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Illegal Online Ads: Google Settles Federal Case for $500 Million

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August 25, 2011
  • In a case that indicates the U.S. government will hold websites liable for any illegal advertisements shown on their pages, Google settled its case over illegal online pharmacy ads by paying a $500 million fine.
  • The investigation (first revealed in May) led to this week’s settlement that has reportedly decreased Google’s quarterly profits by 22 percent.
  • “The Department of Justice will continue to hold accountable companies who in their bid for profits violate federal law and put at risk the health and safety of American consumers,” said Deputy Attorney General James M. Cole. “This settlement ensures that Google will reform its improper advertising practices with regard to these pharmacies while paying one of the largest financial forfeiture penalties in history.”
  • “Obviously, such a decision has far-reaching consequences beyond those of just the illegal pharmacies, as Google faces threats from a number of illegal and malicious entities who want to leverage its search engine to expose unsuspecting users to their ads,” reports TechCrunch. “Traditionally, Google itself has filed lawsuits against advertisers it suspected of breaking its rules, but this has clearly not been enough of a deterrent.”

MySpace Founder Believes Google+ has Facebook on the Defensive

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August 8, 2011
  • Tom Anderson, former founder and president of MySpace, details the key advantages Google+ has over Facebook in a recent guest post on TechCrunch.
  • Anderson suggests Google+ can attract game developers by taking a smaller cut, and may not need any advertising at all. “Google has plenty to gain without ever showing an ad and, put simply, Google doesn’t need the money,” writes Anderson. “Facebook’s got to know this, and it’s got to have them just a little bit concerned.”
  • Facebook is testing out a “real-time” feed, as opposed to its current default “Top News” algorithm (which Anderson has criticized). Facebook is having to deal with complaints from advertisers and app developers. “It seems that the ‘Top News’ stream is killing the virality of advertisers ‘content’ and of apps that are trying to find new users,” he adds.
  • Anderson addresses Google’s decision to block business accounts and suggests both companies have some challenging decisions to make: “How do they balance what’s best for the regular guy (you & me), advertisers (big brands), small local businesses (who can never afford the big spend), platform developers with non-competing services (games & music, which it appears FB won’t get into) and platform developers with potentially competitive services (like business networking and dating, which FB/G+ may want to get into themselves someday).”
  • “Over the long haul (5-10 years), the company that makes the right choices in these areas may just end up winning,” he concludes.

New York Billboard Offers Interactivity, Powered by Twitter

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August 2, 2011
  • Jell-O has unveiled a Twitter-powered billboard on the corner of West Broadway and Grand in New York City, enabling consumers to serve as active participants in the company’s advertising.
  • The billboard features an enormous distorted face that appears happy or sad depending on the number of positive or negative emoticons posted via Twitter.
  • It is essentially an outdoor physical version of Jell-O’s Pudding Face website, and is paired with a campaign that distributes coupons to cheer up random downcast Twitter users “whenever overall smileyness dips below 50 percent.”
  • The billboard, from ad agency Crispin Porter + Bogusky, went up last week.

Op-Ed: The Internet Cannot Remain Free Forever

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July 28, 2011
  • Brian Barrett of Gizmodo provides a compelling and timely opinion piece that addresses various issues related to the current and future cost structure of online media (“The Biggest Lie the Internet Ever Told: Free Everything, All the Time”).
  • Barrett’s post reminds us that the Internet is still in its infancy — and online media is still essentially in beta, and as it continues to grow we should accept that not all content can remain available for free.
  • We’ve seen an interesting collection of revenue and advertising models in recent years that were designed to keep up with online media distribution and related technological advances (all of which are really still in beta form) — as well as a steadily climbing level of consumer demand.
  • Barrett points out that in order to move forward we may need to recognize the need for paid subscriptions and get past the philosophy that everything on the Internet is meant to be free.
  • He cites recent examples of online media approaches that have drawn criticism (“each one a flaming arrow launched straight at the heart of free”), such as Hulu Plus, the New York Times paywall, the TIME magazine paywall, and Fox’s recent decision to delay new episodes from streaming.

