DoubleClick and Internet DoubleClick and Internet PrivacyPrivacy

Craig LizotteCraig Lizotte

Mission StatementMission Statement DoubleClick is your partner in achieving success with digital DoubleClick is your partner in achieving success with digital

marketing—whether you are a web publisher, marketer or marketing—whether you are a web publisher, marketer or advertising agency. We are a reliable, experienced, advertising agency. We are a reliable, experienced, innovative partner who can help you capitalize on the innovative partner who can help you capitalize on the opportunities that digital media bring, and meet the opportunities that digital media bring, and meet the challenges they present.challenges they present.

If you’re a marketer or agency, our people work to be sure If you’re a marketer or agency, our people work to be sure you get the best return on your advertising dollar. If you’re you get the best return on your advertising dollar. If you’re a web publisher, they partner with you to increase a web publisher, they partner with you to increase revenues.revenues.

Our integrated products work together to simplify and Our integrated products work together to simplify and streamline your advertising sales, buying, operations and streamline your advertising sales, buying, operations and billing. DoubleClick’s industry-leading reporting systems billing. DoubleClick’s industry-leading reporting systems enable you to stay on top of campaign performance at all enable you to stay on top of campaign performance at all times, across all digital media. It all combines to let you get times, across all digital media. It all combines to let you get on with what you do best. on with what you do best. 

Company OverviewCompany Overview

DoubleClick was the industry leader in DoubleClick was the industry leader in Internet advertising. They tracked web Internet advertising. They tracked web activity with cookies on their 1,500 activity with cookies on their 1,500 website network, and placed banner adds website network, and placed banner adds on 11,000 sites.on 11,000 sites.

They target advertised users of their They target advertised users of their website network by placing cookies on website network by placing cookies on their hard drive that would monitor their hard drive that would monitor browsing behavior. browsing behavior.

History History Kevin O’Conner founded DoubleClick in 1996.Kevin O’Conner founded DoubleClick in 1996.

David Rosenblatt joins the management team in 1997.David Rosenblatt joins the management team in 1997.

1999 Forester Research projected online advertising to be 33 billion in 1999 Forester Research projected online advertising to be 33 billion in 2004.2004.

In 2000 DoubleClick had: In 2000 DoubleClick had: 1,800 employees.1,800 employees. 7,000 customers.7,000 customers. Offices in 30 countries.Offices in 30 countries. Market capitalization of 10 billion.Market capitalization of 10 billion.

Stuart Frankel Senior Vice President joins DoubleClick in 2000.Stuart Frankel Senior Vice President joins DoubleClick in 2000.

February 2000 USA Today published, that DoubleClick’s plans to merge February 2000 USA Today published, that DoubleClick’s plans to merge with Abacus.with Abacus.

DoubleClick partners with goggle in 2007.DoubleClick partners with goggle in 2007.

Primary StakeholdersPrimary Stakeholders

Government: Congress and Government: Congress and Legislation.Legislation.

Federal Trades Commission (FTC).Federal Trades Commission (FTC). Center for Democracy and Center for Democracy and

Technology (CDT).Technology (CDT). TRUSTe TRUSTe Marketers Marketers Venture CapitalistVenture Capitalist ConsumersConsumers

Management TeamManagement Team

Kevin Ryan – President Kevin Ryan – President Kevin O’Conner - Founder Kevin O’Conner - Founder

David Rosenblatt - CEO David Rosenblatt - CEO

Management TeamManagement Team

Stephanie AbramsonStephanie Abramson - General Counsel, the head - General Counsel, the head of legal and privacy related matters for DoubleClick.of legal and privacy related matters for DoubleClick.

Stuart FrankelStuart Frankel - Senior Vice President. - Senior Vice President.

Ben RegensburgerBen Regensburger - President, DoubleClick - President, DoubleClick International. International.

Charlie DicksonCharlie Dickson – CFO – CFO

eCommerce InitiativeeCommerce Initiative Click-stream is the process of collecting, Click-stream is the process of collecting,

analyzing, and reporting data such as: order of analyzing, and reporting data such as: order of web pages visited and mouse clicks visitors make. web pages visited and mouse clicks visitors make.

The information collected was identified by an ID The information collected was identified by an ID number assigned to a cookie on the users number assigned to a cookie on the users computer. computer.

User information would remain anonymous, and User information would remain anonymous, and not be linked to personal information unless the not be linked to personal information unless the user agreed. user agreed. (Agreements were broken during their attempt to (Agreements were broken during their attempt to merge with Abacus.)merge with Abacus.)

DoubleClick’s Strategy to Merge DoubleClick’s Strategy to Merge with Abacuswith Abacus

DoubleClick’s strategy was to integrate their database with DoubleClick’s strategy was to integrate their database with Abacus’s offline database. It could then better target internet Abacus’s offline database. It could then better target internet users by knowing their buying and browser behavior. users by knowing their buying and browser behavior.

