Yale University Press
Chapter Title: Introduction
Book Title: The Daily You
Book Subtitle: How the New Advertising Industry Is Defining Your Identity and Your
Worth
Book Author(s): Joseph Turow
Published by: Yale University Press. (2011)
Stable URL: http://www.jstor.org/stable/j.ctt5vkx84.4
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The Daily You
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Introduction
At the start of the twenty-first century, the advertising industry is
guiding one of history’s most massive stealth efforts in social profiling.
At this point you may hardly notice the results of this trend. You may
find you’re getting better or worse discounts on products than your
friends. You may notice that some ads seem to follow you around the
internet. Every once in a while a website may ask you if you like a
particular ad you just received. Or perhaps your cell phone has told
you that you will be rewarded if you eat in a nearby restaurant where,
by the way, two of your friends are hanging out this very minute.
You may actually like some of these intrusions. You may feel that
they pale before the digital power you now have. After all, your
ability to create blogs, collaborate with others to distribute videos
online, and say what you want on Facebook (carefully using its
privacy settings) seems only to confirm what marketers and even
many academics are telling us: that consumers are captains of their
own new-media ships.
But look beneath the surface, and a different picture emerges.
We’re at the start of a revolution in the ways marketers and media
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Introduction
intrude in—and shape—our lives. Every day most if not all Americans who use
the internet, along with hundreds of millions of other users from all over the
planet, are being quietly peeked at, poked, analyzed, and tagged as they move
through the online world. Governments undoubtedly conduct a good deal of
snooping, more in some parts of the world than in others. But in North
America, Europe, and many other places companies that work for marketers
have taken the lead in secretly slicing and dicing the actions and backgrounds
of huge populations on a virtually minute-by-minute basis. Their goal is to find
out how to activate individuals’ buying impulses so they can sell us stuff more
efficiently than ever before. But their work has broader social and cultural
consequences as well. It is destroying traditional publishing ethics by forcing
media outlets to adapt their editorial content to advertisers’ public-relations
needs and slice-and-dice demands. And it is performing a highly controversial
form of social profiling and discrimination by customizing our media content
on the basis of marketing reputations we don’t even know we have.
Consider a fictional middle class family of two parents with three children
who eat out a lot in fast-food restaurants. After a while the parents receive a
continual flow of fast-food restaurant coupons. Data suggest the parents, let’s
call them Larry and Rhonda, will consistently spend far more than the
coupons’ value. Additional statistical evaluations of parents’ activities and
discussions online and off may suggest that Larry and Rhonda and their
children tend toward being overweight. The data, in turn, result in a small
torrent of messages by marketers and publishers seeking to exploit these
weight issues to increase attention or sales. Videos about dealing with overweight children, produced by a new type of company called content farms,
begin to show up on parenting websites Rhonda frequents. When Larry goes
online, he routinely receives articles about how fitness chains emphasize
weight loss around the holidays. Ads for fitness firms and diet pills typically
show up on the pages with those articles. One of Larry and Rhonda’s sons,
who is fifteen years old, is happy to find a text message on his phone that
invites him to use a discount at an ice cream chain not too far from his house.
One of their daughters, by contrast, is mortified when she receives texts
inviting her to a diet program and an ad on her Facebook page inviting her to
a clothing store for hip, oversized women. What’s more, people keep sending
her Twitter messages about weight loss. In the meantime, both Larry and
Rhonda are getting ads from check-cashing services and payday-loan companies. And Larry notices sourly on auto sites he visits that the main articles on
the home page and the ads throughout feature entry-level and used models.
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Introduction
His bitterness only becomes more acute when he describes to his boss the
down-market Web he has been seeing lately. Quite surprised, she tells him she
has been to the same auto sites recently and has just the opposite impression:
many of the articles are about the latest German cars, and one home-page ad
even offered her a gift for test-driving one at a dealer near her home.
This scenario of individual and household profiling and media customization
is quite possible today. Websites, advertisers, and a panoply of other companies
are continuously assessing the activities, intentions, and backgrounds of
virtually everyone online; even our social relationships and comments are being
carefully and continuously analyzed. In broader and broader ways, computergenerated conclusions about who we are affect the media content—the
streams of commercial messages, discount offers, information, news, and entertainment—each of us confronts. Over the next few decades the business logic
that drives these tailored activities will transform the ways we see ourselves,
those around us, and the world at large. Governments too may be able to use
marketers’ technology and data to influence what we see and hear.
From this vantage point, the rhetoric of consumer power begins to lose
credibility. In its place is a rhetoric of esoteric technological and statistical
knowledge that supports the practice of social discrimination through
profiling. We may note its outcomes only once in a while, and we may shrug
when we do because it seems trivial—just a few ads, after all. But unless we
try to understand how this profiling or reputation-making process works and
what it means for the long term, our children and grandchildren will bear
the full brunt of its prejudicial force.
The best way to enter this new world is to focus on its central driving
force: the advertising industry’s media-buying system. Media buying involves
planning and purchasing space or time for advertising on outlets as diverse as
billboards, radio, websites, mobile phones, and newspapers. For decades,
media buying was a backwater, a service wing of advertising agencies that was
known for having the lowest-paying jobs on Madison Avenue and for filling
those jobs with female liberal arts majors fresh out of college. But that has
all changed. The past twenty years have seen the rise of “media agencies” that
are no longer part of ad agencies, though they may both be owned by the
same parent company. Along with a wide array of satellite companies that
feed them technology and data, media agencies have become magnets for
well-remunerated software engineers and financial statisticians of both sexes.
In the United States alone, media-buying agencies wield more than
$170 billion of their clients’ campaign funds; they use these funds to
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Introduction
purchase space and time on media they think will advance their clients’
marketing aims. But in the process they are doing much more. With the
money as leverage, they are guiding the media system toward nothing less
than new ways of thinking about and evaluating audience members and
defining what counts as a successful attempt to reach them. Traditionally,
marketers have used media such as newspapers, magazines, radio, billboards,
and television to reach out to segments of the population through commercial messages. These advertisers typically learned about audience segments
from survey companies that polled representative portions of the population
via a variety of methods, including panel research. A less prestigious directmarketing business has involved contacting individuals by mail or phone.
Firms have rented lists of public data or purchase information that suggests
who might be likely customers.
The emerging new world is dramatically different. The distinction between
reaching out to audiences via mass media and by direct-response methods is
disappearing. Advertisers in the digital space expect all media firms to deliver to
them particular types of individuals—and, increasingly, particular individuals—
by leveraging a detailed knowledge about them and their behaviors that was
unheard of even a few years ago. The new advertising strategy involves drawing
as specific a picture as possible of a person based in large part on measurable
physical acts such as clicks, swipes, mouseovers, and even voice commands. The
strategy uses new digital tracking tools like cookies and beacons as well as new
organizations with names like BlueKai, Rapleaf, Invidi, and eXelate. These
companies track people on websites and across websites in an effort to learn
what they do, what they care about, and who their friends are. Firms that
exchange the information often do ensure that the targets’ names and postal
addresses remain anonymous—but not before they add specific demographic
data and lifestyle information. For example:
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your customers’ experience.” To do that, it gleans data from individual
users of blogs, internet forums, and social networks. It uses ad exchanges to
sell the ability to reach those people. Rapleaf says it has “data on 900+
million records, 400+ million consumers, [and] 52+ billion friend connections.” Advertisers are particularly aware of the firm’s ability to predict the
reliability of individuals (for example, the likelihood they will pay their
mortgage) based on Rapleaf ’s research on the trustworthiness of the people
in those individuals’ social networks.
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Introduction
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programs for about one-third of U.S. corporate employees. It gets personal
information about all of them from the human relations departments of
the companies and supplements that information with transactional data
from the manufacturers it deals with as well as from credit companies.
Armed with this combination of information, Next Jump can predict what
people want and what they will pay for. It also generates a “UserRank”
score for every employee based on how many purchases a person has made
and how much he or she has spent. That score plays an important role
in determining which employee gets what product e-mail offers and at
what price.
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technology to online periodicals. If a Boston Globe reader who reads a lot
of soccer sports news visits a Dallas Morning News site, the Daily Me’s
technology tells the Dallas Morning News to serve him soccer stories.
Moreover, when an ad is served along with the story, its text and photos are
instantly configured so as to include soccer terms and photos as part of the
advertising pitch. A basketball fan receiving an ad for the same product will
get language and photos that call out to people with hoop interests.
These specific operations may not be in business a few years from now. In
the new media-buying environment companies come and go amid furious
competition. The logic propelling them and more established firms forward,
though, is consistent: the future belongs to marketers and media firms—
publishers, in current terminology—that learn how to find and keep the most
valuable customers by surrounding them with the most persuasive media materials. Special online advertising exchanges, owned by Google, Yahoo!, Microsoft,
Interpublic, and other major players, allow publishers to auction and media
agencies to “buy” individuals with particular characteristics, often in real time.
