Cyber-democracy or cyber-hegemony? Exploring the political and economic structures of the Internet as an alternative source of information
Cyber-democracy or cyber-hegemony? Exploring the political and economic structures of the Internet as an alternative source of information
Library Trends

ABSTRACT

Although government regulation of the Internet has been decried as undercutting free speech, the control of Internet content through capitalist gateways--namely, profit-driven software companies--has gone largely uncriticized. The author argues that this discursive trend manufactures consent through a hegemonic force neglecting to confront the invasion of online advertising or marketing strategies directed at children. This study suggests that "inappropriate content" (that is, nudity, pornography, obscenities) constitutes a cultural currency through which concerns and responses to the Internet have been articulated within the mainstream. By examining the rhetorical and financial investments of the telecommunications business sector, the author contends that the rhetorical elements creating "cyber-safety" concerns within the mainstream attempt to reach the consent of parents and educators by asking them to see some Internet content as value laden (sexuality, trigger words, or adult content), while disguising the interests and authority of profitable computer software and hardware industries (advertising and marketing). Although most online "safety measures" neglect to confront the emerging invasion of advertising/marketing directed at children and youth, the author argues that media literacy in cyberspace demands such scrutiny. Unlike measures to block or filter online information, students need an empowerment approach that will enable them to analyze, evaluate, and judge the information they receive.

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According to figures provided by the U.S. Census Bureau (2001), more than half of school-age children (6 to 17 years) had access to computers both in school and at home in the year 2000 (57 percent). With some 17 million children using the Internet in some capacity, including email, the Web, chat rooms, and instant messaging (Silver and Garland, 2004, p. 158), the Census Bureau estimates that 21 percent use the Internet to perform school-related tasks, such as research for assignments or taking courses online.

While these statistics underscore the growth and popularity of the Internet, particularly in schools and educational institutions, concerns have grown about the "safety" of using computer-mediated communication technology. Since the Internet became a mass medium in 1995, parents and schools have approached online content with reservation. As such, politicians, educators, child advocacy groups, and, most importantly, the computer industry, have been vocal advocates for patrolling the Internet and censoring certain kinds of illicit or objectionable content. Beginning in the late 1990s, Federal Trade Commission member Christine Varney summarized the emerging concerns about online safety:

All of us agree that children's online safety concerns are real and
pressing and that we must support the involvement of parents
raising children in this new, digital age. We understand that we
must all work together--industry, law enforcement, educators,
advocates--if American families are to realize the potential of this
new medium for enriching the lives of our children and fostering
their future success. (Rubin and Lamb, 1997)
Starting in 1997, an Internet/Online Summit was held in Washington, D.C., to enhance the safety and benefits of cyberspace for children and families. Key political figures, such as former vice president Al Gore and former attorney general Janet Reno, joined parents, as well as politicians, law enforcement officials, and educational administrators, to launch a national public education campaign, "America Links Up: An Internet Teach-In," designed to help Americans understand how to guide kids online (Rubin & Lamb, 1997).

On October 21, 1998, former president Bill Clinton signed into law the "Children's Online Privacy Protection Act" (COPPA). This measure was enacted by Congress on April 21, 2000, to "prohibit unfair or deceptive acts or practices in connection with the collection, use, or disclosure of personally identifiable information from and about children on the Internet" under the age of thirteen (Grossman, 2000). Along this trajectory, Congress passed the Children's Internet Protection Act (CIPA) and the Neighborhood Internet Protection Act (NCIPA) in December 2000, which required schools and libraries that receive federal money for Internet connections to adopt Internet safety policies in 2001. The proposed safety measures include usage agreements for proper student use of this medium, audit-tracking devices to supervise student Internet perusal, and software filtration devices designed to block inappropriate sites in schools (Trotter, 2001).

In 2002 the Bush administration proposed a "National Strategy to Secure Cyber Space," offering security recommendations for U.S. citizens, businesses, and organizations using computers (Carlson, 2002). Since then the Federal Trade Commission has offered testimony before special committees and the House of Representatives about online pornography through a series of "law enforcement actions against fraud artists whose deceptive or unfair practices involve exposing consumers, including children, to unwanted pornography on the Internet" (Federal Trade Commission, 2004, p. 1).

In addition to these federal initiatives, many states have measures designed to protect children from online predators. In Texas, Attorney General Greg Abbott added more investigators to the Texas Internet Bureau to keep kids safe from those who use online means to prey on children. As Assistant Attorney General Sparks explained, "The Attorney General wants the public to know that he's tasking people with patrolling the Internet and trying to make it safe for kids; the down side is that more and more children on a daily basis are getting online and on the Internet and as every additional child gets on, that's one more potential target" (quoted in Ochoa, 2003).

