Latest Casualty Of NSA Spying Revelations: Web Advertising Based On Tracking Users

As we've noted before, Edward Snowden's revelations about the globe-spanning spying being conducted by the NSA are have all sorts of interesting knock-on consequences. Here's another: people are starting to worry about being tracked by online advertisers, and taking action to avoid it, as this story in Adweek explains: 

On Techdirt.

Did You Know that Mozilla is Hijacking the Internet?

A couple of weeks ago I wrote about the incredible spectacle of the European arm of the Interactive Advertising Bureau (IAB) attacking Mozilla on the grounds that the latter had "lost its values" because it insisted on defending the users' rights to control how cookies were used on their systems. 

On Open Enterprise blog.

Is Mozilla "Undermining the Openness of the Internet"?

One of the core areas that Mozilla is working on is user privacy, and one important aspect of this is controlling cookies. Most people are now aware that sites they visit seek to place cookies - small strings of information - on their systems as a way of tracking when and what they visit on that site. What many may not know is that so-called "third-party" cookies are also widely used: these allow people to be tracked as they move from site to site, and effectively enable a detailed picture of their use of the Web to be built up.

On Open Enterprise blog.

Has YouTube Just Been Saved?

On Open Enterprise blog.

Brad the Impaler Goes for Google's Jugular

Nice little analysis, there, Brad:

The future of the Internet will be decided by developments in online advertising. Online advertising is rapidly emerging as the fuel that powers the Internet and drives our digital economy. Online advertising is already a $27 billion market. This is projected to double, to $54 billion, in the next four years alone. That is roughly equal to the size of America’s radio and television industries combined.

These changes are not only of tremendous economic importance, but have serious societal implications as well. Online ads will increasingly provide the economic foundation for a free press and for political life more broadly.

Update: Oh, and here's Google's own pitch - which, to my ears, sounds strangely like something that Microsoft could have written....

Elsevier's Elephant in the Room

By some measures, the medical publishing world has met the advent of the Internet with a shrug, sticking to its time-honored revenue model of charging high subscription fees for specialized journals that often attract few, if any, advertisements.

But now Reed Elsevier, which publishes more than 400 medical and scientific journals, is trying an experiment that stands this model on its head. Over the weekend it introduced a Web portal, www.OncologySTAT.com, that gives doctors free access to the latest articles from 100 of its own pricey medical journals and that plans to sell advertisements against the content.

Well, imagine that. Strange, that the NYT doesn't even mention open access in this context. I suppose they considered it, but decided that it couldn't possibly be that my old employer Reed Elsevier is desperately trying to find a way to fight back against that tricky open stuff....

Opening Up Advertising

As the post below indicates, one reason that open content strategies are working is that online advertising is increasingly profitable (just ask Google). Further proof that advertising is evolving rapidly is the rise of OpenAds, one of open source's better-kept secrets. Here's a piece by Matt Asay with some useful background:

OpenAds is one of the most interesting open source projects/companies on the planet. Period. It's an open source ad server. Like Doubleclick without the lock-in or fees. In other words, open source. 100% GPLv2. I guess it should be no surprise that the world's most popular ad server, powering Web 2.0 business models, is open source, just as the LAMP stack is the technological basis for Web 2.0 sites/services.

Amazingly, OpenAds is British, too.

The Value of Free Content

One of the constant themes of this blog is that there's plenty of money to be made by giving away things for free. Here's an interesting study by Neil Thurman of the UK newspapers sector that confirms precisely that:

Advertising is relevant to the issue of content charging because, to a certain extent, there is a trade-off between them. Content charging, by limiting access, reduces the number of users to whom a page is exposed. When FT.com introduced a subscription barrier to parts of its content in May 2002, user numbers fell dramatically, as did its advertising revenue (Ó hAnluain, 2004). Conversely, when Times Online removed the subscription barrier it had imposed on overseas users, it experienced a “huge” increase in traffic (Bale, 2006).