That is, it is now possible to buy the right to deliver an ad to a person with
specific characteristics at the precise moment that that person loads a Web page.
In fact, through an activity called cookie matching, which I discuss in detail
later, an advertiser can actually bid for the right to reach an individual whom
the advertiser knows from previous contacts and is now tracking around the
Web. Moreover, the technology keeps changing. Because consumers delete Web
cookies and marketers find cookies difficult to use with mobile devices, technology companies have developed methods to “fingerprint” devices permanently and allow for persistent personalization across many media platforms.
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Introduction
The significance of tailored commercial messages and offers goes far
beyond whether or not the targeted persons buy the products.
Advertisements and discounts are status signals: they alert people as to their
social position. If you consistently get ads for low-priced cars, regional vacations, fast-food restaurants, and other products that reflect a lower-class
status, your sense of the world’s opportunities may be narrower than that of
someone who is feted with ads for national or international trips and luxury
products. Moreover, if like Larry and Rhonda you happen to know that your
colleague is receiving more ads for the luxury products than you are, and
more and better discounts to boot, you may worry that you are falling
behind in society’s estimation of your worth.
In fact, the ads may signal your opportunities actually are narrowed if
marketers and publishers decide that the data points—profiles—about
you across the internet position you in a segment of the population that is
relatively less desirable to marketers because of income, age, past-purchase
behavior, geographical location, or other reasons. Turning individual profiles
into individual evaluations is what happens when a profile becomes a reputation. Today individual marketers still make most of the decisions about
which particular persons matter to them, and about how much they matter.
But that is beginning to change as certain publishers and data providers—
Rapleaf and Next Jump, for example—allow their calculations
of value to help advertisers make targeting decisions. In the future, these
calculations of our marketing value, both broadly and for particular products, may become routine parts of the information exchanged about people
throughout the media system.
The tailoring of news and entertainment is less advanced, but it is clearly
under way. Technologies developed for personalized advertising and coupons
point to possibilities for targeting individuals with personalized news and
entertainment. Not only is this already happening, the logic of doing that is
becoming more urgent to advertisers and publishers. Advertisers operate on
the assumption that, on the internet as in traditional media, commercial
messages that parade as soft (or “human interest”) news and entertainment
are more persuasive than straightforward ads. Publishers know this too, and
in the heat of a terrible economic downturn even the most traditional ones
have begun to compromise long-standing professional norms about the
separation of advertising and editorial matter. And in fact many of the
new online publishers—companies, such as Demand Media, that turn out
thousands of text and video pieces a day—never really bought into the
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Introduction
old-world ideas about editorial integrity anyway. What this means is that we
are entering a world of intensively customized content, a world in which
publishers and even marketers will package personalized advertisements with
soft news or entertainment that is tailored to fit both the selling needs of the
ads and the reputation of the particular individual.
The rise of digital profiling and personalization has spawned a new
industrial jargon that reflects potentially grave social divisions and privacy
issues. Marketers divide people into targets and waste. They also use words
like anonymous and personal in unrecognizable ways that distort and drain
them of their traditional meanings. If a company can follow your behavior in
the digital environment—an environment that potentially includes your
mobile phone and television set—its claim that you are “anonymous” is
meaningless. That is particularly true when firms intermittently add off-line
information such as shopping patterns and the value of your house to their
online data and then simply strip the name and address to make it “anonymous.” It matters little if your name is John Smith, Yesh Mispar, or 3211466.
The persistence of information about you will lead firms to act based on
what they know, share, and care about you, whether you know it is
happening or not.
All these developments may sound more than a little unsettling; creeped
out is a phrase people often use when they learn about them. National
surveys I have conducted over the past decade consistently suggest that
although people know companies are using their data and do worry about it,
their understanding of exactly how the data are being used is severely
lacking. That of course shouldn’t be surprising. People today lead busy, even
harried, lives. Keeping up with the complex and changing particulars of
data mining is simply not something most of us have the time or ability to
do. There are many great things about the new media environment. But
when companies track people without their knowledge, sell their data
without letting them know what they are doing or securing their permission,
and then use those data to decide which of those people are targets or waste,
we have a serious social problem. The precise implications of this problem
are not yet clear. If it’s allowed to persist, and people begin to realize how
the advertising industry segregates them from and pits them against others in
the ads they get, the discounts they receive, the TV-viewing suggestions
and news stories they confront, and even the offers they receive in the supermarket, they may begin to suffer the effects of discrimination. They will
likely learn to distrust the companies that have put them in this situation,
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Introduction
and they may well be incensed at the government that has not helped to
prevent it. A comparison to the financial industry is apt. Here was an
industry engaged in a whole spectrum of arcane practices that were not at all
transparent to consumers or regulators but that had serious negative impact
on our lives. It would be deeply unfortunate if the advertising system
followed the same trajectory.
Despite valiant efforts on the part of advocacy groups and some federal
and state officials, neither government rulings nor industry self-regulation
has set policies that will address these issues before they become major
sources of widespread social distress. Part of the reason for the lack of action
may be that neither citizens nor politicians recognize how deeply embedded
in American life these privacy-breaching and social-profiling activities are.
Few individuals outside advertising know about the power of the new mediabuying system: its capacity to determine not only what media firms do but
how we see ourselves and others. They don’t know that that system is
working to attach marketing labels to us based on the clicks we make, the
conversations we have, and the friendships we enjoy on websites, mobile
devices, iPads, supermarket carts, and even television sets. They don’t know
that the new system is forcing many media firms to sell their souls for ad
money while they serve us commercial messages, discounts, and, increasingly, news and entertainment based on our marketing labels. They don’t
realize that the wide sharing of data suggests that in the future marketers and
media firms may find it useful to place us into personalized “reputation silos”
that surround us with worldviews and rewards based on labels marketers
have created reflecting our value to them. Without this knowledge, it is hard
to even begin to have broad-based serious discussions about what society and
industry should do about this sobering new world: into the twenty-first
century the media-buying system’s strategy of social discrimination will
increasingly define how we as individuals relate to society—not only how
much we pay but what we see and when and how we see it.
Until now, the advertising industry’s new media-buying processes have
been virtually hidden to all but a relatively few practitioners in the field. No
books have been written about the business, and while some excellent trade
publications follow its developing story continuously, the particulars they
present are more or less opaque to those outside the industry. A few experts
in the media-buying field, in fact, told me that they don’t try to explain the
details of what they do to their clients, the advertisers, or their bosses in the
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Introduction
upper reaches of their advertising agencies. They simply wouldn’t grasp it.
All the clients and the bosses care about, these media buying experts added,
is whether they reach their targets with an appropriate return on investment.
But from a consumer perspective, from the standpoint of a society aiming
for transparency and fairness, this black-box approach is not acceptable. We
need to understand the industrial forces that are defining our identities, our
worth, and the media environments we inhabit so that we can decide what,
if anything, to do about them. Academics, advocates, and government
leaders must know enough about this business and its workings to be able
to ask hard questions and formulate realistic policy suggestions when they
are needed.
The aim of this book, then, is to describe the brave new world that is
the media-buying system, especially as it relates to the internet and emerging
digital technologies. The chapters that follow detail the media-buying
system’s tangled history, reveal its logic and operations, identify the problems
it poses for individuals and society, and suggest solutions. Chapter 1 starts by
challenging the common assertion, made not only by marketers but by many
academics, that the consumer is king in the new media environment. This
idea is most closely associated with Nicholas Negroponte’s pioneering and
still influential account of The Daily Me. In his 1995 best seller, Being Digital,
Negroponte predicted that the power of digital media would give citizens
an unprecedented degree of control over their media environments. He
illustrated this new control with the hypothetical example of The Daily Me,
an online newspaper whose content would be customized to suit the interests and beliefs of individual readers. Many years later, as I show here, the
content customization that Negroponte predicted is taking off. The crucial
difference, however, is that much of the content is not being customized and
personalized by consumers themselves. Advertisements, discounts, information, and entertainment are increasingly customized by a largely invisible
industry on the basis of a vast amount of information that we likely don’t
realize it is collecting as a result of social profiles and reputations it assigns us
and never discloses, and about which we are likely ignorant.
This book attempts to address this knowledge and power imbalance. By
looking under the hood of the internet and other digital media, we see that
media buyers play key roles in whether, when, and how people’s worth is
constructed in that world. To recognize such immense power is not to deny
the spaces and opportunities for freedom, participation, and creativity that
several scholars identify in the new environment. But it does make clear that
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Introduction
the ruthlessly commercial logic and obscure social profiling practices of the
new media-buying system are what dominate the emerging digital world.
Why and how did the system develop? The first chapter finds answers in
the rise of huge agency conglomerates in the United Kingdom, United
States, and France during the 1980s and 1990s. They separated media planning and buying from their historical roles within the ad agency and made
them stand-alone businesses. That led to new “media agencies” that
competed with one another for clients by stressing their ability to evaluate
and predict consumer responses with sophisticated statistics. When the
internet came along, they saw its interactive environment as terrific terrain
for expanding their numerical understanding of audiences—and for using
the measures and labels directly to sell products.