Likewise, educators have expressed concerns about online information overload. According to one school administrator, accessing the Internet in schools is less predictable: "If you used to bring your class to the school library, you pretty much had a sense of what was available for the children to research; now you have no idea ... they are going to hit sites that are appropriate and sites that are inappropriate" (quoted in Shyles, 2003, p. 176).

Despite a commitment to online "security" in schools, libraries, and homes from so many constituents, few recommendations have materialized into solid strategies or funding initiatives. Almost all of the proposed solutions and policies ignore the more relevant question of how private computer companies, Internet service providers, corporations, and governments stand to gain financially and politically by deciding what kind of information will be "censored" and what kind will be promoted. In fact, it could be argued that the Internet content "crisis" dominating public policy and mainstream media coverage has produced a cultural climate ripe for the commercial exploitation of parents and educators. In this article I argue that such a discursive trend manufactures consent through a hegemonic force that overlooks the invasion of advertising or marketing strategies targeted at young people online. By examining the rhetorical and financial investments of the telecommunications business sector, I contend that the mainstream articulation of "Internet safety" invites parents and educators to regard some Internet content as value-laden (sexuality, obscene language), while disguising the interests and authority of profit-minded commercial enterprise (advertising and marketing).

What is more, the democratic potential of the Internet as a means to accessing alternative information and perspectives otherwise absent from the mainstream media continues to be threatened by the consolidation of increasingly powerful global media giants, such as Time Warner and Microsoft, which have much to gain from controlling the content Internet users access at home or at school. Consequently, an examination of the political and economic forces on the Internet is necessary for librarians and educators interested in understanding the benefits and limits of the Internet as a means of alternative communication.

EXPLORING THE MEANS TO FILTERING ONLINE CONTENT

Parental Guidance

As a result of this discourse, a number of solutions have been advanced to ward off illicit content appearing on the computer screens of young Internet users, beginning with parental guidance. CyberTipLine grew out of the 1997 Internet/Online Summit and is currently in operation today. Run by the U.S. government and the National Center for Missing and Exploited Children, parents can notify authorities of incidents of online child pornography and child predation. Another derivative of the summit's "America Links Up" project is the industry-sponsored "GetNetWise" Web site, which was launched in 1999. The "user empowerment" service, which involves a coalition of numerous Internet industry partners and advocacy organizations, (1) offers parental advice, including information about filters to block sexually explicit material, as well as a variety of tools to help parents and caregivers monitor a child's online activities and find browsers for kid-friendly sites. As one sponsor, AT&T, notes in its promotional material, "Our involvement with GetNetWise reflects our commitment to help users have the best possible online experience" (GetNetWise, 2004).

A more well-known parental guidance initiative, passed in April 2000, was the Children's Online Privacy Protection Act (COPPA). In accordance with COPPA, the Federal Bureau of Investigation offers "A Parent's Guide to Internet Safety," which advises parents to "utilize parental controls provided by your service provider and/or blocking software" and "Monitor your child's access to all types of live electronic communications (chat rooms, instant messages, Internet Relay Chat, etc.), and monitor your child's email" (Federal Bureau of Investigation, 2004).

Other parental guidance measures have been created to address online advertising and marketing as well as issues of privacy. Parent advocacy groups, such as Commercial Alert, Consumer Action, the Center for Media Education, and Computer Professionals for Social Responsibility, have taken up the cause of parents concerned about online marketing measures targeted at children. For example, Commercial Alert has made requests to the Federal Communications Commission and the Federal Trade Commission to require disclosure of embedded advertising in a variety of media and has created a "Parent's Bill of Rights" seeking to empower parents in the face of an aggressive commercial culture (Commercial Alert, 2003).

Proof-of-Age/Shielding Systems

In addition to parental guidance, many online providers and Webmasters have adopted proof-of-age/shielding systems that use credit card access as another means of content filtering. While COPPA sought to protect children thirteen and under, those located in the fourteen to eighteen year range were not covered by legislation. Providing proof of age before being allowed to access the content of a desired online site emerged as a means to address this gap. This system works in the same way that fraud-screening technology works: merchants collect user information at their Web sites for instant age or identity verification. Once online users submit their name, zip code, date of birth, and age, they are checked through an international electronic database of government-issued identifications. This allows site providers or merchants to determine the consumer's identity within seconds. Sometimes additional measures, such as online name signature, are required so that user signatures are bound to a public record.

