Category: Advertising

1

The Hidden Dynamics of the Media System

I’m flattered by Concurring Opinions’ request that I contribute to the blog this month. My expertise is not in the Law. It relates to the strategies and dynamics of media industries—particularly the processes at the intersection of marketing, digital media, and society. My aim in these contributions is to show how new, often hidden dynamics in the media system raise crucial issues for people concerned with the growth of an optimal media system for society.

What would such a system look like? I suggest that a good society should have a balance between what might be called society-making and segment-making media. Segment-making media are those that encourage small slices of society to talk to themselves, while society-making media are those that have the potential to get all those segments to talk to each other. So, for example, Latino Perspectives, a magazine for Latinos living in Phoenix and Tucson, may be considered segment-making; the same with the Univision television network. By contrast, People magazine and CBS television, with their interest in broad national audiences, can be called society-making.

A hallmark of the twentieth century was the growth of both types in the United States. A huge number of ad-supported vehicles—mostly newspapers and magazines—served as a way to reinforce, even create identities for an impressive array of segments that advertisers cared about, from groups of immigrants just establishing a presence in the country to the Jay Gatsby-esque luxury market, and more. At the same time, some ad-sponsored newspapers, radio networks and—especially—television networks were able to reach across these groups. For those who hope for a caring society, each level of media had, and continues to have, its problems. Segment-making media have sometimes offered their audiences narrow, prejudiced views of other social segments. Similarly, society-making media have marginalized certain groups, perpetuated stereotypes of many others, and generally presented an ideal vision of the world that reflects the corporate establishment sponsoring them at the expense of the competing visions that define actual publics. Nevertheless, the existence of both forms of media offers the potential for a healthy balance. In the ideal scenario segment-making media strengthen the identities of interest groups while society-making media allow those groups to move out of their parochial scenes to talk with, argue against, and entertain one another. The result is a rich and diverse sense of overarching connectedness: this is what a vibrant society is all about.

What are the core drivers that push the media toward or away from this development? I argue that in the U.S. and many other societies, the answer can be found in relationships between media and advertisers. To understand the key contemporary dynamics, I’ve focused a good deal of my recent research on the critical transformation taking place in the advertising system’s media-buying-and-planning business. The idea behind media buying and planning is basic: An agency helps its clients (the advertisers) decide where to place paid messages about their products. Thirty years ago the U.S. media plan for most national advertisers was a rather straightforward one negotiated by a few people and carried out by rather inexperienced clerks. The realistic possibilities involved the big three broadcast television networks, local radio stations, magazines, newspapers, and outdoor.

But with the rise of cable, satellite, game consoles, DVDs, and a panoply of internet-connected digital devices, media buying and planning has become a byzantine activity. The complexity of deciding how to think about and reach desired audiences has led agencies to a shift in personnel. Statisticians and computer engineers increasingly sit at the center of the process. They formulate complex computer programs, crunch numbers, and even create new advertising buying-and-selling technologies with the aim of identifying and reaching the best prospects in the best places.

The money used to purchase advertising is huge. Media buyers funnel hundreds of billions of dollars (allegedly close to $500 billion) to media firms in exchange for space and time worldwide.1 A substantial portion (one industry consultancy says 88%2) of the spending runs through a small number of organizations owned by a handful of agency conglomerates most people have never heard of: WPP, Omnicom, Publicis, Interpublic, Aegis, and Havas. And that money covers only the formal advertising. Activities such as product placement and “earned media” (an increasingly wide range of public-relations work that may well include coordinating Twitter feeds and Facebook fan pages) raises the total substantially.

Given the amount of cash involved and the fact that advertising provides such a high level of support for so many media industries, the decisions buyers and planners make influence whether media outlets live and how they live—for example, what audiences they should target and how much they can afford to invest in content. The past decade or so has seen the advertising business take a fundamental turn. The emerging media-planning-and-buying system is predicated on neither society-making nor segment-making advertising media channels. Rather, marketing executives along with their engineers and statisticians are building it increasingly around a belief in the primacy of the chosen consumer. The belief motivates them to sort audiences into targets and waste, focus on the individuals they deem valuable, track those people across as many platforms as possible, and serve them personalized ads and other content anywhere they show up.