Chapter 2 describes how two technological innovations, “the click” and
“the cookie,” became the key mechanisms around which media buyers,
marketers, technology firms, and online publishers (that is, firms that create
or distribute news, information, or entertainment) planned their digital
future. They tried to develop mutual understandings of how to measure
the number of people at particular online sites and evaluate the worth of the
people and the sites to marketers. The click provided marketers with a way
to directly track individuals’ actions with ads and other content. The cookie
allowed publishers and marketers to recognize a computer—and sometimes a
person—with which they had previous interactions. It also allowed them to
store information about targets’ movements across thousands of websites.
With the click and the cookie as a start, media buyers and their allies placed
a key proposition at the heart of the new system: help marketers identify
measureable ways to know, target, and consider the impact of commercial
messages on audiences as never before, even in the face of vocal public
worries about privacy invasion.
Chapter 3 shows how the compulsion to learn increasing amounts of
information about online individuals escalated as the near-manic desire by
online publishers to prove their utility to media buyers continued into the
2000s. This trend coincided particularly with the rise of Google’s search
engine. Unlike the approach of most publishers, which charged a fee for the
display of an ad, Google charged advertisers only if an individual clicked on
an ad adjacent to the search results. Media buyers agreed with Google’s claim
that consumers’ keywords were insights into their direct interests. Moreover,
Google’s pitch that clicking on an ad was a significant indicator of individual
consumers’ interest fit exactly with advertisers’ increasing insistence on direct
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Introduction
measurability. The search engine quickly garnered more than half of the
money advertisers spent online. As thousands of publishers worked furiously
to attract advertisers in order to win some of the other 50 percent of the
media buyers’ spending with new forms of display advertising, they turned
for help to new types of organizations—online ad networks, data providers,
and data exchanges. These companies promised to help them boost revenues
by presenting advertisers with yet more information about the individuals in
their audiences. In the interest of raising publishers’ rates with advertisers,
publishers asked visitors to register, tracked them, bought information about
them, shared much of it (often anonymously) with advertisers, and affiliated
with networks of sites that claimed to help advertisers reach their targeted
individuals wherever they went.
Chapters 4, 5, and 6 describe how the contemporary business of profiles
and valuations of individuals is escalating in unprecedented ways. Chapter 4
shows how marketers increasingly use databases to predict which of the two
classifications (target or waste) they should use to categorize particular
Americans. Those considered waste are ignored or shunted to other products
the marketers deem more relevant to their tastes or income. Chapter 5
explores how media buyers’ pressures are leading publishers to accept the
idea of customizing news and information based on the characteristics
of people that advertisers would want to see. The chapter suggests how
consistently shared notions of profiled individuals will lead publishers and
advertisers to place anonymous persons they reach into “reputation silos.”
The content that they will stream to these individuals will have different
values based on marketers’ evaluation of their lifestyles, offline and online
activities, social relationships, and demographics.
These activities aren’t tied to the Web. As Chapter 6 shows, they are
spreading quickly to other digital media. Although social-media and gaming
sites such as Facebook and Pogo have their roots in the traditional Web, their
use outdoors is exploding with the rapid spread of multimedia mobile
devices. Not surprisingly, these devices are a particularly fertile arena for
tracking in the interest of sales and services. The competition for digital
dominance in a social-media world is even affecting the biggest medium of
all, the home television set. This chapter discusses a mini-industry of companies that exist to analyze social relationships on the Web and elsewhere and
to predict which individuals are worth pursuing for what products and with
what incentives. The aim is to help marketers follow the targeted individuals
across as many geographical locations and devices as possible. The ultimate
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Introduction
goal is to pinpoint a consumer with a particular reputation, decide what
offers to surround her or him with, and track the results. Call that tracking
the long click. It means, for example, being able to follow a person’s response
from the initial presentations of a product in Web ads through a gauntlet of
purposeful marketing encounters: an article sent to her that integrates the
product into the piece; a commercial extolling the product sent to that
person on her home TV when she is watching; and discount offers for the
product based on the individual’s location as determined via her mobile
phone. The target’s ultimate purchase of the product with a swipe of a
frequent-shopper card, credit card, or debit card identifies a marketing
success—and gets the individual to offer up still more data for various parties
to add to the person’s profiles and reputations.
Chapter 7 crystallizes the social and policy issues these and related activities raise. Social discrimination via reputation silos may well mean having
sectors of your life labeled by companies you don’t know, for reasons you
don’t understand, and with data that you did not give any permission to use.
Do your eating habits suggest you will soon spend a lot on health care? What
do your age, income, and lifestyle indicators suggest about the value of cultivating you as a cruise line customer—and what do they imply about the
minimum discount that you would need to purchase a cruise? What does
your household profile suggest about the kinds of commercials your children
should receive? What does your Facebook page suggest about your reliability
as an employee, or as a borrower? The questions will be as varied as advertisers’ interests, and as detailed as the data they can garner about us.
National surveys I have conducted suggest that Americans firmly reject this
direction of marketing and media when they are made aware of it. What, then,
should be done? Is industry self-regulation sufficient to achieve the kind of
information respect individuals suggest they want, or are national regulations
necessary to ensure it? I address these questions in Chapter 7. My argument is
that a mixture of responsible industry initiatives and government laws is necessary if we are to develop a twenty-first century communication environment
that reflects the openness of the democracy we would like our society to be.
Before getting to policy matters, though, the particulars that drive this
important debate need to be laid out. How have we gotten to the point of
worrying about how marketers shape our digital reputation? What exactly
are the processes that ought to concern us, and how do they operate? The
answers are part of a compelling story that begins with the academic, business, and public fascination with the internet’s potential.
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Robert McChesney, Digital Disconnect, Ch. 5: The Internet and Capitalism II - Excerpt
146
digital disconnect
Copyright © 2014. The New Press. All rights reserved.
Our Master’s Voice—Loud and Clear?
1934 book by exadman James Rorty,
Our Master's Voice
In 1934 journalist and ex-adman James Rorty’s seminal work, Our Master’s
Voice: Advertising, was published. This was a historical moment when advertising was relatively unpopular and more than a little controversial. Reformers were marshaling widespread antipathy to broadcast advertising in
their campaign to establish a large nonprofit and noncommercial sector in
American radio. Radio inventor Lee DeForest so detested broadcast advertising and its “moronic fare” that in the early 1930s he attempted to invent a
device that would automatically mute radio advertisements and then return
the volume to audible levels when the programming resumed.99 The consumer movement, as Inger L. Stole has chronicled, organized campaigns
for federal laws that would provide rigorous regulation of advertising so that
it would provide accurate and useful information to consumers, not propaganda to confuse them.100 Rorty’s jeremiad against his former profession
ultimately came down to one crucial point: advertising was the voice of corporations and the wealthy who owned them; its ultimate effect was to spawn
a culture that cemented their power. In particular, its role as paying the piper
gave the masters control over the very media system a free people required to
address corporate power.101
This radical critique of advertising and the attendant political movements
receded from public view in the postwar decades, but advertising remained
largely suspect, fodder for comedy due to its insincerity, absurdity, and asininity, as piles of Mad magazines or parodies on Saturday Night Live attest.
Meanwhile, considerable scholarship examined the dubious contribution
of advertising to the content of American entertainment and journalism.
When the Internet emerged, the notion that it would be a distinctly noncommercial space was uncontroversial and widely embraced. I was there
and I can tell you that in the early 1990s no one was bellyaching about a
lack of advertising on the Internet, or a shortage of advertising anywhere else
for that matter.
but the notion of a commercial-free Internet was quickly challenged in
the 1990s on two fronts. First, major advertising corporations, Rorty’s “masters,” were alarmed by the idea that they could not effectively market their
products to prospective consumers online. Procter & Gamble CEO Edwin
Artzt had the “chilling thought,” as Joseph Turow chronicles in his superb
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book The Daily You, “that emerging technologies were giving people the
opportunity to escape from advertising’s grasp altogether.” by the mid-1990s,
Artzt had made this a central concern, and he implored major advertisers to
respond to the threat of the Internet in the same way advertising had conquered previous media: “Let’s grab all this new technology in our teeth once
again and turn it into a bonanza for advertising.” 102
One way to make the Internet more ad-friendly would be to support the
creation of technical standards for cookies, small files secretly downloaded
to users’ computers that would make it possible to track Internet users surreptitiously and create profiles of their activities so as to segment them for
marketing. Websites could then “quietly determine the number of separate
individuals entering various parts of their domains and clicking on their
ads.103 The counterculture types at the Internet Society’s Internet Engineering Task Force had an adverse reaction, offering a proposal that cookies
“should be shut off unless someone decides they’re willing to accept them.”