Proprietary Environments

Another reaction to the discourse of online safety has been the advocacy of proprietary environments, where content is screened by editors into specific categories. For example, the leading Internet service provider, America Online (AOL), provides a blocking service that allows users (ostensibly parents) to limit a child's selected screen name to either a "Kids Only" area, which is recommended for children under twelve, or to a preteen/teen environment, with restricted use of chat rooms or newsgroups. According to the site, "Kids Only" is a collection of educational resources and entertainment areas as well as a preselected collection of child-oriented Internet sites, with AOL staff monitoring of message boards and chat rooms. AOL also promotes the company's "Parental Phone Line" for instructions and advice on choosing and maintaining the settings of this product (the premise here is that the settings are likely to be tampered with by savvy teens and preteens).

In addition to "Kids Only," AOL has aggressively marketed its AOL@School service, which had been adopted by more than 14,000 schools by 2004 (Williams, 2003). AOL@School offers six online learning portals for grades K-5, middle school, and high school so that students can access Web sites that have been preselected by educators as content and age appropriate. The software needed to access the portals comes with AOL's "parental controls" designed to "help ensure a safe, secure, age-appropriate experience" that can include school-controlled email, chat, and instant messaging (AOL, 2004). The popularity of "child safe" proprietary environments has not waned as Web browsers and popular search engines have created their own directories in an attempt to create safe havens for (and develop customer loyalty from) younger online users. Yahooligans' "Web Guide for Kids" is a collection of predominantly commercial links to online games, music, TV, science, news, jokes, "cool pages," arts and entertainment, and sports. Like most commercial proprietary environments, Yahooligans is riddled with advertisements and synergistic ties to commercial media products.

Internet Ratings Systems

For those seeking additional regulatory measures, Internet rating systems offer another approach. Unlike the rating system for television content that is uniformly and centrally organized by the television industry, Internet ratings are not assigned consistently by a centralized group of online content providers. The goal is the same, however: industry self-regulation over government regulation. According to ratings system advocates, many of whom work in the software and computer industry, Internet ratings are designed to make it "safe" for schools and parents to let their children access nonpornographic material without government directives. According to Paul Resnick, chairman of the World Wide Web Consortium group at the MIT Laboratory for Computer Science, which includes AT&T Laboratories and Microsoft, the Platform for Internet Content Selection (PICS) was originally created to allow parents, teachers, and librarians to review questionable materials that they would not want their children to come across on the Internet (Resnick, 1997).

Resnick explains, "prior to PICS there was no standard format for labels, so companies that wished to provide access control had to both develop the software and provide the labels. PICS provides a common format for labels, so that any PICS-compliant selection software can process any PICS-compliant label" (Resnick, 1997, p. 107). Yet unlike uniform rating labels,

a single site or document may have many labels, provided by
different organizations. Consumers choose their selection software
and their label sources (called rating services) independently.
This separation allows both markets to flourish: companies that
prefer to remain value-neutral can offer selection software
without providing any labels; values-oriented organizations,
without writing software, can create rating services that provide
labels. (Resnick, 1997, p. 107)

One of the leading Internet rating systems that uses PICS is SafeSurf, a group that offers ratings along with other tools to help parents and "net citizens" filter online information. One means to achieving its goal is to encourage online content providers to fill out a questionnaire using content descriptors to rate their Web sites. Unlike government- or industry-wide regulatory labeling efforts that may "brand" content, SafeSurf is interested in maintaining First Amendment rights by offering content providers greater latitude to self-rate their Web material. For example, rather than branding content that includes nudity as pornographic, users can distinguish their inclusion of nudity as scientific, sociocultural, artistic, titillating, graphic, or illegal. Once content providers rate their Web sites or directories, they can download the SafeSurf rated logo of their choice. A SafeSurf staff member verifies the rating and sets up the chosen ratings label. Parents and educators can then use PICS compliant software/browsers to read the settings and to use the ratings to filter content that is not desired. As the SafeSurf group explains, "PICS allows content providers to rate their pages and parents to set passwords and levels for their children. Then, PICS compliant software/browsers will read the settings and use the ratings to filter content that is not desired" (SafeSurf, 2004a).

The Internet Content Rating Association (ICRA) is another international, independent, nonprofit organization that seeks to "empower the public, especially parents, to make informed decisions about electronic media by means of the open and objective labeling of content" (ICRA, 2004). ICRA's dual aims are to "protect children from potentially harmful material and to protect free speech on the internet." Like SafeSurf, Web authors complete an online questionnaire describing the content of their site, upon which ICRA generates a content label using PICS computer coding, which the author adds to his/her site. Parents and Internet users can then set their Internet browser to accept or decline access to Web sites based on the labels and user preferences. PICS is now a standard feature included in Internet software and browsers such as Microsoft Explorer.

