Don't Talk to the Press!
White Dot Infiltrates
iTV Industry Trade Body
Coffee and Cookies with the
Addressable Media Coalition
by David Burke

Yale Club Article

Part One: Privacy at the Yale Club

The subject on the email was “Media Privacy Gang-Rape”. But he seemed sane enough. For instance, he remained good-natured when I told him he was paranoid, especially in this paragraph:

“I am absolutely convinced” he wrote to me, “that televisions are already capable of acting as cameras which enable the media industry and their clients to observe and listen to everyone and everything within line of sight of the screen.”

What sounds more crazy than saying “I think my TV set is watching me?” He might as well have signed his message “Napolean238@AOL.com”. But few people understand this subject, and I’m glad the man found our website. I know how hard it is to choose the right words and anticipate what is possible, without losing all credibility.

For three years now, I have been studying the privacy issues surrounding digital interactive television, and I was able to reassure my correspondent that I hadn’t heard anything about cameras when I snuck into the Addressable Media Coalition Luncheon at the Yale Club in New York. If those people don’t know about surveillance gadgets in television sets, nobody does.

The Addressable Media Coalition (AMC) is a division of the Association for Interactive Marketing (AIM), which has recently been made a part of the Direct Marketing Association (DMA), a lobbying group for junk mailers, cold callers and market researchers. The AMC was established to realize the dream of addressable advertising – a new way to profile and target people based on their viewing behavior, or as it is now known, their “telegraphics”. Prominent among the Coalition’s 34 members are Nielsen Media Research, the advertising giant Young and Rubicam, WebTV, which is owned by Microsoft, and NDS, which is owned by Rupert Murdoch’s News International.

The group I work for was not invited to join. I serve as British Director of White Dot, a small, but nevertheless international, campaign against television.

I was so disorganized that day, that when I got to the Yale Club, I didn’t have business cards for my fictitious company. My suit looked nice.

“You don’t have a business card?”

“Uh, no. “

But the young man on the door couldn’t make too much fuss. I had missed the food, and walked straight into the AMC’s Privacy Subcommittee meeting. The oak paneled room of 20 people sat quietly around their plates of cookies and china cups of surprisingly bad coffee, listening to a speakerphone, out of which the CEO of BeyondZ Interactive passed on what she knew of the lobbying situation in Washington.

She emphasized how important it was to negotiate something at the federal level, before individual states could pass their own privacy bills. Discussion turned to their narrow escape in California. That bill had gone so far as to require viewers’ permission before monitoring could begin, and was only killed after intensive lobbying by Microsoft and AOL. Everyone agreed they were lucky. State Senator Debra Bowen had been too far ahead of the curve.

“May I ask who you are?”

I looked up, at Art Cohen, Senior Vice President of Advertising and Commerce for ACTV, and Chairman of the Coalition. I recognized him from the SpotOn promotional video he gives to advertisers.

Zoom right in - to a little street of identical houses. Are the happy people inside them identical as well? Oh no! They all have different skins, different numbers of children, make different money and want different things. Every time the old white couple with the poodle click on their remote control, it is recorded in a database on their set-top box. The same is true for the young black family with the Labrador. SpotOn software gathers this data, analyses it, and sends each of them targeted advertising or programs aimed at their unique behavior. The secret: artificial intelligence algorithms!

“See that box?” SpotOn’s head of sales in Denver asked me at a trade show, “That box can hold 64,000 bits of information about you!” And that was just the General Instruments 2000 box, not even the GI 5000 everyone was talking about.

“I’m a programmer” I said, “I’m just beginning to work with interactive TV.”

Why did I give my real name? That was so stupid. I had asked Mr. Cohen for an interview months ago, and he had turned me down.

“I’ve got to be careful about what I say,” he told me on the phone, “because what I say could end up in a book, and I’ll be sorry about it.”

He looked at my registration form, then looked at me.

“You’re not the press are you?”

“No” I said.

(a long pause.) “Okay.”