This standards battle became the first policy fight over advertising. As one ad
industry executive said, “What concerns us is the tone of the proposal, which
is that advertising is not good for us, so we want to avoid it.” Netscape and
Microsoft bowed to the commercial pressures in designing their Web browsers.104 Though scholars, activists, and Internet purists expressed alarm about
invasions of privacy, in one fell swoop, the nature and logic of the Internet
had been turned on its head—though it would not be fully apparent for at
least a decade.105
but this still did not solve the problem. Most of the corporate advertising
done online in the late 1990s was ineffectual. One expert termed the clickthrough rates on Internet ads as “miserable,” less than one half of one percent.106 Maybe the idealists were right and the Internet simply was not going
to be a sales medium because users could not be held hostage.
The second factor behind the drive to make advertising effective online
was the need to have a source of revenue for online content and services.
The idea of converting the computers into vending machines and having a
pay-per-view system was unrealistic for the foreseeable future. On the one
hand, the Internet founders would never approve such a radical change in
the system, nor would the public, as it had already tasted the openness of
the Web. On the other hand, if websites tried to sell access to their content,
usage tracking quickly established that most Internet users would ignore
those sites and move on to the infinite world of free content. A handful of
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digital disconnect
prominent brands like the Wall Street Journal or ESPN might make a go of
it, but for everyone else, fuhgetaboutit. As all the other alternatives stepped
backward, advertising was left as the only answer to the question of how
the commercial Internet could be funded. The emergence of widespread
broadband early in the 2000s helped the cause a lot; now advertising could
use compelling audiovisual messages as on television. Tools for surreptitious
monitoring, like cookies, were augmented and dramatically improved. but
the problem remained: how to get people to pay attention to and respond
to the commercials; all hands were summoned to the task. “The best minds
of my generation,” an early Facebook employee told The Atlantic’s Alexis
Madrigal, “are thinking about how to make people click ads.” 107
The great development in recent years has been the emergence of advertising that targets people based upon detailed information gleaned surreptitiously from their Internet activities. “What was once an anonymous
medium where anyone could be anyone,” Eli Pariser wrote in 2011, “is now
a tool for soliciting and analyzing our personal data.” 108 u.S. Internet advertising totaled $40 billion in 2012—topping the total amount going to all
print media for the first time—and was expected to increase to as much as
$60 billion in 2014 and then $80 billion annually by 2016.109 borrell Associates estimates that ads placed on mobile apps will increase from $1.25 billion in 2011 to $21.2 billion in 2016.110 (The united States accounts for just
under one half of global Internet advertising.111) Internet advertising is on an
explosive trajectory to gobble up an ever increasing portion of all advertising expenditures for the foreseeable future, and television advertising, to the
extent it remains distinct, is becoming much more like Internet advertising.
Nothing exemplifies this emergence of advertising on the Internet more
than the meteoric rise of Google. Google search advertising accounts for
one half of all u.S. Internet advertising revenues—the other type of online
advertising is called display advertising—and Google generated $36 billion in global ad revenue in 2011.112 It has taken the logic of commercial
broadcasting—“If you’re not paying for something, you’re not the customer;
you’re the product being sold”—and elevated it to unimagined heights.113
Or, as bruce Schneier puts it, “Google has great customer service. Problem
is, you’re not the customer.” 114 With scores of distinct Internet services collecting data on people online, Google can target advertising as no other firm
has ever been able to do.
Except for Facebook. beyond the hubbub surrounding its dramatic 2012
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IPO, with its equally dramatic ascension and decline, something extraordinary is occurring with social media. Facebook is “more than the world’s
largest social network, it is a fast-churning data machine that captures and
processes every click and interaction on its platform.” 115 by 2011 Facebook
became the first website with a trillion page views in a month. More than
half of its more than one billion users check it every day; in America half of
eighteen- to thirty-four-year-olds check it within minutes of waking up, and
28 percent do so before getting out of bed. Americans spend, on average,
20 percent of their online time exclusively on Facebook. In a single day,
300 million photographs are uploaded; on the weekend, the figure jumps
to 750 million.116 “Facebook will have more traffic than anyone else, and
they’ll have more data than anyone else,” one investment analyst observed
in 2012. “So, unless they are impervious to learning how to monetize that
data, they should be the most valuable property on the Internet, eventually.” 117 Corporate America is excited to burrow its way into this mother lode
of data. “We’re going to get a ton of new ideas,” Frito-Lay’s North American
chief marketing officer stated.118 “Facebook is unilaterally redefining the social contract,” Lori Andrews writes, “making the private now public and the
public now private.” 119
The digital advertising industry goes far beyond Google and Facebook.
Turow documents how Madison Avenue ad agencies have been reconfigured so that media buying, once the somewhat perfunctory function of locating media to place ads, has become arguably the most important part of
the operation. Moreover, Google, Microsoft, yahoo!, and AOL have each
established advertising networks to place advertising on websites. This big
Four accounted for 28 percent of online display ad revenue in 2008.120
Gathering as much information as possible on Internet users and knowing where to reach them online is the key to securing ad dollars. Turow
calls it “one of history’s most massive efforts in stealth marketing.” 121 Our
era has come to be “epitomized by big Data,” a report in The Guardian
states.122 “Personal data is the oil of the information age,” writes a New York
Times reporter.123 “Every day most if not all Americans who use the Internet,”
Turow notes, “are being quietly peeked at, poked, analyzed, and tagged as
they move through the online world.” 124 The online advertising industry,
says Jeff Chester, has turned the Internet into “a digital data vacuum cleaner
on steroids.”
And it’s not just Google or Facebook or the ISP cartel tracking people.125
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“your smooth new iPhone knows exactly where you go, whom you call, what
you read,” Pariser writes. “With its built-in microphone, gyroscope, and GPS,
it can tell whether you’re walking or in a car or at a party.” 126 Two investigative reporters for ProPublica concluded their examination of smartphones by
writing, “Let’s stop calling them phones. They are trackers.” 127 A 2010 Wall
Street Journal investigation of 101 smartphone apps for Apple iPhone and
Android found that 56 of these apps “transmitted the phone’s unique device
ID to other companies without users’ awareness; 47 transmitted the phone’s
location in some way,” and 5 sent “age, gender and other personal details
to outsiders.” 128 On the Internet, the Wall Street Journal concluded, businesses know immense amounts about individuals, who remain “anonymous
in name only.” 129
In fact, it is more accurate to say that the Internet is swarming with mostly
anonymous and unaccountable companies tracking anything that moves.
The Wall Street Journal examination determined that the top fifty websites in
the united States installed, on average, sixty-four pieces of tracking technology on the computers of visitors.130 In 2012 The Atlantic’s Madrigal investigated who exactly was monitoring his online activities over a thirty-six-hour
period. he discovered there were 105 companies that were tracking him and
collecting data. Many of the companies were collecting the data to sell to
other companies. “Right now,” he concluded, “a huge chunk of what you’ve
ever looked at on the Internet is sitting in databases all across the world.”
What individual anonymity that remains is little consolation to Madrigal.
“The results of this process are ineluctable. Left to their own devices, ad
tracking firms will eventually be able to connect your various data selves.
And then they will break down the name wall, if they are allowed to.” 131 A
month after Microsoft purchased Skype in 2011, Microsoft patented a “legal
intercept” technology that could “silently copy” every communication done
on VOiP services like Skype. Microsoft refuses to say whether the technology is integrated into Skype’s architecture.132
Viktor Mayer-Schönberger regards this as nothing less than a “redistribution of information power from the powerless to the powerful.” 133 The
greatest fear of Schneier’s—arguably the leading global expert on computer
security—is not cyberterrorism, cybercrime, identity theft, WikiLeaks, or illegal downloads of music and hollywood films. According to the New York
Times, it is “ubiquitous surveillance” conducted by “private companies and
government agencies advancing their own interests, whether for surveillance
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or commerce.” 134 “you need to know one simple truth,” investigative journalist David Rosen wrote after a detailed examination of the subject: “you
have no privacy with regard to your electronic communications. Nothing
you do online, via a wireline telephone or over a wireless device is outside
the reach of government security agencies and private corporations.” 135
“Given enough data, intelligence and power,” one technology journalist
said, “corporations and governments can connect dots in ways that only previously existed in science fiction.” 136 Need it be added that this was invariably dystopian science fiction?
This may be the great Achilles’ heel of the Internet under capitalism:
the money comes from surreptitiously violating any known understanding
of privacy. The business model for Google and Facebook, and to a certain
extent for all Internet firms, as Jaron Lanier put it, requires “a magic formula
to appear in which some method of violating privacy and dignity becomes
acceptable.” 137 As the New York Times’s Keller puts it, the challenge these
firms face is “how to sell us on without creeping us out.” 138 This is not an
issue the Internet giants are keen to open up for public discussion or debate, and for good reason. When Senator Claire McCaskill (D-MO) held a
privacy hearing in 2010, she was astounded to learn how the Internet actually functioned. “I understand that advertising supports the Internet, but I
am a little spooked out,” she said. “This is creepy.” An industry consultant
acknowledged that as marketers pushed ever further into the data, there was
an “ick factor.” 139
Polling data confirms widespread antipathy to online attacks on privacy.