Third-Party Rating Systems

While ratings systems are designed to allow content providers to voluntarily label the content they create and distribute, third-party rating systems "enable multiple, independent labeling services to associate additional labels with content created and distributed by others. Services may devise their own labeling systems, and the same content may receive different labels from different services" (ICRA, 2004). In other words, online watchdog groups interested in protecting children from online predators or illicit material can offer their own set of restrictive control tools for material that they deem to be objectionable. One such group is WiredSafety, formerly known as CyberAngels, led by Parry Aftab, an experienced international attorney and author of The Parent's Guide to Protecting Your Children In Cyberspace and A Parent's Guide to the Internet. Lauded as "one of Internet safety's most influential players," (Hill, 2000), Aftab has emerged as a nonprofit leader who has created coalitions with many governmental and nongovernmental agencies, including the FBI's Innocent Images anti-child pornography and exploitation task force. She was appointed the founding American director of UNESCO's global Child Safeline project and currently heads WiredSafety, "the largest online safety, education and help group in the world" (WiredSafety, 2004). With more than 9,000 volunteers worldwide, the group is a coalition of various Internet safety groups, such as WiredKids.org, WiredTeens, Teenangels, and CyberMoms and CyberDads, and their affiliate, WiredCops.org, all of whom patrol the Internet for child pornography, child molesters, and cyberstalkers. Additionally, WiredSafety offers a variety of educational and help services for online users. Some of its volunteers access and review family friendly Web sites, filter software products and Internet services, and post their findings on the Web. The group even has a "Cyber911 help line" that offers net users access to help when they need it online. SurfWatch is another online ratings system designed for parental supervision. It too prevents access to Web, gopher, and FTP sites that SurfWatch's team of "net-surfers" have found objectionable. They maintain an updated list of "not-for-children" Web sites that can be subscribed to electronically.

Commercial Filtering Software and Databases

A more intensive effort to censor "inappropriate" online content has come from commercial filtering software companies (often working in conjunction with powerful Internet content providers and third-party ratings systems). Also known as "censorware," these filtering products, which include Net Nanny, CyberPatrol, Cyber Sitter and N2H2, range in cost from $25.99 to $80 and are heavily marketed to parents, educational administrators, and libraries. Designed to be installed on home or school computers or to work with network routers or firewall, cache, or proxy devices, these products claim to offer safety measures for youth using computers for online research and recreation. Essentially, most of these programs work by using a combination of filtering and blocking strategies, such as the blocking of Web sites denoted through keywords and databases and the blocking of individual Web sites by specific URLs.

One of the first filtering programs--and most commercially lucrative--is Net Nanny. According to its promotional Web site, Net Nanny[R] 5 is "the world's leading parental control software, [and] provides customers with the broadest set of Internet safety tools available today. Our award-winning software gives customers control over what comes into and goes out of their home through their Internet connection, while respecting their personal values and beliefs" (Net Nanny, 2004). Launched in 1998, Net Nanny is a tool allowing parents, teachers, administrators, and librarians to screen incoming and outgoing Internet information, particularly pornographic material. By identifying and blocking various sites and subjects considered inappropriate, the program blocks the Web addresses of known pornographic and illicit sites. Parents can add to the collection of forbidden "code words" used to detect and flag sites. The program works with all major online providers and in email. It can also prevent children from accessing specific files on a PC's hard drive, floppy drive, or CD-ROM. Like audit-tracking software programs, Net Nanny keeps a record of a child or student's Internet perusal, meaning that parents and teachers can check up on the sites that a child has perused.

With all of these features, it is no surprise that Net Nanny's popularity and financial success has led it to offer additional blocking software such as Net Nanny's Pop-Up Scrubber, which blocks pop-up ads, Net Nanny's AdFree, which blocks a range of Internet ads, spyware, and profiling cookies, and Net Nanny's Chat Monitor, which monitors and filters Instant Messaging and other online chat.