They are creating a new marketing-and-media world, and the ramifications may well be profound for the individual, for media practitioners and their products, and for society at large. My hope with this month’s posts is that I can elucidate a few of these issues, tie them to current developments, and encourage policy discussions around them. I look forward to your comments.

References
1 See “Worldwide Ad Market Approaches $500 Billion,” eMarketer, June 13, 2011.
2 RECMA, “Global Overall Activity Billings 2010,” http://www.recma.com/files/RECMA_11103_1310117878200_FREE_EXTRACT_-_7_PAGES_-_July_08_A_.pdf , accessed February 1, 2012.

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The E.U. Data Protection Directive and Robot Chicken

The European Commission released a draft of its revised Data Protection Directive this morning, and Jane Yakowitz has a trenchant critique up at Forbes.com. In addition to the sharp legal analysis, her article has both a Star Wars and Robot Chicken reference, which makes it basically the perfect information law piece…

0

Censorship on the March

Today, you can’t get to The Oatmeal, or Dinosaur Comics, or XKCD, or (less importantly) Wikipedia. The sites have gone dark to protest the Stop Online Piracy Act (SOPA) and the PROTECT IP Act, America’s attempt to censor the Internet to reduce copyright infringement. This is part of a remarkable, distributed, coordinated protest effort, both online and in realspace (I saw my colleague and friend Jonathan Askin headed to protest outside the offices of Senators Charles Schumer and Kirstin Gillibrand). Many of the protesters argue that America is headed in the direction of authoritarian states such as China, Iran, and Bahrain in censoring the Net. The problem, though, is that America is not alone: most Western democracies are censoring the Internet. Britain does it for child pornography. France: hate speech. The EU is debating a proposal to allow “flagging” of objectionable content for ISPs to ban. Australia’s ISPs are engaging in pre-emptive censorship to prevent even worse legislation from passing. India wants Facebook, Google, and other online platforms to remove any content the government finds problematic.

Censorship is on the march, in democracies as well as dictatorships. With this movement we see, finally, the death of the American myth of free speech exceptionalism. We have viewed ourselves as qualitatively different – as defenders of unfettered expression. We are not. Even without SOPA and PROTECT IP, we are seizing domain names, filtering municipal wi-fi, and using funding to leverage colleges and universities to filter P2P. The reasons for American Internet censorship differ from those of France, South Korea, or China. The mechanism of restriction does not. It is time for us to be honest: America, too, censors. I think we can, and should, defend the legitimacy of our restrictions – the fight on-line and in Congress and in the media shows how we differ from China – but we need to stop pretending there is an easy line to be drawn between blocking human rights sites and blocking Rojadirecta or Dajaz1.

Cross-posted at Info/Law.

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The PII Problem: Privacy and a New Concept of Personally Identifiable Information

My article, The PII Problem: Privacy and a New Concept of Personally Identifiable Information (with Professor Paul Schwartz), is now out in print.   You can download the final published version from SSRN.  Here’s the abstract:

Personally identifiable information (PII) is one of the most central concepts in information privacy regulation. The scope of privacy laws typically turns on whether PII is involved. The basic assumption behind the applicable laws is that if PII is not involved, then there can be no privacy harm. At the same time, there is no uniform definition of PII in information privacy law. Moreover, computer science has shown that in many circumstances non-PII can be linked to individuals, and that de-identified data can be re-identified. PII and non-PII are thus not immutable categories, and there is a risk that information deemed non-PII at one time can be transformed into PII at a later juncture. Due to the malleable nature of what constitutes PII, some commentators have even suggested that PII be abandoned as the mechanism by which to define the boundaries of privacy law.