A 2008 survey by Consumer Reports found that “93 percent thought Internet companies should always ask for permission before using personal information, and 72 percent wanted the right to opt out of online tracking.” A
2009 study by Princeton Survey Research Associates found that 69 percent
thought the united States should adopt a law “giving people the right to learn
everything a website knows about them.” 140 A 2012 survey of u.S. smartphone users found 94 percent consider online privacy an important issue
and 55 percent say it is something they think of often. Sixty-two percent of
respondents were aware they were being tracked by advertisers—though not
necessarily aware of the extent of the tracking—but only 1 percent “liked”
being surreptitiously pursued.141 Turow has conducted a series of surveys
over the past seven years and generated similar results. he found that “unlike
what many have suggested, attitudes toward privacy expressed by American
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young adults (age eighteen to twenty-four) are not nearly so different from
older adults.” In short, young people immersed in smartphones and social
media want their privacy too. If the will of people were honored, Internet advertising as it has evolved might be effectively ended.142 The Internet giants
“sell this extremely creepy intrusion as a great boon to your life because they
can tailor services to your needs,” a legal expert in privacy and computer
crime told the New York Times in 2012. “but do most people want to give
that much away? No.” 143
The system appears safe from political challenge, however, and the polling data offers a good part of the answer there too.144 Surveys reveal spectacular ignorance by most Americans about what is actually occurring to
them and their data online. Turow calls the ignorance level “distressing”
and notes that it is worse among younger people and that it has not improved
with increased exposure to the Internet.145 Only a small number of people
are aware, for example, that over half of the roughly 84 data categories Facebook collects about its users are not available for them to see.146 One source
estimates that only 29 percent of the information Facebook possesses on any
given user is available through the site’s tools. Nor is there any right under
u.S. law to ask a company to hand over the information it holds on you.147
When a person follows the online protocol to opt out and thinks she has
stopped data tracking, she has stopped getting targeted ads from only the
one specific company. Data tracking continues unabated and there is no way
to stop being tracked online.148 In part, these misconceptions are due to the
lack of media coverage or political interest in the matter. In part they are due
to the official “privacy statements” of firms like Google and Facebook, which
are worthless. A 2008 study by Carnegie-Mellon researchers concluded that
these privacy statements are “hard to read, read infrequently, and do not
support rational decision making.” 149 “Legal and technology researchers,”
the New York Times reported in 2012, “estimate that it would take about a
month for Internet users to read the privacy policies of all the Web sites they
visit in a year.” 150
by 2010–12, online privacy had become a political issue throughout
Europe, and the FTC had gotten into the game.151 It has probably done
the best it can in unsupportive political terrain, issuing critical reports on
online privacy in December 2010 and March 2012,152 and reaching a settlement with Facebook in November 2011, after accusing the company of
making claims about how it used its data that were “unfair and deceptive,
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and violated federal law.” 153 In August 2012 the FTC fined Google $22 million in a privacy case, but there was no indication this would lead to any
substantive change in Google’s operations.154 As a writer for Slate put it,
the fine amounted to “approximately 0 percent of revenues.” As part of the
settlement, Google did not have to admit to any wrongdoing.155 There is
little evidence at this writing that the FTC or Congress will get much more
aggressive, in large part because of the political power of the Internet giants,
which desperately need to expand their data collection to make profits. Even
under the glare of attention in Europe in 2012, and knowing it would generate criticism, Google instituted a new privacy policy by which it consolidates
all the data from sixty different Google activities into a single database.156
Twitter acknowledged in 2012 that its future was dependent upon addressing
the concerns of advertisers and that this was not an optional course.157
The Internet giants apparently reckon that their political muscle, combined with the importance of the Internet to the economy, makes their datatracking systems untouchable. One investors’ report states that “government
regulations and consumer pushback” over privacy are a, perhaps the, core
threat to Internet advertising.158 As The Economist put it, at this point anything that handcuffed Internet advertising “would severely disrupt the internet economy.” 159 In February 2012, the Obama administration said that
privacy standards were important, but they had to allow “electronic commerce to grow.” 160
In Washington, industry self-regulation is the preferred foundation for
any solution to the privacy issue, and the FTC acknowledges the centrality
of “strong and enforceable self-regulatory initiatives.” 161 Smarter figures in
the Internet community know this is a problem that needs to be addressed
to assuage growing public concerns. “Privacy is a source of tremendous tension and anxiety in big data,” a Microsoft executive acknowledged. “Technologists need to re-engage with regulators.” 162 Microsoft went so far as to
make the FTC’s favored “Do Not Track” the default option in its Internet
Explorer 10 in 2012.163 This works like the Do Not Call registry. This will
not stop tracking, but it might limit some targeted advertising, although the
system seems to be largely voluntary and difficult to enforce. It is a public
relations victory, though, almost certainly sufficient for politicians to go back
to sleep on the matter. The Atlantic’s Madrigal, after going through a maze
of these corporate self-regulatory privacy schemes, came to regard them as
self-serving time wasters.164 If Congress does eventually adopt formal online
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privacy protections, it will do so only in a manner that will get a sign-off from
Google, Microsoft, Apple, and the other giants, according to the New York
Times.165
We should also expect world-class public relations campaigns extolling
all the rights consumers have online, how strong the privacy standards are,
and how wonderful the Internet is, thanks to advertising. It is not going to be
an easy campaign. As The Economist puts it: “Everyone hates digital ads.” 166
A report on digital commerce by Forrester Research led to this conclusion:
“Consumers aren’t saying, ‘Oh, I really want to be able to connect with companies and brands.’ ” 167 Some liberals and progressives will trumpet corporate self-regulation as well, for a variety of reasons.168 Jeff Jarvis, for example,
argues that we should not “become too obsessed with privacy.” A key reason
is that Jarvis admits he is an “apologist of advertising”—even though “most
advertising sucks”—because “advertising is the most visible means of support for journalism and media” online.169 but this attitude raises a question:
is advertising generating sufficiently useful online content to justify the price
people are paying?
The commercial media system online is nascent in some respects and
will not crystallize for many years, so there are unforeseeable twists and turns
ahead. but the preliminary indications are that the relationship of advertising to content production is going to be rather different online than it was for
twentieth-century media, and that Jarvis’s defense is unlikely to apply. Recall
from chapter 3 that during most of the twentieth century, the relationship
of advertising to media was ambiguous. On the one hand, it did provide
the funds that subsidized much of the media on recognized terms. “The
social contract between advertisers and publishers used to be that publications gathered particular types of people into something called an audience,”
Madrigal writes, “then advertisers purchased ads in that publication to reach
that audience.” 170 The same was true for broadcasters. Advertisers were, in
effect, forced to bankroll media content if they wanted to reach their target
audience. because the media firms had leverage in the oligopolistic marketplace, they “often saw value in maintaining credibility with audiences, advocacy groups, and government regulators by adopting policies and principles
that sometimes conflicted with the advertisers’ direct interest in getting the
most for their money.” 171
however, one should not exaggerate how much integrity and commitment to public service these media firms had in their relationships with
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advertisers. It is probably more accurate to say that they had enough leverage
to pursue sufficiently credible editorial policies that protected their longterm profitability by not succumbing to short-term commercial pressures or
opportunities. Moreover, as has been amply demonstrated in the literature,
advertising had a powerful direct and indirect effect on the nature of media
content in the predigital era, often for the worse. It was hardly a form of support that came without strings attached.172
The balance of power began shifting with the emergence of cable and
then satellite television systems, with their plethora of channels. Although
most of the channels were owned by the same handful of conglomerates,
each of the channels still was competing for advertising dollars, so there was
a lot more “supply,” and advertisers now had more options. When digital
video recorders came along, advertisers became concerned that their ads
were going to be skipped over by empowered viewers. Marketers began to
demand and get “product placement” in programs. The media conglomerates were eager to make money, so there was no apparent period of moral
angst as they weighed their options. “branded” entertainment became more
common. This meant “embedding products in the plots of television shows
and movies, making it difficult to ignore them.” 173
The Internet supercharges this tendency, as there are countless websites
chasing after a finite pool of ad dollars. “If publishers of all sorts—print, electronic, digital—want to survive on advertising,” ad agency executive Rishad
Tobaccowala explained to Turow, “they will have to adapt to their advertising
masters’ new demands.” 174 Media firms are aggressively pursuing advertisers
to get programming along these lines, and it is now so common online that
it is barely noticed any longer. “Rather than doing advertising and P.R. only,”
a corporate brand manager working on Web entertainment stated in 2012,
“we are part of the cultural conversation. When you encounter the brand
through entertainment content, the conversation at the water cooler is very
different.” The chief creative officer at bbDO North America said, “hollywood and advertising agencies have tried to work together before, but this
time has been a positive transmogrification to something really different, and
the walls came down, and now there’s this.” 175
In short, the balance of power has shifted, giving advertisers much greater
explicit influence over media content.176 “The new system is forcing many
media firms to sell their soul for ad money,” Turow states.177 This on its own
is an astonishing development that, according to most scholarship, portends
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digital disconnect
grave consequences for the quality and nature of journalism and entertainment media.
but that is hardly the worst of it. The Internet has not simply made media
outlets more desperate to please advertisers; it has made them increasingly
irrelevant. “Marketers haven’t ever wanted to underwrite the content industry,” Tobaccowala told Turow. “They’ve been forced.” 178 Those days are over.