Another commercial service, CyberPatrol, works in the same way as Net Nanny by filtering harmful Web sites, newsgroups, and Web-based email. Also commercially successful, CyberPatrol licenses its "CyberLIST" database of site ratings to several additional vendors. Among its ratings categories are violence/profanity, partial nudity, full nudity, sexual acts, gross depictions, intolerance, satanic or cult, drugs and drug culture, militant/extremist, sex education, questionable/illegal and gambling, and alcohol and tobacco. Likewise, Cybersitter blocks sites and subjects deemed unacceptable by Internet users. It offers site lists for automatic blocking and allows parents to have added input in restricting programs, files, and games. According to PC Magazine, Cybersitter offers the strongest filtering and monitoring features, blocking content related to violence, hate, sex, and drugs (Munro, 2004). It also allows parents to choose from thirty-two content categories, such as free email sites, file sharing, wrestling, cults, and gambling, for those interested in added blocking categories. As with other similar products, it lets parents filter and monitor their children's activities without their knowledge and can record both sides of Instant Messaging sessions.

Joining in the mix of filtering software providers is N2H2 (acquired by Secure Computing in 2003), a company endorsed by eTesting Labs and the Kaiser Foundation as "the most effective and accurate" filtering program and extensive database of objectionable Internet sites (N2H2, 2004). It offers two product lines: Sentian, which is geared toward helping businesses manage their employee Internet access, and Bess, a popular program and database adopted by many schools and endorsed by the American Library Association to help schools and libraries meet CIPA rules for young Internet users.

With so many companies vying to be the best provider of filtering software, it is not surprising that Microsoft would venture into this area by offering its own industry standard Internet filter aimed at regulating youth-directed online content. AS part of its monopoly on the Internet browser software Internet Explorer (which accompanies its Windows platform), Microsoft has also implemented a filtering system that can be configured to block or log all data transfers, including World Wide Web pages, newsgroups, types of messages within any newsgroup, Internet Relay Chat, or Internet hosts known to have objectionable material for children.

QUESTIONING THE VIABILITY OF ONLINE "SAFETY" INITIATIVES

Although some of these Internet resources and restrictions make sense for certain schools depending upon the age group and grade level of Internet users, there are some problematic areas within each method that should be cause for concern. The main underlying difficulty raised by these "quasi-solutions" is that they narrowly define what is "inappropriate," relegating most objections to issues of nudity, sexuality, trigger words, or adult content. This focus neglects to confront the invasion of advertising or marketing strategies directed at children. In many respects, Internet commercialism seems to be a more serious concern, but one would never guess this considering the ad-strewn and content-compromised "solutions" to appropriate Internet content.

First, although child-directed advertising might not be as blatantly offensive, it certainly fosters "values" that, at present, are not considered objectionable to most governmental, parental, and commercial watchdog groups. Although the first tenet of media literacy explains that all media are constructions, the problem with advertising and marketing strategies is that they are so much a part of our social landscape and our everyday life that they appear to be natural. Subsequently, the conceptualization of what is inappropriate for children or students only helps to sustain the interests of a commercial system through the omission of advertising; advertising is omitted and thereby deemed appropriate. Just as parents, educators, and anticommercial groups, such as Commercial Alert, have protested the commercial imperatives of satellite-delivered school programs such as Channel One, a company that offers schools free satellite equipment in exchange for a captive audience of students forced to watch its daily, advertisement-driven programming, and the computer equivalent ZapMe!, which tried to turn "the schools and the compulsory schooling laws into a means of gaining access to a captive audience of children in order to extract market research from them and to advertise to them" (Commercial Alert, 2000), we need to be equally circumspect about the amount of advertising and marketing proliferating on "Kids Only" sites and via kid-safe filtering software (Schiffman, 2000).

Moreover, sustaining an Internet-based market economy whereby consumer software programs and proprietary environments become the antidote to inappropriate material is directly at odds with democratic means of dealing with these issues through public discourse, political action, and critical media literacy skills. Most of the products previously analyzed are produced and distributed by profit-making and publicly traded enterprises, such as the media conglomerates Time Warner, Microsoft, and Yahoo!. Obviously, it is good business to create and sell blocking software products or to offer third-party rating systems that decide--for parents, educators, and librarians--what is in their (both children/students and the company's) best interest. In a self-fulfilling business transaction, reports of inappropriate content as well as media and political hype about the Internet as an "unsafe environment" lend credence to, or create a functionalist need for, such products. As stated earlier, advertising is overlooked as "inappropriate content" because it is part of everyday consumer culture, unlike pornographic and hate sites, which exist beyond the boundaries of what is deemed "good" for children and teenagers. As Marxist philosopher Antonio Gramsci (1971) has noted, hegemony works within the terrain of everyday life and requires the consent of audiences--or in this case, parents, educators, and librarians. Hence, the commonly employed rhetorical elements that create paranoia about Internet content within the mainstream attempt to reach the consent of parents and educators by inviting them to see some Internet content as value-laden or problematic while camouflaging the interests and authority of a profitable computer software and hardware industry.