In this Article, we argue that although the current approaches to PII are flawed, the concept of PII should not be abandoned. We develop a new approach called “PII 2.0,” which accounts for PII’s malleability. Based upon a standard rather than a rule, PII 2.0 utilizes a continuum of risk of identification. PII 2.0 regulates information that relates to either an “identified” or “identifiable” individual, and it establishes different requirements for each category. To illustrate this theory, we use the example of regulating behavioral marketing to adults and children. We show how existing approaches to PII impede the effective regulation of behavioral marketing, and how PII 2.0 would resolve these problems.

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CELS VI: Half a CELS is Statistically Better Than No CELS

Northwestern's Stained Glass Windows Made Me Wonder Whether Some Kind of Regression Was Being Proposed

As promised, I’m filing a report from the Sixth Annual Empirical Studies Conference, held 11/4-11/5 at Northwestern Law School.  Several of the attendees at the Conference approached me and remarked on my posts from CELS V, IV, and III. That added pressure, coupled with missing half of the conference due to an unavoidable conflict, has delayed this post substantially.  Apologies!  Next time, I promise to attend from the opening ceremonies until they burn the natural law figure in effigy.  Next year’s conference is at Stanford.  I’ll make a similar offer to the one I’ve made in the past: if the organizing committee pays my way, I promise not only to blog the whole thing, but to praise you unstintingly.  Here’s an example: I didn’t observe a single technical or organization snafu at Northwestern this year.  Kudos to the organizing committee: Bernie Black, Shari Diamond, and Emerson Tiller.

What I saw

I arrived Friday night in time for the poster session.  A few impressions.  Yun-chien Chang’s Tenancy in ‘Anticommons’? A Theoretical and Empirical Analysis of Co-Ownership won “best poster,” but I was drawn to David Lovis-McMahon & N.J. Schweitzer’s Substantive Justice: How the Substantive Law Shapes Perceived Fairness.  Overall, the trend toward professionalization in poster display continues unabated.  Even Ted Eisenberg’s poster was glossy & evidenced some post-production work — Ted’s posters at past sessions were, famously, not as civilized. Gone are the days where you could throw some powerpoint slides onto a board and talk about them over a glass of wine!  That said, I’m skeptical about poster sessions generally.  I would love to hear differently from folks who were there.

On Saturday, bright eyed and caffeinated, I went to a Juries panel, where I got to see three pretty cool papers.  The first, by Mercer/Kadous, was about how juries are likely to react to precise/imprecise legal standards.  (For a previous version, see here.) Though the work was nominally about auditing standards, it seemed generalizable to other kinds of legal rules.  The basic conclusion was that imprecise standards increase the likelihood of plaintiff verdicts, but only when the underlying conduct is conservative but deviates from industry norms.  By contrast, if the underlying conduct is aggressive, jurors return fewer pro-plaintiff verdicts.  Unlike most such projects, the authors permitted a large number of mock juries to deliberate, which added a degree of external validity.  Similarly worth reading was Lee/Waters’ work on jury verdict reporters (bottom line: reporters aren’t systematically pro-plaintiff, as the CW suggests, but they are awfully noise measures of what juries are actually doing).  Finally, Hans/Reyna presented some very interesting work on the “gist” model of jury decisionmaking.

At 11:00, I had to skip a great paper by Daniel Klerman whose title was worth the price of admission alone – the Selection of Thirteenth-Century Disputes for Litigation.  Instead, I went to Law and Psychology III.  There, Kenworthey Bilz presented Crime, Tort, Anger, and Insult, a paper which studies how attribution & perceptions of dignitary loss mark a psychological boundary between crime and tort cases.  Bilz presented several neat experiments in service of her thesis, among them a priming survey- – people primed to think about crimes complete the word “ins-” as “insult,” while people primed to think about torts complete it as “insurance.”  (I think I’ve got that right – – the paper isn’t available online, and I’m drawing on two week old memories.)

