? I did rip into the “Blog Slut” phenomenon and don’t want to demean the Lenovo brand name by getting into any kind of payola arrangements. That aside, @moon has pounded the word Lenovo and gotten other people to Tweet it far more than the usual organic flow of the conversation would have. So should I shut up and be happy for the free branding?

Brands run into this with affiliate marketing programs all the time. If you give people an incentive to market on your behalf you may not be happy with their techniques they use to do it. This one just has me perplexed.

As one twitter user just said to my ardeht Lenovo promoter: “@moon This is a very clever promotion you’re running. Bet you’ll get lots of new followers and interest in what you do.”