Perhaps the most powerful - but largely invisible - force shaping our digital media reality is the role of interactive advertising and marketing. Much of our online experience, from websites to search engines to social networks, is being shaped to better serve advertisers. Increasingly, individuals are being electronically "shadowed" online, our actions and behaviors observed, collected, and analyzed so that we can be "micro-targeted." Now a $20 billion a year industry [2007 estimates] in the U.S., with expected dramatic growth to $80 billion or more by 2011, the goal of interactive marketing is to use the awesome power of new media to deeply engage you in what is being sold: whether it's a car, a vacation, a politician or a belief. An explosion of digital technologies, such as behavioral targeting and retargeting, "immersive" rich media, and virtual reality, are being utilized to drive the market goals of the largest brand advertisers and many others.

A major infrastructure has emerged to expand and promote the interests of this sector, including online advertising networks, digital marketing specialists, and trade lobbying groups.

The role which online marketing and advertising plays in shaping our new media world, including at the global level, will help determine what kind of society we will create.

* Will online advertising evolve so that everyone's privacy is truly protected?

* Will there be only a few gatekeepers determining what editorial content should be supported in order to better serve the interests of advertising, or will we see a vibrant commercial and non-commercial marketplace for news, information, and other content necessary for a civil society?

* Who will hold the online advertising industry accountable to the public, making its decisions transparent and part of the policy debate?

* Will the more harmful aspects of interactive marketing - such as threats to public health - be effectively addressed?

Yahoo! "Smarts" Are Your Loss of Privacy

"Many marketers haven't had the ability to tailor their display advertising messages at scale for different segments," said Yahoo spokesperson Gaude Paez, who described SmartAds as "Real-time custom advertising."...SmartAds makes heavy use of "customer insights" extracted from data Yahoo keeps on visitors, including their shopping, searching and Web surfing behaviors, as well as registration information and location data. The portal hopes the move will encourage large direct marketers to invest more heavily in online display ads, Paez said.

Yahoo's New SmartAds Product Aims to Ease Creative Production. Zachary Rodgers. July 2, 2007. ClickZ.

This Targeted Ad is for You--and Only You

"Marketers are taking great pains to create better-targeted online campaigns...

Yahoo's product, coined SmartAds...switches in text-based offers and simple graphical elements on the fly, based off behavioral targeting data. But Yahoo is not alone in trying to help marketers come up with more versions of better-targeted creative without significantly increasing the dollars they've always spent on single, mass messages. Real Time Content, which is partially funded by British Telecom... hopes to serve up the most relevant content -- entertainment, news and advertising content -- on the fly based on information that's known about the consumer and is having discussions with ad network Blue Lithium to help it cull that data.

"If I'm a soccer mom and you shot this nice ad on a road in Scotland, am I likely to test drive?" asked Naj Kidwai, CEO of Real Time Content. "No. But if you shot an ad that speaks directly to me I'm likely to answer the call to action."

Yahoo, Others Work to Up Relevance of Online Ads. Abbey Klaassen. Ad Age. July 2, 2007 [sub. required]

Mobile Behavioral Targeting: "A Heat-seeking Missile"

[interview with Bob Walczak, CEO of mobile ad network MoPhap]

"What we do is identify users by device and identify their device as they enter a site on our publisher network. From there we can aggregate information and create a behavioral profile based on a variety of criteria. Our approach to behavioral targeting is then geared to bringing the three main components online advertisers have grown accustomed to into the mobile sphere, telling them who users are, what they do in real time and what ads they tend to be most responsive toward. If you can combine the three in a mobile context, you've got a heat-seeking missile. You've also finally leveled the playing field somewhat between mobile and online... For one thing, the intent of mobile searchers and browsers is far more directly related to actionable intent and information, so the quality of targetable information is far more relevant... In theory what it entails is knowing not just that a consumer is interested in shopping for a car, or even that their tastes seem to run in the direction of auto type A versus auto type B, but the chain of personalized decision criteria and the decision-making process."