At noon, Andrew Gelman gave a fantastic presentation on the visualization of empirical data.  The bottom line: wordles are silly and convey no important information.  Actually, Andrew didn’t say that.  I just thought that coming in.  What Andrew said was something more like “can’t people who produce visually interesting graphs and people who produce graphs that convey information get along?”

Finally, I was the discussant at an Experimental Panel, responding to Brooks/Stremitzer/Tontrup’s Framing Contracts:Why Loss Framing Increases Effort.  Attendees witnessed my ill-fated attempt to reverse the order of my presentation on the fly, leading me to neglect the bread in the praise sandwich.  This was a good teaching moment about academic norms. My substantive reaction to Framing Contracts is that it was hard to know how much the paper connected to real-world contracting behavior, since the kinds of decision tasks that the experimental subjects were asked to perform were stripped of the relational & reciprocal norms that characterize actual deals.

CELS: What I missed

The entire first day!  One of my papers with the cultural cognition project, They Saw a Protest, apparently came off well.  Of course, there was also tons of great stuff not written from within the expanding cultural cognition empire.  Here’s a selection: on lawyer optimism; on public housing, enforcement and race; on probable cause and hindsight judging; and several papers on Iqbal, none of which appear to be online.

What did you see & like?

3

Scoring Ourselves to Economic Death

In The New York Times, Stephanie Rosenbloom asks readers to “imagine a world in which we are assigned a number that indicates how influential we are.”  That number would help determine our success at getting a job, hotel-room upgrade, break on a service, or free samples at the store.  As Rosenbloom tells us, imagine no more, companies, such as Klout, PeerIndex, and Twitter Grader, are mining our social media activities and assigning us influence scores.  Social scoring is based on our online social network activity, including the number of followers, friends, and the extent to which our online activity gets people moving.  If if you recommend a salon to your social network friends and they follow suit, your good word has two functions.  You’re doing a good thing for your friends and the salon (let’s hope), and now you’re doing good for you.  Because you have inspired people to take action, your influence score may rise.  In the present, people with high scores get preferential treatment by retailers.  More than 2,500 marketers are now using Klout’s data.  Audi will begin offering Facebook users promotions based on their Klout score.  The Las Vegas Palms Hotel and Casino is using Klout data to give highly rated guests an upgrade or tickets to a show.  In the future, those scores could be used by prospective employers, friends, and dates.

On the one hand, this market trend has something important to commend — its visibility.  Consumers can find out their influence scores and work to raise them.  By contrast, the impact of behavioral advertising is often hidden.  We are tracked and scored in databases and have no idea how it shakes out.  Joe Turow’s excellent book Niche Envy explains that consumers know very little about how their data personalizes market transactions.  Some individuals may end up as haves and others as have-nots, but neither group knows the extent of it.  As Turow explains, “our simple corner store is turning into a Marrakech bazaar–except that the merchant has been analyzing our diaries while we negotiate blindfolded, behind a curtain, through a translator.”  On the other hand, the information isn’t perfect and the algorithms secret so people may waste time doing things that they believe will raise their scores but don’t.  But that isn’t really troubling, unless every job or blog post had the effect we hoped it might.  What’s troubling is the trend’s implications for society and culture.  It seems old school to say that people blog, make friends, and engage in online chats to play, experiment, and create culture.  Now, they may feel pressured to do all of these things as a matter of economic necessity.  We may forgo experimentation for product endorsements, and idle chatter for better job prospects.  This makes our children’s choice to engage with social media seem like less of choice than a carefully cultivated necessity.  It also spells far more trouble for people who are already victimized, those who cyber mobs target with lies, threats, technical attacks, and privacy invasions.  They go offline or write under pseudonyms to protect themselves.  We now know that those choices (if we can call it that) cost more economically than they already do aside from the many other costs that my work discusses.  I imagine there’s more to this influence score story but I thought I’d share my initial take.