Users are put off by having to pay, but traffic is also affected for technological reasons. Content charging can alienate sites from search engines and aggregators like Google (Outing, 2005). Similarly, imposing a subscription barrier also isolates newspaper websites like the Wall Street Journal’s WSJ.com from blogs, a growing source of traffic (Penenberg, 2005). In the current market, many newspapers feel that the revenue they could gain from content charging would be less than what they would lose in advertising. Even the UK newspapers who are currently charging for significant amounts of content — FT.com, Independent.co.uk, and Scotsman.com—can see the potential benefits of dropping these barriers

A companion study indicates that opening up can bring with it some unexpected benefits:

Some British news websites are attracting larger audiences than their American competitors in US regional and national markets. At the British news websites studied, Americans made up an average of 36 per cent of the total audience with up to another 39 per cent of readers from countries other than the US. Visibility on portals like the Drudge Report and on indexes such as Google News brings considerable international traffic but is partly dependent on particular genres of story and fast publication times.

Opening up means that users get to decide whether to read you, and that quality often wins out. Newspapers with closed content are unlikely to attract this kind of passing trade, and will therefore lose global influence as well as advertising revenue. (Via Antony Mayfield.)

Microsoft's Advertising Framework

This says it all, really:

An advertising framework may reside on a user computer, whether it's a part of the OS, an application or integrated within applications. Applications, tools, or utilities may use an application program interface to report context data tags such as key words or other information that may be used to target advertisements. The advertising framework may host several components for receiving and processing the context data, refining the data, requesting advertisements from an advertising supplier, for receiving and forwarding advertisements to a display client for presentation, and for providing data back to the advertising supplier. Various display clients may also use an application program interface for receiving advertisements from the advertising framework. An application, such as a word processor or email client, may serve as both a source of context data and as a display client. Stipulations may be made by the application hosting the display client with respect to the nature of acceptable advertising, restrictions on use of alternate display clients, as well as, specifying supported media.

In other words, every app running on Microsoft's advertising-enhanced OS will spy on you so that those nice advertisers can push junk in your face. Thanks, Microsoft. (Via Slashdot.)

Microsoft Pays $6 Billion For Who???

Interesting: Microsoft has apparently paid $6 billion for a company I've never heard of - aQuantive. Aside from demonstrating my shallow knowledge, this also underlines the fact that we live in an online world driven by advertising. And people said the banner ad was dead....

Flash: Now With Improved Evilness

I've always said that Flash was turning the Internet into television, and now here's the final proof I was right:

But the big seller for Adobe is the ability to include in Flash movies so-called digital rights management (DRM) - allowing copyright holders to require the viewing of adverts, or restrict copying.

"Adobe has created the first way for media companies to release video content, secure in the knowledge that advertising goes with it," James McQuivey, an analyst at Forrester Research said.

Content publishers are promised "better ways to deliver, monetize, brand, track and protect video content".

Interesting, of course, that no benefits for the user are mentioned here.

Pure evil.

Google + DoubleClick = GoogleClick

One consequence of Google's rather expensive acquisition of DoubleClick is that it turns the company from a search engine that sells ads into an advertising company that happens to have a search engine.

During Web 1.0, the accepted wisdom was that online advertising would never be viable as a revenue stream - the "real" money would have to come from somewhere else, such as subs or content purchased through micropayments. It will be interesting to see how things develop during Web 3.0...

BuyaBand, SellaBand

At last - someone is trying a new business model for digital music:

For the first time fans and Artists can be in business together. Therefore each Artist issues 5,000 so called Parts. Parts cost $10 (plus transaction costs) each. Together Believers have to raise $50,000 to get their Artist of choice in the studio. At any point before your Artist has reached the Goal of $50,000, you can withdraw your Parts and pick a different Artist. You can even get your money back. It's your music. It's your choice.

Once your Artist has raised $50,000 SellaBand will assign an experienced A&R-person to this project. Together with a top Producer, your Artist will record a CD in a state-of-the-art Studio. During the process you will get an exclusive sneak preview of this exciting process.

...

The music on the CD will be given away as free downloads on our download portal. All advertising revenues generated on SellaBand will be shared equally between you, the other Believers, the Artist and SellaBand. The amount of money you and the band will get paid depends on the advertising revenues and the market-share your band gains on our download portal.

