Ben Edelman proposes Bill of Rights for Online Advertisers.

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Towards a Bill of Rights for Online Advertisers

Ben Edelman also recently gave Google a spray:

Against this backdrop comes Google's AdWords API Terms & Conditions. The API could easily facilitate exactly copying and synchronizating ads across ad platforms. But in a remarkable set of legal restrictions, Google specifically prohibits tool makers from writing software to copy data from one ad platform to another -- disallowing the export and synchronization features advertisers would need in order to easily and cost-effectively use multiple platforms. Google also requires that AdWords data "be stored separate" from data for other ad platforms -- separate database instances for Google versus competitors, increasing cost and complexity, and impeding straightforward database queries that make comparisons across ad platforms. An earlier version of the T&C's even prohibited charts and tables comparing price and quality at Google versus competitors. Google gives each tool writer a different API key, and Google can disable a key at a moment's notice -- forcing tool makers to follow Google's rules, like them or not, lest Google disable a tool and leave customers without the programs they paid for.

In my view, these restrictions are outrageous. Google has no proper basis limiting how advertisers use, copy, or store ads, keywords, and bids that advertisers themselves designed, wrote, and chose. And Google's restrictions directly hinder competition -- making it that much harder for competing ad platforms to attract advertisers and increase revenues. Furthermore, these restrictions offer zero plausible pro-competitive benefit.

Google's API restrictions stand directly at odds with Google's rhetoric on data portability. Recall the 2006 promise from Google CEO Eric Schmidt: "We [Google] would never trap user data." And last week Google's Data Liberation Front claimed Google wanted "as little as possible" preventing advertisers from extracting their data from Google systems. I credit Google's efforts to facilitate data portability in its ancillary businesses, like document sharing and image hosting. But when it comes to the one business where Google makes billions of dollars -- and where Google has 70%+ market share -- Google's actions reveal the company's willingness to put its own bottom line before advertisers' interests and, for that matter, fair competition.

I wrote up these concerns last year, both in PPC Platform Competition and Google's "May Not Copy" Restriction and in subsequent congressional testimony. I hear persistent rumors of regulatory concern at these provisions. But fifteen months after I first flagged this obstacle to competition, the offending terms are still in effect.

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It applies to all advertisers, including those using affiliate networks.

Yet there are challenges, particularly when networks of intermediaries place ads through convoluted relationships, and all the more so when advertising powerhouses dictate unsavory terms. The result is a troubling mess of ads gone wrong—advertisers charged in ways they didn’t fairly agree to, and on terms they didn’t meaningfully accept. These problems threaten to destabilize online advertising—wasting advertisers’ budgets, slowing transition to online formats, and reducing payments to online publishers.
But online advertising doesn’t have to be a wild west. In the sections that follow, I propose five specific rights advertisers should demand as they buy online placements:

1. An advertiser’s right to know where its ads are shown. It is nonsense to pay for ad space without knowing where an ad will appear; sites vary too much in user quality and context. Even for “blind buys,” advertisers need enough information to determine whether a given site qualifies to show an ad. Anything less undermines accountability—inviting fraudulent sites that devour advertisers’ budgets. And with all manner of fraud—from spyware pop-ups to invisible banners to adult sites slipping into networks that claim to be brand-friendly—advertisers need to be wary.

2. An advertiser’s right to meaningful, itemized billing. Clear records protect advertisers from accounting games. Otherwise, ad networks can claim “We already credited you for those clicks,” knowing that advertisers cannot prove otherwise. But some ad networks provide invoices that are opaque at best.

3. An advertiser’s right to use its data as it sees fit. Campaign configuration details (such as keywords and targeting) are an advertiser’s own creation, to be retrieved whenever and however the advertiser chooses. Same for records of campaign performance. Yet some ad networks impede data portability in an attempt to increase their share of advertisers’ spending. Such restrictions can lock advertisers into needlessly expensive ad platforms—sharply increasing advertising costs.

4. An advertiser’s right to enjoy the fruits of its advertising campaigns. When a user clicks an ad, the advertiser pays fair value to reach that user. But in a world of behavioral targeting, a network can later resell that same user to the advertiser’s direct competitor. Click one airline’s ad, and a network may conclude you’re in the market for travel—then show ads for other carriers. That’s a poor value for the advertiser whose spending sparked the targeting.

5. An advertiser’s right to resolve disputes fairly and transparently. Ad networks generally write the contracts that govern their dealings with advertisers. Networks often use this drafting power to tilt contracts in their favor—disclaiming promises that ads will appear anywhere in particular, and denying responsibility for fraud, even when they know about it and fail to take action. At face value, these contracts purport to grant networks effective immunity from advertisers’ complaints. But advertisers don’t accept such one-sided provisions in other procurement contexts, and they need not be so lenient in online ad-buying.