5

A Gummy Lawsuit

A man has bad teeth.  He chews Trident Xtra Care gum, which promises that it “Strengthens and Rebuilds Teeth” by “fill[ing] in the tiny crevices where cavities can form and leav[ing] teeth more resistant to plaque acids.”  His teeth remain rotten.  It’s America.  So he sues for deceptive business practices, and seeks to represent a class of gum purchasers.   You name the defenses.

4

More on Pizza and Puffery

Like Nate, the Domino’s puffery commercial caught my eye.  In addition to his concerns, the commercial prompted me to think about at least two other issues related to the commercial’s effectiveness.

First, given that Domino’s only has a couple of seconds to get across its message, do most viewers really appreciate the reference to puffery?  To be sure, Domino’s loves it so much that they have dedicated a whole site to the “Stop the Puffery” idea and “calling out Papa John’s”.  Moreover, it seems to be garnering a lot of buzz on legal blogs, such as these thoughts on ContractsProf Blog and Above the  Law.  But as those posts reveal, the initial puffery reference stems from an old case between Papa John’s and Pizza Hut where Papa John’s essentially admits that its “Better Ingredients. Better Pizza” slogan is puffery in order to avoid Pizza Hut’s claim that ads using the slogan were false and misleading.   Interestingly, the Fifth Circuit case notes that “Pizza Hut does not appear to contest the truthfulness” of Papa John’s factual assertions that Pizza Hut used frozen dough, made its dough using “whatever comes out of the tap,” and made its sauce from remanufactured tomato paste.  Instead, Pizza Hut suggest that the ingredients make no difference in terms of taste.   In any event, the Fifth Circuit concludes that Papa John’s slogan is non-actionable puffery and thus did not really impact people’s buying decision.  From Domino’s perspective, calling Papa John’s slogan puffery is supposed to get across the idea that the slogan is “NOT FACT”–or in Papa’s John’s words, involves claims about “common sense choice.”  But it is not clear how much, if any, of that gets across in the ad. 

Second, wasn’t it just last month that Domino’s launched an ad strategy based on a mea culpa where company executives not only quoting comments likening Domino’s crust to cardboard and the sauce to ketchup, but also comments like “worst excuse for pizza I ever had,” and “totally devoid of flavor”?  The apology strategy seemed both bold and risky.  Though one could argue that it is only a few steps removed from ads that offer “new and improved” products, except those ads don’t explicitly admit that the old product was relatively worse.  Nevertheless, Domino’s apologetic strategy seems at odds with the attack strategy in these puffery commercials.   Indeed, the apology appears to be aimed at fostering good will and a positive outlook.  Moreover, the apology seems to be at the very least an implicit acknowledgement that Domino’s pizzas (and ingredients) were worse than their competitors.  So the puffery attack seems a bit hard to swallow. 

But in the interest of being honest, I will admit that I have not yet tasted the new and improved Domino’s pizza, and hence can’t really say anything about the pizza. . .just the pizza ad.

2

Marketing and Kids

Although I tend to prefer less regulation in many cases, the pictures below seem to call for a little more discussion about how products are marketed to kids. Candy in that mimics many of the attributes of adult products such as cigarettes probably makes it easier for a kid to think they ought to try the real thing and maybe soon. As I have noted before, the warning labels on cigarettes in other countries are quite a bit more stark (some simply state in large font “Smoking kills”.

As a trademark point, one might wonder whether an infringement action or maybe a dilution one would work. One might think cigarette makers have entered the cigarette entry market (Anyone remember Joe Camel?). Dilution by blurring may apply too, but a tarnishment claim may be more difficult as I think candy (absent those pesky four out of five dentists) is still seen as a step up from tobacco. All kidding aside, even if one argues that adults can make informed decisions, it seems to me that packaging candy to look quite similar to major cigarette brand packaging is an error. You make the call about these images and what, if anything, should be done.

The ones with cellophane wrapping look even more like a training kit to me.

Candy Cigarettes 2

Candy Cigarettes 3