“Advertisers are increasingly indifferent to the context in which messages
appear” online, “at least compared with other media,” the Pivotal Research
Group reported in 2012.179 Online media—or “publishers” in the emerging
vernacular—no longer sell many of the ads appearing on their websites.180
“up to 80% of interactive ads are sold and resold through third parties,” one
industry source reports, “and advertisers don’t always know where their ads
have run.” 181 Turow notes that the evidence suggests that in an environment
where advertisers purchase ads in real time (meaning they appear almost immediately), reaching untold numbers of target demographic members, they
are mostly indifferent to the quality of the surrounding content on any of
the thousands of places their ads might instantly appear. The system allows
advertisers to “buy” desired individuals “automatically, and in real time, on
whatever page they’ve landed.” 182 As Madrigal puts it, “Now you can buy
the audience without the publication.” 183 Media in the traditional sense are
almost unnecessary.
In 2003 digital publishers “received most of every dollar advertisers spent
on their sites,” Pariser reports. In “2010, they only received $.20.” 184 The
missing 80 percent was going to ad networks and people who handle data.
For publishers who want to attract ads, it is becoming more important to
have quality detailed data on their Web clientele that can be packaged and
sold by third-party wholesalers than it is to have quality content, or any content at all. Smart or targeted advertising is the term for what is emerging, and
it is quickly becoming the basis for much of Internet advertising. For that
reason, retail websites like Target.com are now becoming major advertising
sites because they have so much traffic and collect such extensive data.185
“Content is no longer king,” The Economist proclaims. “Information about
users is what really matters.” 186 Turow concludes, “The emerging trajectory
suggests that apart from a relatively few elite-oriented publishers (New York
Times, Atlantic, and the like), the pressure to bring personalization synced
to marketing goals will be difficult for companies to avoid if they want to
survive.” 187 This should not really be a surprise; advertisers always supported
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157
media for opportunistic reasons, because they had no better options. Now
they have better options, and consequently much of the media can get
thrown overboard.
The profit motive pushes this process into new and dangerous frontiers
quickly. Increasingly, research—“persuasion profiling”—determines what
types of sales pitches are most effective with each individual, and ads are
tailored accordingly. Moreover, researchers are now working on “sentiment
analysis,” to see what mood a person is in at a particular moment and what
products and sales pitches would be most effective.188 Advertisers are at work
developing emotional analysis software so webcams can monitor how one’s
face responds to what is on the screen. “One way to persuade internet users
to grant access to their images,” The Economist notes, “would be to offer
them discounts or subscriptions to websites.” 189 Pariser chronicles a range of
developments on the horizon, including making machines more “human.”
Such machines-cum-humans can then establish “relationships” with actual
people and get even more information from them.190
Nielsen research reveals that people put far more stock in peer recommendations and crowd-powered ratings than they do in traditional advertising, so
considerable effort is going into making covert sales pitches.191 Commercializing friendship is a killer app.192 Facebook is ideal for this. “On Facebook,
you take friends into account,” an ad executive explained to Turow. “So-andso liked this; you will too. People find that creepy in the beginning, but . . .
they slowly get used to it.” 193 A 2011 Duke university survey of corporate
marketing officers found that they expected to allocate no less than 18 percent of their advertising budgets to social media within five years.194
The problems faced by traditional media do not mean that advertisers
and the emerging system are entirely agnostic about content. Preliminary
research suggests that the content of a website does influence the success
of an ad. The issue is whether the effect is enough to justify any subsidy of
the media content by the advertiser.195 Sometimes advertisers simply “cut
out the middleman” and produce the content themselves in a manner that
has the sole objective of selling the product. The logic of the system is that
it personalizes content for individuals, and the content is selected based on
what is considered most likely to assist the sale. Pariser’s Filter Bubble documented how the Internet is quickly becoming a personalized experience
wherein people get different results on Google searches for identical queries,
based on their history. They are soon to get different websites on the screen
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than other people who enter the same uRL. These developments are driven
in toto by advertising and commercialism.196 Indeed, with the appearance of
“content farms,” an industry has emerged that produces content on demand
to provide access to desired consumers for advertisers. Google’s former CEO
Eric Schmidt notes that individual targeting “will be so good it will be very
hard for people to watch or consume something that has not in some sense
been tailored for them.” 197
All of this has a long way to go, but some things are already crystal clear:
the notion in the 1990s that the Internet would empower individuals and
make them masters of their digital fate has been turned on its head. The
idea that people would join together in a shared global commonwealth is a
distant memory. “The way the Internet has gone sour,” Lanier laments, “is
truly perverse.” 198 While “in many cases this provides for happier, healthier
lives,” Pariser concludes, “it also provides for the commercialization of everything—even of our sensory apparatus itself.” 199 And much as Rorty framed
the matter in 1934, Turow concludes that the evidence points in one direction: “The centrality of corporate power is a direct reality at the very heart of
the digital age.” 200 In 1935, New Republic editor bruce bliven characterized
himself as among those “who find advertising so obnoxious that they wish
the radio had never been invented.” 201 One wonders if the Internet will produce its modern blivenites—or if, as with broadcasting, people will come to
accept its degradation as the natural way of the world and barely recognize,
let alone question, what is taking place.
A Military-Digital Complex?
In his farewell address in 1961, President Dwight D. Eisenhower ominously
warned about the military-industrial complex that had emerged as a cornerstone of the American political economy in the postwar years, with powers previously unknown in American history. The former Supreme Allied
Commander in Europe during World War II decried the shared interests of
warmakers, large corporations, and politicians that would render the public
largely powerless to provide any opposition. In grave terms he charted how
this could lead to the end of any humane or democratic society in the warfearing spirit of James Madison and Thomas Jefferson. It was one of the most
extraordinary speeches by a president or any political leader in American
McChesney, Robert W.. Digital Disconnect : How Capitalism is Turning the Internet Against Democracy, The New Press, 2014.
ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ucsd/detail.action?docID=1001094.
Created from ucsd on 2018-04-03 00:49:20.
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The Gettysburg Project:
“Of the people, by the people and for the people.”
Revitalizing Public Engagement in the 21st Century
CASE STUDY:
What Worked in the Fight for Net Neutrality
August 2015
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Net Neutrality case
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What Worked in the Fight for Net Neutrality
By Edward Walker (UCLA), Michelle Miller (Coworker.org),
and Sabeel Rahman (Brooklyn Law School), with Jenny Weeks
In just a few decades the Internet has evolved from a file transfer service for research
institutes into a central tool for modern living. As online access becomes ever more ubiquitous in
daily life, internet service providers (ISPs) – the companies that make it possible for businesses,
consumers and nonprofits to get online – have become a major industry, with estimated U.S.
revenues of $55 billion in 2014.
The United States regulates public utilities and telecommunications providers as common
carriers – businesses that offer their services to the general public at published rates. Common
carriers typically are allowed to create reasonable rules to help their businesses run efficiently,
but are barred from discriminating against customers without a compelling reason.
Since the early 2000s regulators have struggled to determine how companies that provide
broadband internet service to consumers should be regulated. Large internet service providers
(ISPs) such as Comcast and Time Warner Cable have argued that treating them as common
carriers would raise the cost of broadband service and stifle investment in the Internet. On the
other side, free speech, civil rights and social change advocates and many companies that deliver
content online argue that broadband operators should not be allowed to discriminate against
types of information or classes of customers. To achieve this goal, known as net neutrality, they
came to agree – although such consensus took significant work on the part of many – that ISPs
must be regulated as common carriers. Doing so would also avoid the related problem in which
ISPs charge fees for “paid prioritization” such that internet content providers could pay ISPs for
“fast lane” access of users to their content.
ISPs want
"paid
prioritization":
content
providers
pay for "fast
Despite being severely outgunned, net neutrality advocates won a major victory in
lane" access February 2015 when the Federal Communications Commission (FCC) adopted rules that
to users
regulate ISPs as common carriers and require them to treat all customers equally. The Sunlight
Foundation estimated that opponents of net neutrality, led by Comcast, Verizon, AT&T, and the
National Cable and Telecommunications Association, spent over $75 million on lobbying each
year from 2009, consistently outspending pro-net neutrality groups by 5-1.1 Internet Service
Providers (ISPs) deployed a vast army of lobbyists. Large ISPs are already suing to block the
new rules, so the issue is not settled yet. But activists and funders involved in the campaign for
net neutrality see the net neutrality fight as an example of new ways of deploying resources to
build and exercise power.