Although serious discussion about government regulation goes beyond the purviews of this study, several concerns must be raised regarding commercial software programs. First, the decision to block some sites over others is a very subjective decision. The problem with this kind of regulation is that some groups and individuals might attempt to censor material (under the guise of concerns for "safety") that threaten their own political and/or religious agenda. Dependence upon commercial Internet service providers and related filtering products limits the democratic principle of the free flow of information and puts commercial enterprise at the helm of online navigation, a troubling fact given that corporate culture can often be extremely conservative and self-serving when it comes to making censorship decisions. In one instance, America Online was charged with using filters to block out several Web sites associated with "liberal" political organizations. One of the top stories featured in Censored 2001 was AOL's liberal blacklist, whereby sites for the Democratic National Committee, Ralph Nader's Green Party, Ross Perot's Reform Party, the Coalition to Stop Gun Violence, and Safer Guns Now were labeled as "not appropriate for children" (Phillips & Project Censored, 2001, p. 111). Ironically, the youth filters did not prevent access to nudity or to conservative groups, including the National Rifle Association. Designed for America Online by the Learning Company, an educational software company owned by Mattel, such filtering programs confirm suspicions about the process of labeling and omitting Web sites according to political and economic interests.

This kind of censorship raises flags about the capabilities of large media conglomerates to limit access to material deemed politically at odds with commercial interests. Inasmuch as Disney was in a position to rebuke the distribution of Fahrenheit 9/11, Michael Moore's political documentary produced through Disney's Miramax film division, large multimedia conglomerates are poised to censor content that is politically or economically damaging to their enterprise.

Second, some of the trigger words used to block Internet sites might be legitimate subjects for research. For example, the often-cited example of an Internet user not being able to access research on breast cancer or sex education (if these words were denoted as trigger words) is indeed troubling. As PC Magazine reviewers of Cybersitter 9.0 explain, "Cybersitter errs on the conservative side; by default it may block sites you would deem okay" (Munro, 2004). A telling example of this problem is offered in an article featured in Electronic School Online. Author Lars Kongshem writes,

CYBERsitter yanks offending words from web pages without providing
a clue to the reader that the text has been altered. The mangled
text that results from this intervention might change the meaning
and intent of a sentence dramatically. For example, because
"homosexual" is in the list of CYBERsitter's forbidden words, the
sentence, "The Catholic church is opposed to all homosexual
marriages" appears to the user as, "The Catholic church is opposed
to all marriages." (Kongshem, 1998)

Likewise, Karen Schneider, a librarian for the Environmental Protection Agency, has led a filtering software assessment project involving more than thirty librarians around the world. She has found that filters "are not reliable and they're hard to maintain" (cited in Gebeloff, 1999). In one example, recipes using "chicken breast" were blocked due to sensitive word triggers. Rob Gebeloff, author of Screening Zone: The Trouble with Net Filters and Ratings, continues to problematize the use of all types of "censorware" programs by pointing out numerous gray areas in judging content. He asks:

Do you want your kids going to Web sites that discuss birth
control? What about AIDS education? Or what about the
exploration of Mars? [A recent New York Times article pointed out
that one filtering program blocked out every Web site with the
word "sex" in it, including a site that had the word
"marsexploration" in it's title]. So clearly, if you're going to go
with filtering, be prepared to make tough calls. (Gebeloff, 1999)
Peacefire--a group critical of filtering software--explains, "We have always felt that filtering software is not only ineffective, but also a violation of the trust between students and staff... Unfortunately, most of the censorware companies block anything controversial, not just pornography. I find it very discouraging that this includes information like suicide prevention, safe sex, and gay youth resources" (g. Jenkins, quoted in Kongshem, 1998).

Third, students and computer hackers have already found flaws with such programs and have managed to acquire information from sites that have been blocked. When product evaluators at Consumer Reports tested over nine different Web content filters, including AOL's parental controls, they discovered that, although AOL offered the best protection, as much as 20 percent of easily located Web sites containing sexually explicit content, violently graphic images, or promotion of drugs, tobacco, crime, or bigotry slipped through the filters. In fact, "Net Nanny displayed parts of more than a dozen sites, often with forbidden words expunged but graphic images intact" (ConsumerReports.Org, 2001).