It formed Abacus online. It formed Abacus online. Websites would identify users by name.Websites would identify users by name. Click-stream information would be combined with personal Click-stream information would be combined with personal

information. information. Information would be collected by purchases, surveys and Information would be collected by purchases, surveys and

drawings.drawings. Users would have the opportunity to opt-out.Users would have the opportunity to opt-out. Users could choose to receive targeted advertisements.Users could choose to receive targeted advertisements. Information collected would only benefit the consumer.Information collected would only benefit the consumer. No intention of selling information to 3rd parties.No intention of selling information to 3rd parties. Would not ask information about medical, financial or, sexual Would not ask information about medical, financial or, sexual

browsing or transactions or children’s browsing.browsing or transactions or children’s browsing. Getting the right ad to the right person at the right time.Getting the right ad to the right person at the right time. Instead of target marketing the computer, they could now target Instead of target marketing the computer, they could now target

the individual consumer. Since there can be many users per the individual consumer. Since there can be many users per computer. computer.

Abacus Abacus Abacus was the leader in collecting Abacus was the leader in collecting

information from catalog purchases. It had a information from catalog purchases. It had a five year buying profile of 88 million five year buying profile of 88 million households.households.

Abacus collected Personal information such Abacus collected Personal information such as:as: NameName AddressAddress Phone numberPhone number Credit card numbersCredit card numbers IncomeIncome Purchases historyPurchases history

Industry and MarketIndustry and Market

In 2000 had a market capitalization of $10 In 2000 had a market capitalization of $10 Billion.Billion.

11stst Quarter revenues went up 179% from Quarter revenues went up 179% from the previous quarter at $110 million with a the previous quarter at $110 million with a gross profit of $53 million. gross profit of $53 million.

Forester Research predicted that online Forester Research predicted that online advertising would increase from $3.3 advertising would increase from $3.3 Billion in 1999 to $33 Billion in 2004.Billion in 1999 to $33 Billion in 2004.

Privacy LawsPrivacy Laws The U.S. Constitutions closest privacy law was the The U.S. Constitutions closest privacy law was the

Fourth Amendment, which restricted searches and Fourth Amendment, which restricted searches and seizures by government.seizures by government.

1974 Internet Privacy Act1974 Internet Privacy Act - Restricted information - Restricted information gathered for one purpose to be used for another gathered for one purpose to be used for another purpose or shared with another government agency.purpose or shared with another government agency.

1988 Video Privacy Protection1988 Video Privacy Protection - Prohibited video - Prohibited video tape service providers from disclosing information tape service providers from disclosing information about rentals or request from individuals.about rentals or request from individuals.

1994 Drivers License Privacy Protection Act1994 Drivers License Privacy Protection Act - -Prohibited states from selling deriver’s license Prohibited states from selling deriver’s license information.information.

Privacy LawsPrivacy Laws 1994 Fair Credit Card Reporting Act1994 Fair Credit Card Reporting Act - - Regulated the disclosure Regulated the disclosure

of credit application data and credit histories. of credit application data and credit histories.

1994 Electronic Communications Privacy Act1994 Electronic Communications Privacy Act - Prohibited - Prohibited unauthorized access to e-mail, and other statutes prohibited unauthorized access to e-mail, and other statutes prohibited unauthorized wiretaps.unauthorized wiretaps.

1999 Financial Services Modernization Act1999 Financial Services Modernization Act - Limited - Limited disclosure of nonpublic personal information to nonaffiliated third disclosure of nonpublic personal information to nonaffiliated third parties unless disclosure and opt-out requirements were met.parties unless disclosure and opt-out requirements were met.

1999 Children’s Online Privacy Protection Act1999 Children’s Online Privacy Protection Act – – Prohibited Prohibited collecting information from children under 13 unless parents collecting information from children under 13 unless parents consent. consent.

The FTC decided they would not regulate internet privacy, so they The FTC decided they would not regulate internet privacy, so they established an advisory Committee on Online Access and Security.established an advisory Committee on Online Access and Security.

Controversy Controversy Because Abacus has a database with Because Abacus has a database with

personal information, the idea of them personal information, the idea of them joining with DoubleClick was a bad idea joining with DoubleClick was a bad idea because, they specified in their contract because, they specified in their contract they would not collect personal they would not collect personal information unless the user consented.information unless the user consented.

There was fear that DoubleClick would link There was fear that DoubleClick would link

the databases. the databases.

DoubleClick canceled its plan to merge DoubleClick canceled its plan to merge with Abacus’s database. Now they had to with Abacus’s database. Now they had to come up with a strategy to gain pubic come up with a strategy to gain pubic confidence back and remain in business.confidence back and remain in business.