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1
See Sunlight Foundation study, online at https://sunlightfoundation.com/blog/2014/05/16/how-telecoms-and-cable-havedominated-net-neutrality-lobbying/.
2
!
Net
Neutrality:
ISPs should
be regulated
as common
carriers
Gettysburg Project on Civic Engagement
Net Neutrality case
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Background
In 1996, when Congress overhauled telecommunications law for the first time in more
than 60 years, many Americans were still using dial-up service over phone lines to access the
Internet. Telephone service, cable TV and cellular phones were separate data delivery industries,
Telecomm
and legislators cared primarily about promoting competition in each category. The
Act of 1996:
Telecommunications Act of 1996 created different regulation levels for “telecommunications
"telecom
carriers,” which provided products such as local phone service that Congress deemed essential,
carriers" vs
and “information services,” which provided services that were viewed as optional.
Telecommunications services were treated as common carriers, while information services were "info
services"
regulated more lightly. The law did not directly address ISPs.
Six years later, with home broadband service becoming increasingly popular, University
of Virginia law professor Tim Wu wrote a widely-circulated memo called “A Proposal for Net
Neutrality” that considered how to balance broadband carriers’ legitimate interests in
maintaining workable networks with the goal of preserving equal Internet access for everyone.2
Wu had worked in the technology industry and was concerned about abuses such as blocking
certain types of Internet traffic, limiting what devices subscribers could attach to the network,
and charging higher fees for certain types of applications.
Net neutrality, Wu wrote, would “forbid broadband operators, absent a showing of harm,
from restricting what users do with their internet connection, while giving the operator freedom
to manage bandwidth consumption and other matters of local concern.” For example, some
popular online gaming applications required much more bandwidth than other uses such as
email. Wu asserted that carriers could police bandwidth usage by requiring heavy gamers to buy
more bandwidth. But they should not be allowed to block users from playing particular games,
which would put the game manufacturers at a competitive disadvantage and infringe on
consumers’ right to use their internet connections as they saw fit in the absence of public harm.
A few months earlier, the Federal Communications Commission (FCC) had declared that
internet service over cable was an information service, not a telecommunications service, and
thus was not subject to common carrier regulation. FCC chair Michael Powell, a Republican,
contended that applying telephone-era regulations to new technologies would stifle a fastgrowing market. This decision set the stage for a decade of controversy over the meaning of
Internet freedom as communications technologies converged and media companies merged and
consolidated.
A consequential development followed in 2005, when the Supreme Court handed down
its decision in National Cable & Telecommunications Association et al. v. Brand X Internet
Services et al. (often known as the Brand X case), which ruled that the FCC could decide how to
regulate broadband as an expert agency; thus, the FCC was authorized to make the judgment that
broadband was in fact an information service. Although Brand X was nominally about whether
cable companies must permit their competitors to provide high-speed Internet through their own
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2
Tim Wu, “A Proposal for Network Neutrality,” June 2002, http://www.timwu.org/OriginalNNProposal.pdf.
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services (answer: no), the decision was crucial in setting the stage for the debate that would
follow. An important moment in the wake of this decision was the 2005 Business Week interview
with former SBC Telecommunciations chief Ed Whitacre, in which he claimed that companies
like Google and Yahoo were freeloaders on the ISPs’ “pipes.”3 This comment was widely
ISP's as owners
interpreted to be against the principle of net neutrality, given Whitacre’s suggestion that
of the "pipes"
companies who own the “pipes” should be able to control what flows through them.
(Google &
Yahoo as
The Emergence of Net Neutrality as a Policy Issue
"freeloaders")
Although the FCC declined to impose common carrier regulation on broadband Internet
service during the Bush administration, it could not ignore the growing market power of large
ISPs like Comcast and Verizon. In 2005 the agency adopted a policy statement (not a formal
rulemaking) that set out four principles designed to encourage broadband deployment and
promote an open internet:
•
FCC 2005
•
policy
statement •
4 principles:
•
Consumers are entitled to access the lawful Internet content of their choice;
Consumers are entitled to run applications and services of their choice, subject to the
needs of law enforcement;
Consumers are entitled to connect their choice of legal devices that do not harm the
network; and
Consumers are entitled to competition among network providers, application and service
providers, and content providers.
It was in the 2005-7 era that Net Neutrality started to become a major issue of public
policy concern. Millions took part in actions during 2005 and 2006 in the wake of the Brand X
decision, which alerted groups like Free Press to the risks inherent in the new rules that offered
cable companies new rights to control their networks. Then, in April 2006, a broad coalition of
advocacy causes – including not only Free Press but PETA, MoveOn.org, Common Cause, the
American Library Association, and, notably, the Christian Coalition, among others – launched
SaveTheInternet.com, hoping to pressure Congress to support strong net neutrality rules. It was,
of course, during this time that former Alaska Senator Ted Stevens infamously referred to the
internet at a “series of tubes,” later lambasted memorably by Jon Stewart. But despite a number
of opposing bills being introduced, net neutrality legislation was not successful in this period.
In 2007, subscribers charged that Comcast was selectively blocking applications that they
were using to share files online. The company asserted that it had a responsibility to subscribers
to prevent bottlenecks caused by some applications, but Public Knowledge and Free Press filed a
complaint asking the FCC to investigate. Comcast was caught engaging in such blocking and
later investigated and sanctioned by the then-Republican-led FCC.
In 2008 the agency ordered Comcast to stop blocking peer-to-peer file sharing programs
and disclose its practices for managing Internet traffic. The company sued in response. In 2010
the U.S. Court of Appeals for the District of Columbia ruled for Comcast, finding that the FCC
did not have legal authority to enforce net neutrality rules.
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http://www.businessweek.com/stories/2005-11-06/online-extra-at-sbc-its-all-about-scale-and-scope
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Six months later the FCC tried again, issuing an Open Internet Order that barred network
operators from blocking legal applications or websites or practicing “unreasonable
discrimination” among websites. It also directed ISPs to disclose their methods for managing
network traffic. The agency did not reclassify broadband internet as a telecommunications
service. Then-FCC chair Julius Genachowski did not want Title II reclassification, and by some
accounts had tried to broker an industry compromise behind closed doors; this was very
controversial and split the public interest community. Many saw the rules that followed as
severely watered-down.
And then Verizon sued the FCC. In early 2014 the U.S. Court of Appeals for the D.C.
Circuit struck down the 2010 Open Internet Order. The court agreed that the FCC had
jurisdiction over broadband providers, but again held that the agency did not have legal authority
– because the ISPs were still being considered “information services” and not communication
services subject to common carrier rules – to prevent them from blocking content, discriminating
against content providers, or charging fees for faster transmission, a practice known as paid
Tom
prioritization or “fast lanes.” The decision was issued shortly after Tom Wheeler, a former
Wheeler,
lobbyist for the cable and wireless industry, succeeded Genachowski as chairman.
former cable
industry
Within a few weeks of the Verizon ruling Netflix announced that it had agreed to pay
lobbyist,
Comcast for faster and more reliable access to Comcast subscribers. The deal was not technically became FCC
paid prioritization – Netflix was paying for a separate connection to Comcast customers, not
chairman
faster service through existing channels – but the news suggested that content providers were
starting to conclude that cutting deals with ISPs for fast service was their best option.
In April 2014 the FCC announced that it would propose rules that allowed paid
prioritization. Consumer groups and open Internet advocates sharply attacked the proposal, but
momentum seemed to be against them. Comcast, Verizon and other ISPs were lobbying hard
against prescriptive rules with support from Republicans in Congress. President Obama had
supported net neutrality in his 2008 campaign, but had not weighed in on the issue recently. And
given Wheeler’s industry ties, most observers expected him to propose rules that favored ISPs.
“No one thought he was going to play sheriff and regulate in a tough way,” says Josh Levy,
former internet campaign director for the advocacy group Free Press and currently advocacy
director at Accessnow.org.
Campaigning for Net Neutrality and the Growth of Internet Activism
In the spring of 2014, the FCC seemed poised on the brink of implementing a paid
prioritization policy for the internet. But in the years since the 2010 legal defeat when the courts
ruled the FCC could not promulgate a net neutrality regime, the advocacy and movement
landscape had changed considerably.
In the early 2000s only a few groups were active on the net neutrality issue, working
mainly in technical and policy forums. As a few funders started investing in Internet issues and
working to develop a network, more organizations entered the space with a growing emphasis on
public education and advocacy. Free Press was founded in 2003 and, as mentioned earlier, was
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critical to the earlier fight for net neutrality in the 2005-7 era. Fight for the Future started in
2011, made a big splash with its work in the Stop Online Piracy Act (described below), and
started working on Net Neutrality in the years that followed. Also absolutely critical were the
new civil rights groups like Color of Change, Presente, 18 Million Rising, and Center for Media
Justice (which had been active on these issues for many years prior); these groups saw the
Internet as a crucial venue for amplifying the voices of communities of color and connecting
disadvantaged communities. These organizations used both netroots and grassroots organizing
strategies to engage the public and turn concerned citizens into media reform activists.