Fourth, there is an inherent conflict of interest when the main advocates challenging the government's attempts to protect children from online predation and pornography are the very same groups that seek to profit directly from a "free marketplace" of online smut. In its June 2004 press release, SafeSurf applauded the Supreme Court for its ruling in the Internet pornography case Ashcroft v. ACLU "because the High Court concluded that Internet filtering solutions, such as those originally proposed by SafeSurf over nine years ago, are a better way to proceed than the government restrictions imposed under the Child Online Protection Act" (Jules, 2004). As the chairman of SafeSurf, Ray Soular, exclaimed, "This decision has revealed that the High Court has seen the wisdom in protecting the Internet from governmental censorship and in enabling parental discretion through an intelligent filtering and labeling system. Maybe now, Congress will focus more attention on what has become known as the 'Safe Surfing' method of protecting children online" (Jules, 2004, emphasis added). Yet the court's wisdom is more the result of intense lobbying than constitutional insight. SafeSurf has been lobbying Congress about the constitutionality of the Child Online Protection Act since its implementation, arguing its case before the Congressional Commission on Child Online Protection (COPA) in July 2000,just a few months after COPA's passage.

Gebeloff addresses this conflict of interest in his critique of net filters and ratings for Money Talks:

I once had a chance to interview Gordon Ross, the fellow who
designed Net Nanny.... I asked Ross how he, with his background
in computer systems, comes up with the list of bad words and
unacceptable Web sites that his program blocks. Basically, he told
me, it started from a list he put together and then evolved over
time to reflect feedback from users. "And we have a disclaimer
saying we're not liable for the list." (Gebeloff, 1999)
This leads Gebeloff to deduce the ironic disposition of this practice: "We don't want the government to be our censor, so why should we turn the job over to a computer programmer from British Columbia? The answer, of course, is that we shouldn't, but that's what happens when a parent buys filtering software, installs it, and then walks away from their child's machine" (Gebeloff, 1999).

With laws mandating the use of various forms of censorware to meet government regulations like CIPA, and liability issues at school, the library, or work, it is no surprise that the marketplace of ideas has increasingly channeled its financial resources into for-profit filtering products. Companies easily win over school and library administrators by guaranteeing adherence to government legislation as well as liability protection and parental approval. For $14.95, SafeSurf markets Safe Eyes as an effective tool that "uses the N2H2 website database which has been proven time after time to be the most accurate database available ... In recent tests, both the U.S. Department of Justice and the Kaiser Family Foundation found N2H2 to be the best" (SafeSurf, 2004b). Official endorsements from prominent governmental, industrial, and educational groups are an added selling point, such as N2H2's official stamp of approval from the American Library Association for meeting CIPA rules.

As for the pervasiveness of filtering products, a poll conducted as early as 1998 at the Technology + Learning conference revealed that 51 percent of surveyed teachers, technology directors, school board members, and other educators had adopted some form of censorware for all or some students in their district (cited in Kongshem, 1998). Another poll conducted in 2000 by MSNBC.com found that "many users rely on an Internet service provider, or ISP, to do the filtering for them. The big names in this market are America Online, The Microsoft Network, Mayberry USA, Rating-G Online and Getnetwise.com. Filters that are popular with Christians and conservatives include Family.Net, Integrity Online and Hedgebuilders.com" (Nodell, 2000). With no centralized board or groups to review the practices of these filtering companies or ISPs for their effectiveness or appropriateness, it is easy to see how those seeking to meet the needs of their schools, libraries, work, or homes turn to various programs without clear indication of their validity and reliability, especially institutions pressured to have some "safety plan" to meet CIPA legislation or issues of liability.

Accordingly, it is no surprise that filtering producers and marketers stand to gain financially by lobbying for nongovernmental solutions to censorship, as well as a deregulatory media environment allowing telecommunications firms to continue to merge and expand their online assets and streamline Web content. MSNBC's interest in polling Internet user preferences for filtering is not purely for newsworthiness given its partnership with Microsoft. The same is true for AOL Time Warner. What is more, in addition to cornering the market for libraries, schools, and homes, many of these companies have ventured into the work environment. As MSNBC.com reporter Bobbi Nodell explains, "many filter companies are moving into the corporate market, which is booming because employers are concerned about workers 'wasting time' on the job and want to keep them from shopping, checking investments and playing games ... the corporate market is expected to grow from $60 million in 1999 to $500 million in 2004" (Nodell, 2000).