I shook his hand. It was fleshy and strong, like his face. The fashionable, narrow lens glasses made a nice contrast. He looked good.

Art Cohen is very concerned about people listening in on what he says. With the Addressable Media Coalition, he is determined to offer a place where industry leaders can speak in confidence, agreeing how to proceed before saying anything in public.

“You don’t want to talk to the press about any of this,” he told us over and over. “If some bad PR got out, whether it’s true or not, it might take us a year to make it up.”

Everyone nodded. They all agreed they couldn’t afford to make the same mistakes they had on the internet – rushing into a medium they didn’t control, without a strategy in place, a back-up plan, just in case users found out about all those cookies.

Companies who make interactive television are keen to talk about “the coming digital revolution”, hoping viewers will forget about the one that has already happened. Interactive TV is really a digital counter-revolution, walling in the content that viewers can see, and handing control of their news and leisure time back to broadcasters.

DoubleClick, the internet advertising firm, got into big trouble when they tried to connect internet surfing data with offline records from Abacus, a mail-order catalog company. But television service providers won’t have to improvise this way. Digital set top boxes connect on and offline data as soon as they are installed. That is what the machine was designed to do. A number of companies now hope to connect the commercials you see to the products you buy using a supermarket loyalty card. There is no end to this convenience.

In Europe interactive TV is a big success. But the American industry requires visionary leaders to overcome the skepticism of advertisers and viewers. Art Cohen is running for Steve Jobs. And he might win; he talked tough and interrupted people. He moved around the room behind the CEOs, lost in thought one second, commanding our attention the next. We were all impressed.

I’ve interviewed dozens of executives in this industry, on the phone, in their “homes of the future” and at conferences on interactive TV and one-to-one marketing. These are people you will never meet, but who will soon know a great deal about you.

David Byrne, Senior Manager of Business Development at Microsoft was happy to talk about the warehouse of data that is being collected by WebTV, waiting for some future use. Other salesmen and women were young and excited to be part of the next big thing. They weren’t sure how to handle privacy questions, but their repeated hope was in today’s “media-savvy youth”. Apparently, the younger kids are, the less they worry about privacy.

At one conference, Kirt Gunn of the advertising consultancy Cylo had a whole room laughing when he speculated why this might be: “I don’t know whether it’s how many people read 1984 or what piece of the puzzle it is.”

Indeed, Orwell’s book is about to lose much of its rhetorical power. The real experience of interactive television will soon take its place. When consumers discover that their TV sets are recording what they do in their living rooms and bedrooms, they will either stand up and demand protection, or, conversely, they will learn to love it.

“Big Brother,” our children may laugh someday, “Some old guy worried about that in the last century. But see – now they record everything I do, and I can order a pizza without dialing my telephone!”

The data analysts I’ve met were brilliant. I couldn’t think of any use for this technology that was not already being studied or already in development.

Neal Muranyi of the Database Group is the man who first coined the term “telegraphics” to describe the data you and I will produce each evening. He has already seen how the insurance industry could save millions of dollars:

“Such systems would allow, say insurers to differentiate risk-averse conservatives from high-living show-offs, and then tailor both marketing messages and risk scoring systems accordingly.”

Pat Dade of Synergy Consulting told me about his psychographic “value groups”, people he has surveyed and interviewed until he is able to categorize the emotions that make them act. Here he describes how your television data will be used as a digital fingerprint, linking you into one of them:

“Let’s say that the hypothesis is that an inner-directed person, if they watched da-da-da, would react in such and such a way. Now you can test that. You can test that at the end of each time, because you’re starting with the question ‘Can we change or reinforce behavior based on this information?’”

Control. That’s the slogan used to sell interactive television. But what really excites these people is the way it creates experimental conditions in the home. Your TV set will be able to show you something, monitor how you respond, and show you something else, working on you over time until it sees the desired behavior.

But who nicer to push the buttons? Pat Dade spoke like the gentle, self-help author he could so easily have been, and he had a nice sense of humor. When I found out that he had worked on Echelon, the US military’s worldwide electronic eavesdropping system, he laughed.