Entertainment Media Companies Not Ready for Digital Opportunities?

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July 18, 2011
  • Most media and entertainment company senior execs believe they are not fully leveraging customer data that would make it possible to deliver customized content, suggests a new study by consulting firm Accenture.
  • The research indicates that 91 percent of these executives are not taking full advantage of the data, and as a result, are not adequately prepared to identify revenue opportunities related to current and future digital technologies. Additionally, 95 percent do not have strong digital customer relationship management capabilities.
  • If fewer than 10 percent of the companies have a fully integrated view of their digital consumers, a new operating model may be necessary for sustainable digital growth (Accenture recommends a shift from legacy vertical, channel-oriented structures toward a horizontally-layered operating model).
  • Only 55 percent said their companies had a clearly defined social networking strategy in place, while 80 percent believe the industry is still in a state of flux. And 42 percent anticipate that advertising will serve as their main source of revenue in the next two years.
  • Accenture’s “Global Media & Entertainment High Performance Study” canvassed 130 executives across Europe, North America, South America and Asia Pacific from industries including television, gaming, film, music, publishing, portals and advertising.

Virtual Advertising Finds its Way into TV Syndication

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July 8, 2011
  • Virtual advertising is making its way into re-runs.
  • An episode of “How I Met Your Mother” (that originally ran on CBS in March 2007) recently aired in syndication featuring a magazine cover that mentions a new movie, “Zookeeper.”
  • The Kevin James comedy that appears in the four-year-old episode premieres today.
  • The digital ad is an example of “virtual advertising” that inserts messages into video that wasn’t originally there — not a new technology, but perhaps an interesting approach for repurposed content.
  • The article includes links to images before and after the digital insertion.

Amazon Launches Ad Network in Partnership with Triggit

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June 29, 2011
  • Amazon announced it is now selling ads using data it has collected from its shoppers.
  • “The e-commerce giant has started what is effectively an ad network where it buys Web advertising inventory and resells it to marketers at a premium.”
  • Amazon is using Demand Side Platform (DSP) technology from San Francisco-based ad tech company Triggit.
  • Its partnership with Triggit enables Amazon to track users with cookies and feed them a custom ad.
  • The approach has the potential to track the ad from the user to an actual purchase on Amazon.

Immersive Labs Introduces Recognition Software for Targeted Billboard Ads

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May 4, 2011

Manhattan start-up Immersive Labs is introducing artificial intelligence software created to analyze viewers of digital billboards in order to customize “smarter” messages with targeted ads. The system takes into account age, gender and facial features of passers-by as well as environmental conditions and online data (on a cold day, for example, imagine targeting ads for a hot cup of coffee at a nearby Starbucks). The company has already tested the ads in New York’s Sony Style Store, and has plans for a Hudson News Kiosk in John F. Kennedy Airport.

Facial recognition is not new, nor is the ability to detect the composition of a crowd, but Immersive uses the information to deliver targeted advertising based on these characteristics teamed with online information (such as whether a nearby sporting event has recently concluded). Additionally, the software considers other local data including weather conditions and social media updates from sites like Twitter. It also measures how long someone looks at the billboard. According to Immersive Labs, by collecting data the software actually “learns” and improves over time.

For those worried about the “creepiness” factor, Immersive CEO Jason Sosa explains that mapping facial recognition is strictly anonymous. “We take privacy very seriously,” he says. “The information we’re collecting is purely numerical. It’s nothing that’s going to be identified to any one individual person.”

Immersive Labs emerged from TechStars, a mentorship-driven seed stage investment program.

Related CNN Money 2-minute video report: “These ads know exactly who you are” (4/13/11)

Related Huffington Post 2-minute video report: “At Immersive Labs, Ads Watch Who Looks At Them” (4/26/11)

Related Network Advertising Initiative study: “Study Finds Behaviorally-Targeted Ads More Than Twice as Valuable, Twice as Effective as Non-Targeted Online Ads” (3/24/10)

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