In some ways this is like vanity publishing: people pay to be published. The differences are that fans pay for publication - micro-patronage - published items are given away (because content has zero marginal cost), and money is made from advertising (the Web 2.0 way). I can see this working, provided the main company Sellaband isn't taking such a big cut from the ad revenue that it is perceived as a free rider on the work and money of others.

At least it's founders seem to have the right background, as well as an interesting idea. Here's hoping. (Via OpenBusiness.)

Clowning Around

Although I am not a great user of YouTube, I know a significant cultural/market shift when I see one. NBC Universal CEO Jeff Zucker and News Corp. COO Peter Chernin clearly do not. Try these choice quotes from a media call about their rival to YouTube as reported by Michael Arrington:

Zucker is now on. Talking about importance of “significant IP protection” as a primary goal.

...

Chernin: this will be the largest advertising platform on earth.

So let me get this right. The primary goal of what Google has dubbed "Clown Co." is not serving customers are anything rash like that, it's "significant IP protection"; and what those lucky customers are going to get as a result of that primary goal is "the largest advertising platform on earth".

Well, that should be popular.

Second Life Goes Really Brazilian

In a significant sign that Second Life is beginning to expand beyond its early-user, largely anglophone base, the Internet arm of Brasil Telecom has announced that it is coming out with a localised version of Second Life this month.

The company estimates that there are currently 30 to 40 thousand Brazilians already active in Second Life, a number it hopes to double in the first year of operation. It also aims to help those currently using the English-language version to migrate to the new Brazilian client.

A separate arm of Brasil Telecom is being created purely for this venture; worryingly, the company behind it talks about "selling advertising inside the game". I don't think that's going to go down to well with the (virtual) locals....

Brits Get the Net - and Net Ads

I remember well during the heady Web 1.0 days worrying about business models (I know, this made me something of an oddity). Because it was clear to me that the banner advertising then in vogue just wasn't going to cut it. Net advertising - it'll never catch on, I thought.

Close. Not.

The second Net boom/bubble has been largely driven by Google and its targeted ads. The knock-on effect is that Net advertising is thriving, and no more so than in the UK, apparently. This article has some interesting figures on the differences between the UK and US markets, tying them in to techno-socio-economic factors.

Open Source Marketing 2.0

Apparently, Benjamin Horst has succeeded in rustling up enough dosh to take out an ad for OpenOffice.org, along the lines of the big Firefox ad campaign. Well done, that man.

This is doubly good news. First, because OpenOffice.org will gain some useful publicity, and secondly, because it shows that the Firefox ad was not just a one-off. In this sense, these campaigns point the way for future open source marketing drives.

Daily Me 2.0

One of the problems with blogs for advertisers is their fragmented nature: to get a reach comparable to mainstream media generally involves faffing around with dozens of sites. The obvious solution is to bundle, and that's precisely what Federated Media Publishing does. As its roster of blogs indicates, it operates mainly in the field of tech blogs, but the model can clearly be extended.

To the average blog-reader on the Clapham Ominibus (probably the 319 these days), more interesting than the business side of things is the possibility of doing blog mashups. And lo and behold, Federated has produced such a thing (note that the URL begins significantly with "tech", hinting of non-tech things to come...).

What struck me about this federated news idea is that it could be extended beyond the bundles. It would be easy - well, easy if you're a skilled programmer - to knock up a tool offering a range of newspage formats that let you drag and drop newsfeeds into predefined slots to produce the same kind of effect as the Federated Media/Tech one.

RSS aggregators already do this crudely, but lack the design element that would help to make the approach more popular. You would also need some mechanism for flagging up which stories had changed on the page, or for allowing new stories from designated key blogs to rise to the top of the dynamically-generated newspage.

The result, of course, is the Daily Me that everyone has been wittering on about for years. But it comes with an important twist. This Daily Me 2.0 is not just a cosmetic mixing of traditional medium news, but a very different kind of online newspage, based on the very different perspective offered by blogs.

One reason why Daily Me 1.0 never took off was because traditional media are simply too greedy to contemplate sharing with anyone else. Blogs have no such qualms - indeed, they have different kinds of sharing (quotations, links, comments) at their core. I think we'll be reading more about this....