“Oh yeah” he said, “We spied on everybody.”

That’s why the AMC Luncheon was such a surprise. These guys were so hard and aggressive, like big business baddies in a cartoon strip.

Poor Jerome Samson, the French data analyst working for Nielsen, was openly ridiculed for talking too long, and a running joke about “career terminating statements” was thrown back and forth between tough young sales reps.

Except for Karen Lennon of BeyondZ, none of the women dared say anything. And when some namby-pamby suggested explaining to viewers about the unique identifier and what we did with their data, Jack Myers of the Myers Report shot him down.

“Listen,” he said, “There really is no such thing as privacy, unless you’re..[Unabomber] Ted Kaczynski or something. There is no privacy. It’s all public relations. It’s all perception.”

At the top of the pecking order stood Art Cohen. And he made it clear there would be no telling viewers anything:

“Right now you’re being targeted by Nielsen,” he said, dismissively, “This is just better data. Nobody’s getting permission now.”

But then, it’s like he had to go on:

“The difference is” he said, totally contradicting himself, “this box has a unique identifier, so you’re able to poll boxes individually. The Cable Acts and things that were written years ago don’t really deal with that.”

It was then that I began to have the strangest feeling of sympathy for Art Cohen. I began to see how much we have in common. Oh sure, before congressmen he can play casual, and say the profiling he does is no different from the way people know their local grocer.

But in front of these advertisers, like Wes Booth of Grey Advertising, or Tim Hanlon of Starcom Worldwide, who was listening somewhere on that speakerphone, Cohen had to lay out his vision of the coming, irrevocable change to the way human beings live. He had to predict the unthinkable. He had to make people listen, but not in any way that could appear, let’s say, too far ahead of the curve.

“This is going to happen” he was saying again, “Nothing is going to stop it. The technology is so powerful! It’s not just interactivity; it’s targetability and accountability… All the data is digital.”

Would he find the right words? How do you describe a future that already takes up your entire present, that you have studied in the smallest detail, so that you are already living it - without sounding crazy?

“Television is projections!” he was insisting, “Nielsen is projections! This will be based on actual counts! …Instead of an unreal world of projected data, we’re entering a real world of actual data, census data. That differentiates all these things from everything that’s gone before.”

What did he say? That was good. I scribbled it down. Census data! Why didn’t I think of that? I’ve been so hung up on the experimental conditions thing. Cohen is a genius! That’s the perfect way to describe it. This could bring the right-wingers on board!

Anyway, I wish my email correspondent had been there. There’s nothing like being with people who finally understand what you’re talking about.

Part Two: e-Trussed

In the following months, I took part in the AMC’s Privacy Subcommittee Meetings. These were chaired by Karen Lennon, a very nice woman whom I would call a privacy dove. That is, she thinks everything will be fine as long as the consumers are told that their civil liberties are being spit on. But both she and the privacy hawks, who were against raising such issues in public, agreed on one thing: a privacy seal was urgently needed.

The AMC have published a Privacy Guideline document about this matter, explaining that an industry run system of self regulation had to be in place before legislators themselves understood what interactive TV was and how it would affect citizens’ lives. The cornerstone of any such effort is to be a new Privacy Compliance Seal, that the Coalition hopes to announce with fanfare this Autumn. The rest of the Guideline document is written in vague language about respect and trust, although these two sentences do stand out:

Such security measures will vary depending on the configuration of the systems handling the data and the purpose of the data collected. Financial information, medical information, VOD/PVR/viewing information mapped to PII will require greater levels of security than anonymous information regarding clicks, viewing or purchases.

I suppose it is nice of them to fret over the security of viewers’ financial and medical information, but what right do they have to all that data in the first place?

Anyway, these meetings were held mostly by conference call, so I will skip the witty personal observations and get right to the issues. What follows are the matters that were important to members of the AMC Privacy Subcommittee, the group that will be creating this new Privacy Compliance Seal. When consumers see this seal appear on their TV screens, reassuring them that the highest standards are being met, they should know what went on in these meetings where the Seal was created.