Connection
A critical moment followed in 2011, when legislators introduced bills in both houses of
to Copyright Congress to combat unauthorized use of movies, songs and other copyrighted materials. The
Stop Online Piracy Act (SOPA) and the Protect Intellectual Privacy Act (PIPA) addressed this SOPA &
PIPA (2011)
issue by authorizing ISPs to shut down websites that posted pirated materials and requiring
search engines to remove links to those sites. Open Internet supporters viewed SOPA and PIPA
as major threats to free speech that would promote censorship and allow ISPs to regulate the
Internet. In a preview of what would happen on net neutrality, internet companies and
technology experts weighed in on technical problems with SOPA and PIPA, ranging from
security threats to constitutional issues. Meanwhile, funders like the Media Democracy Fund
helped convene a number of different advocacy groups to coordinate strategy and share
information and technical expertise. At the same time, groups like Demand Progress and Fight
for the Future engineered new forms of protest action. These efforts culminated on January 18,
2012, when Wikipedia and over 100,000 other websites staged a blackout day to raise awareness
of how censorship could affect Internet users. Congressional offices were inundated with phone
calls opposing the bills. Two days later, their sponsors indefinitely postponed votes on SOPA
and PIPA, effectively killing the bills.
While the SOPA/PIPA battle helped build relationships, moral narratives, and protest
tools that would be needed for the net neutrality fight, proving their effectiveness, a number of
critical players like civil rights groups were not mobilized in this fight. And when the court ruled
against net neutrality in 2010, many mainstream civil rights groups were uncertain of their
position on net neutrality, concerned that reclassification of any kind would hurt low-income and
communities of color, and mindful that telecom companies were also sources of unionized, wellpaying jobs and a conduit for mobility into the middle class. But in the following years, nextwave civil rights groups like Color of Change played a large role in shifting support among the
civil rights community and affiliated legislators, getting them to see net neutrality as an issue of
economic justice. Incidents like the Ferguson riots in 2014—where the use of social media was
critical to enabling coverage of police brutality and the riots unfiltered by large media outlets—
further helped persuade these new wave civil rights groups make the case that an open internet
was crucial to enabling advocacy on a range of civil rights issues.
Building on the prior experience of SOPA and PIPA, groups like Fight for the Future
leveraged new tools for civil disobedience and protest, for example through technologies that
enabled flooding voicemails of individual FCC officials, and organizing a mass “Internet
Slowdown”—tools that conveners like the Media Democracy Fund helped spread. Meanwhile,
policy organizations such as Free Press and the Open Technology Institute worked through
insider channels, publishing white papers and filing lawsuits, in coordination with these groups.
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Groups
active in
different
areas
(FCC,
lobbying
Congress,
online
engagement,
organizing
actions &
protests,
coordination across
grps)
Overall, the groups who were the most active from the public interest community at the
FCC were Free Press and the Open Technology Institute, as well as Public Knowledge. In
lobbying Congress, it was Public Knowledge, Demand Progress, Free Press, and National
Hispanic Media Coalition and the Internet Freedom Business Alliance. In terms of
online/netroots engagement, many highlighted the work of Demand Progress, Fight for the
Future, Daily Kos, Color Of Change, CREDO Action, MoveOn and Free Press. When it came to
organizing actions and protests, it was Free Press, Popular Resistance (whose “Occupy the FCC”
protest was seen as crucial), Fight for the Future, Center for Media Justice, with support from
Common Cause, MoveOn and EFF at key moments. The companies that did the most were
Engine Advocacy, tumblr, Etsy, Kickstarter, Union Square Ventures, COMPTEL, IFBA,
Mozilla, and Netflix. In terms of coordination across the network of groups, Media Democracy
Fund, Free Press, OTI, Spitfire Strategies, Marvin Ammori (who organized companies), Engine
Advocacy (startups), James Rucker (netroots), David Segal at Demand Progress, Freedman
Consulting and Jochum Shore.
Negotiating over Title II
When the FCC opened a rulemaking docket in mid-May 2014, it was deluged with
comments that urged the agency to reclassify broadband internet as a telecommunications service
and write strict rules to preserve net neutrality. Within two months the agency received nearly
800,000 comments, far more than it had seen in any previous rulemaking. In early June 2014,
HBO comedian John Oliver did a 13-minute monologue on the issue that compared FCC’s
proposed rules to “needing a babysitter and hiring a dingo” – a reference to Wheeler’s prior stint
as a telecom lobbyist. Some 45,000 comments poured in overnight, freezing the agency’s
system. (Asked to comment, Wheeler noted for the record, “I am not a dingo.”) By midSeptember the FCC had received more than 3.7 million comments that skewed heavily toward
strict regulation to promote net neutrality; it is worth noting, however, that the bulk of these
comments were generated by the Battle for the Net and the Internet Slowdown coalitions, rather
than from the John Oliver viewers. A petition created on the White House’s “We the People”
website also gathered more than 100,000 signatures.
The sudden explosion of pressure began to shift the policy discussion within the FCC, but
the agency had not yet fully embraced a full reclassification of ISPs as Title II common carriers,
considering a range of alternative ‘hybrid’ proposals that would approximate net neutrality but
through more convoluted arrangements. On November 10 President Obama released a statement
that urged the FCC to adopt the “strongest possible rules” that would forbid blocking,
discriminating, or offering paid prioritization on the Internet. This statement, which followed
some direct pressure on Obama from advocacy groups, called on the FCC to reclassify both fixed
and wireless consumer broadband service as a telecommunications service to put these
regulations on a strong legal footing. Obama noted that he was asking the FCC “to answer the
call of almost 4 million public comments” by adopting strong rules. That statement in turn
clearly signaled to the FCC and Congress that Obama wanted rules that would protect net
neutrality. Advocates simultaneously engaged lawmakers in Congress to create pressure and
space from the legislative side for the FCC to take a Title II policy approach.
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In mid-February 2015 Wheeler published an op-ed on Wired magazine’s website
announcing that the FCC would propose “the strongest open internet protections ever proposed
by the FCC,” and would affirm Internet users’ rights “to go where they want, when they want,
and the rights of innovators to introduce new products without asking anyone’s permission.”4
The new rules would apply to both fixed and wireless broadband service, and would bar
blocking, discrimination and fast lanes.
Open Internet groups celebrated what Free Press called “the biggest victory for the public
interest in the [FCC’s] history.” While acknowledging that phone and cable companies would
inevitably challenge the ruling, Free Press president and CEO Craig Aaron wrote, “The fight to
protect the Internet has united everyone – grassroots activists, technologists, new civil rights
leaders, parents, teachers, students, musicians, artists and millions and millions of Internet users.
We’ve proven that we’re a force to be reckoned with in Washington.”5
What Worked: Lessons Learned on Resources from the Net Neutrality Fight
The net neutrality battle offers a number of insights into how resources may be mobilized
effectively to generate power. These resources are not just material, but have to do with the
leverage generated by the careful structuring of networks and coalitions, the diversity of partners,
the way that collective learning can serve as a resource in later fights, and the strength and clarity
of a moral narrative that helps to frame the issue in a fashion that maintains solidarity. We
review these in turn.
1. Funders as brokers and cultivators
In the early 2000s, only a few small nonprofits were working on net neutrality. “There
was a tiny handful of mainstream but underfunded groups inside the Beltway doing the heavy
lifting on litigation and policy around these issues. But there was no [political] base and no one
speaking for people whose lives would be dramatically impacted by these policies,” says Helen
Brunner of the Media Democracy Fund, one of the first grant makers to focus exclusively on
communications issues in the digital age.
A select group of funders who believed that the issue was important invested significant
money and time to increase the number of groups that focused on Internet rights, raise their
profiles, persuade those groups to collaborate, and socialize the topic of net neutrality. Without
their sustained involvement, the broad and diverse coalition of activists who generated support
for net neutrality in 2014-2015 would probably not have emerged. This is not, of course, to
discount the substantial role of grassroots fundraising – particularly among central groups like
Free Press and Color of Change – in individual organizations’ efforts and in some coalitionbuilding.
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4
Tom Wheeler, “This Is How We Will Ensure Net Neutrality,” Wired.com, February 4, 2015,
http://www.wired.com/2015/02/fcc-chairman-wheeler-net-neutrality/.
5
Craig Aaron, “Net Neutrality Victory,” February 26, 2015, http://www.freepress.net/blog/2015/02/26/net-neutrality-victory.
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Philanthropic funding is especially important for Internet advocacy because tech
businesses large enough to support foundations are unlikely to fund work that holds their
technologies to account or calls for tighter regulation of the tech sector. Private donors like the
Ford Foundation, the Voqal Fund and the Media Democracy Fund pursue a broader vision of the
public good that considers questions such as keeping technology affordable and making it as
widely accessible as possible.
These foundations played different but complementary rol...
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