Online AdvertisingOnline Advertising

The internet is free because of online The internet is free because of online advertising. advertising.

TV, Radio and Newspapers were funded by TV, Radio and Newspapers were funded by advertising. advertising.

A pole 70% of people said they were A pole 70% of people said they were aware.aware.

2/3 said they liked personalized 2/3 said they liked personalized information. information.

90% said they wanted control of how the 90% said they wanted control of how the information was used. information was used.

TRUSTeTRUSTe

TRUSTe is a nonprofit organization that certified TRUSTe is a nonprofit organization that certified the privacy of a website If:the privacy of a website If:

1) Adoption and implementation of privacy policy.1) Adoption and implementation of privacy policy.

2) Notice and disclosure.2) Notice and disclosure.

3) Choice and consent. 3) Choice and consent.

4) Date security and quality access to personal 4) Date security and quality access to personal information. information.

Privacy Concerns Privacy Concerns Because privacy policies could be changed at Because privacy policies could be changed at

anytime, privacy activists became suspicious.anytime, privacy activists became suspicious.

Companies could violate their policies without Companies could violate their policies without detection.detection.

Click-stream data was invisible to users. Most of Click-stream data was invisible to users. Most of them were not aware they were being tracked, so them were not aware they were being tracked, so they didn’t know they had to opt-out.they didn’t know they had to opt-out.

Consumers were tracked over and over without Consumers were tracked over and over without having a relationship with the company.having a relationship with the company.

It was ok for Amazon to use this technology It was ok for Amazon to use this technology because customers had a relationship with them.because customers had a relationship with them.

Privacy ConcernsPrivacy Concerns

The Center of Democracy and Technology The Center of Democracy and Technology (CDT) began to educate Internet users, (CDT) began to educate Internet users, and encourage them to write letters to and encourage them to write letters to DoubleClick concerning their policies.DoubleClick concerning their policies.

CDT provided an opt-out option on CDT provided an opt-out option on websites within the network. websites within the network.

Cookies could be turned off in the internet Cookies could be turned off in the internet options on the browser.options on the browser.

Value to the ConsumerValue to the Consumer

Customizing advertisements based Customizing advertisements based on the user’s interests. on the user’s interests.

Cookies would greet the user by Cookies would greet the user by name, customized a personalized name, customized a personalized page, and remember their password page, and remember their password if specified for websites such as if specified for websites such as Amazon and e-mail sites. Amazon and e-mail sites.

Value CaptureValue Capture

Spend less on advertising. Spend less on advertising.

More efficient (shot in the dark)More efficient (shot in the dark)

50%-100% higher then untargeted bulk 50%-100% higher then untargeted bulk advertising. advertising.

If Click-stream combined with Abacus If Click-stream combined with Abacus would increase targeted effectiveness would increase targeted effectiveness even more.even more.

Business IntelligenceBusiness Intelligence

The analysis from click-stream can The analysis from click-stream can be used to make predictions with be used to make predictions with business intelligence applications. business intelligence applications.

DSIRDSIR Target marketing was a more efficient way to Target marketing was a more efficient way to

advertise. If everyone was doing target advertise. If everyone was doing target marketing, they were making more money. By marketing, they were making more money. By not implementing target marketing strategy not implementing target marketing strategy would result in fewer sales then competitors. would result in fewer sales then competitors.

Markets change continuously. Market research Markets change continuously. Market research helps you stay ahead of competition. helps you stay ahead of competition.

Competitors of sites who used click-stream would Competitors of sites who used click-stream would use target marketing and would have the use target marketing and would have the advantage over competitors not using click-advantage over competitors not using click-stream.stream.

Competitive Risk Competitive Risk

Privacy LawsPrivacy Laws Software that made users anonymous and Software that made users anonymous and

masked their ID: masked their ID: Webroot.comWebroot.com TopClick InternationalTopClick International Anonymizer.comAnonymizer.com Zero-KnowledgeZero-Knowledge

Privacy Preference Protection (P3P) Privacy Preference Protection (P3P) software plug allowed users to specify software plug allowed users to specify what information they wanted to give. what information they wanted to give.

Missed OpportunitiesMissed Opportunities Merging with Abacus.Merging with Abacus.

They could have just sold software to companies such as They could have just sold software to companies such as Amazon so the company’s could do their own target Amazon so the company’s could do their own target marketing. marketing.

Double Click’s database was better because there was a Double Click’s database was better because there was a larger pool of data than there would be from individual larger pool of data than there would be from individual sites. sites.

With a larger pool of data, better targeting could be used to With a larger pool of data, better targeting could be used to users browsing on competitive sites.users browsing on competitive sites.

Sell P3P software. Sell P3P software.