Goal: Persuade Legislators to Scrap the Cable Act

An anomaly exists between the privacy regulation of cable and satellite. The 1984 Cable Act is far stricter. Both privacy advocates and broadcasters want to “level the playing field”, except in different directions. Members of the Coalition were specifically advised to copy language that Cox cable had written up for their subscription contract. It was considered a good first step towards freeing interactive TV from the Cable Act.

Goal: Keep Legislation Away from the States

It came up a number of times that state legislatures might propose their own privacy legislation. Debra Bowen’s proposed opt-in legislation was discussed a number of times. Repeatedly, it was agreed that if legislation was to be changed, it was best done at the federal level, where the various media lobbyists had more influence.

Goal: Create a Privacy Seal Before Government Regulates

Or, as Art Cohen said, “bites us in the ass”.

One of the earliest conversations of the Privacy Subcommittee contained a humorous moment. Everyone had been agreeing that speed was of the essence and that the process of creating a Seal could not be allowed to bog down. A lawyer on the call offered to take the initiative and draw up a quick list of privacy principles.

That’s when there was a silence, followed by a bit of laughter.

Of course he couldn’t draw up such a list of privacy principles! We hadn’t sent out our Privacy Audit, asking all our member companies what practices they already had in place! We had to ask them what data they gathered, where it was stored, whom it was shared with, everything!

The Privacy Audit was every question that I, investigating these companies, could ever want to ask. But it was more important for the AMC’s Privacy Subcommittee, because the last thing we all wanted to do was put out rules that might “cut somebody out”.

So there is the first lesson in how you create a Privacy Compliance Seal: Make sure it embodies the lowest common denominator of what everyone is already doing anyway.

Goal: Avoid Permission, Concentrate on Suitable Content

The Privacy Guideline document was written by Karen Lennon and a man named Jim Koenig of something called the ePrivacy Group, which turns out to be a wholly owned subsidiary of a company called Postiva. So one would assume he is very strong on things like viewer permission.

But in the meetings, he claimed it was not important. He said that with education, viewers could be made to see that “suitable content” was more important than “permission.”

In other words, if a television collects data and uses that data to provide programming that the viewer likes, and the user doesn’t notice or sees no reason to complain, then there is no problem.

“There is no privacy problem if content gets 100% acceptance,” said Koenig. …”If we can go towards relevance, that is ultimately where we want to go.”

This argument is seductive, and has a lovely libertarian ring to it.

But think again about what he is saying. First of all, there is such a thing as the principle of privacy. And reasonable people can argue about where to draw lines around it. But whatever your definition, privacy is a principle of human rights. It must be defined somewhere and respected.

What principle has Jim Koenig defined that the AMC can then respect? Absolutely none.

When he says the AMC should move away from permission and towards "relevance", he implies that no principle is at stake that would require a viewer’s agreement. In fact, his advice to his fellow iTV producers is not “give consumers what they want”, but “do to consumers whatever they let us get away with”.

And here is a second way that Koenig’s comment betrays his industry’s disrespect for its customers:

The viewers he is describing, who meekly accept his scrutiny, are not told the truth about what he does in their homes, or what he will do with the data he gathers. Every month new interactive systems are launched, and each arrives with two sets of promotional literature: one set for the viewers and another for the advertisers.

Viewers are told how they will be able to order pizzas through their TV sets, advertisers are told about psychographic marketing and links to huge third party data services. Who would knowingly 'opt in' to that? No one. And Jim Koenig knows it.

Yes, iTV producers and privacy advocates share a fondness for overblown rhetoric. But if the people in this industry refuse to be restrained by any principle you could discuss calmly, then we on the outside must continue to imagine that they will follow Koenig’s advice, and do whatever they want until somebody complains.

Goal: Just Get A Birthday and ZIP Code!

Now that the Center for Digital Democracy has published its report exposing interactive television, Ben Issacson has been very busy. He is the Executive Director of the Addressable Media Coalition's parent body, the Association for Interactive Media (AIM) and he has been offering himself to any news organization covering the story, rushing to assure viewers at home that nothing is wrong.

"The industry plans are to collect aggregate information for advertising," he told WIRED magazine, "but not to collect information without user knowledge and consent."

Notice his emphasis on the word aggregate, the implication being that even if your data finds its way into a database, it would never be connected to you personally. But that is not what Ben was saying when the Addressable Media Coalition met behind closed doors to discuss data collection issues and their new "Privacy Compliance Seal". At that meeting, Ben was reassuring his fellow interactive programmers that individuals could always be identified.

"You have one company that wants information," he told us, "they may ask it directly up front, but they may see a decline in the number of subscribers, because the users feel it's intrusive. On the other end, let's say I want the same information, but jeez, I can't bring myself to ask that, because the decline is percipitous, so I already have their nine digit ZIP code, I'm going to ask them for their birth date, just to confirm it. With a 97 percent accuracy I can then derive that data of who they are, and go buy all that information."

Ben Issacson is deliberately misleading reporters and the consumers who read about this issue. That is not surprizing; Mr. Issacson is a paid spokesman of the interactive advertising industry. What needs attention though is his use of the word "aggregate". He and the programmers he represents are purposely trying to create the impression that "aggregate" data must be "anonymous" data, and therefore protects the viewers who surrender it.

Not so. If the data describes a small enough pool of subjects (individuals with a certain birthdate in a certain ZIP code for instance) then it becomes possible to use that data as if it were personally identifiable. In data wharehousing theory, this is called a dataset's "granularity". And like the granularity of a photograph, it shows a clearer and clearer picture of a crowd, until it is possible to pick out individual faces. Ben Issacson has assured his fellow members of the AMC that he can pick out those faces with 97% accuracy. Shall we then call his data "personally identifiable"? Of course! And it should be regulated as such.

As for the "knowledge and consent" Mr. Issacson mentioned, the Addressable Media Coalition hopes to standardize what viewers everywhere are asked to sign when they subscribe to interactive television. One wording that members liked was "Yes, I want rich personalization!". Who would imagine that little phrase actually gives a cable or satellite company the permission to do so much? If you see these words, watch out.

Goal: Tell Us About Yourself!

It turns out that the moment you sign up for interactive television is the most important 15 minutes in the history of television. Art Cohen, Chairman of the Addressable Media Coalition, was especially keen on this point. Set top boxes are expensive, he told us. And if cable or satellite companies are going to subsedize these boxes, they will want as much information as possible in return, to hold and use for targeting.

When you stand there looking over your television subscription form, wondering why there are so many questions to fill out, consider what Cohen told the Coalition:

"When you put these boxes out there," he said, "you also want to know who these people are, in addition to what they have in their billing methods, it's very important to these cable operators that the minute they install that cable box, they want to give you a questionnaire."

The checkbox where the user opts-in our opt-out of "rich personalization" is important. But Cohen then described other questions that should be asked, in a standardized way, of every new customer:

"..whatever demographics they can collect because, think about it, if you don't get that, you have to go outside to other sources and it's not as accurate. The whole point being that the cable box is a polling mechanism - the absolute customization, media tool. You have to get as much information as you can on installation and in the follow up."

Another member of the Addressable Media Coalition, this august body which is soon to launch its own Privacy Compliance Seal, named Bob Williams, was enthusiastic about the way such information could be used, saying "Once you get their credit card number, you can get their whole history. There's no stopping you!"

Chairman Cohen saw a public relations disaster in the making. "Sure" he joked, "we can have DoubleClick make that announcement. And make sure you have plenty of press there."

That's funny. But what is funnier, of course, is that DoubleClick will never have information as complete as the people who provide interactive television. There are no technical obstacles to stop these men and women from collecting the data they want, only the law.