Confirmation of this trend can be found with Net Nanny. Looksmart, a leading business firm in online search technology, recently acquired Net Nanny for approximately $5 million in cash and stock in April 2004. Indeed, in their ability to promote and streamline commercial content (while limiting "inappropriate" sites), monitor Internet user habits, profile users for direct marketing purposes, and market products to users, filtering software products can be considered stepchildren of the highly lucrative commercial search engines, which became the most lucrative Web properties in 2003 due to their increasing ability to promote commercial Internet content. As LookSmart CEO Damian Smith stated in 2004:

This acquisition is both strategic and prudent for LookSmart ...
Strategic, because integrating our search technology into Net
Nanny provides a stronger product for their users, while also
providing LookSmart with a desktop platform froth which to launch
high margin search and paid listings applications. Prudent, because
Net Nanny is expected to produce positive margin contributions for
LookSmart in 2004. (LookSmart, 2004)
In other words, this partnership, along with MSN funding, will allow LookSmart to apply its tracking and marketing capabilities to Net Nanny's software and related proprietary environments. As the company explains to its shareholders, such a partnership "will enhance the leading online filtering software and provide high-quality proprietary search traffic for LookSmart."

While filtering technology continues to thrive in the Internet's "free market" system, and as Web content continues to grow exponentially, the profits for filtering technology continue to expand commercially. Net Nanny's acquisition by LookSmart makes clear that one of the leading "protectors" of illicit online content is poised to become a predator of tracking and marketing to today's Internet users as it shifts its mission to "high margin search and paid listings applications" (LookSmart, 2004). With substantial profit predictions for filtering companies expanding their business within the corporate market, the goals to protect Internet users, including children, are becoming further marginalized at a time when schools, libraries, and businesses are becoming increasingly dependent upon filtering technology.

To make matters worse, "the Internet's status as an open forum for ideas" has come under attack since 2002 with a Federal Communications Commission (FCC) ruling that shields cable companies from having to open their networks to smaller competitors and civil liberties and consumer advocacy groups (Wolverton, 2002). As Karen Charman (2002) explains, "without public policies mandating open access," cable will monopolize broadband width, denying access to other Internet Service Providers in order to capitalize off of hyper-commercialized services that make it easier to buy products. Troy Wolverton (2002) of ZDNet news explains that "lack of competition among cable Internet providers could be a form of censorship ... even if they don't completely block Web sites, cable companies could slow access to them to the point that they become all but impossible to reach ... while they could speed access to their own sites and those of preferred partners." Subsequently, if "the Internet content accessed by K-12 youth is patrolled by capitalist institutions, rather than by the government, educational institutions, public libraries or communitarian groups, it will inevitably become more difficult 'to turn the one-way system of commercial media into a two-way process of discussion, reflection, and action'" (Thoman, 1998, p. 3). As Resnick explains, no matter how well conceived or executed, any labeling or blocking system will tend to stifle noncommercial communication since the time and energy needed to label will inevitably lead to many unlabeled sites: "Because of safety concerns, some people will block access to materials that are unlabeled or whose labels are untrusted. For such people, the Internet will function more like broadcasting, providing access only to sites with sufficient mass-market appeal to merit the cost of labeling" (Resnick, 1997, p. 106). This form of censorship is a serious problem as the possibilities for a decentralized and openly available information network will once again be delimited by a top-down capitalist hierarchy where nondominant, noncommercial, or alternative sources of information will remain peripheral.

Finally, information filtering does not prepare students to learn how to analyze and evaluate information once they are no longer using the Internet within an educational setting. This point has gained momentum as media literacy educators, librarians, and scholars have been grappling with the need for solid media literacy curricula that include a critical and analytical approach to learning with and about online communications technology (Fabos, 2004; Frechette, 2002; Paxson, 2004; Tyner, 1998).

TESTING CONTENT CONTROLS FOR CYBER-CAPITALISM

The hegemonic impulse of online safety profiteers becomes clear when we take a look at some ratings organizations, online proprietary environments, ISPs, and databases recommended by parents, the government, educational institutions, and the industry. First is SafeSurf, a rating organization that claims to be "dedicated to making the Internet safe for your children without censorship." Through an information database of objectionable sites, a proprietary environment for children, and safety tools for parents, SafeSurf believes they "will enable software and hardware to be developed that will enable more effective use of the Internet for everyone" (SafeSurf, 2004a, emphasis added).

My skepticism about claims that "everyone" benefits through SafeSurf's methods developed when visiting the SafeSurf home page, where I reviewed their policies, claims, and method to create an environment that is child tested and parent approved. What first drew my attention to their Web site were the various advertisements centered on the page. One ad displayed a large colorful rectangle for Card Service Online, "the leader in online real time credit card processing," featuring Mastercard, Visa, Discover, and American Express. Directly under it was an ad for Child Magazine, on sale at the reduced price of $7.95; its pitch: "One year for the price of a bottle." Beneath this was a bold advertisement link to "Update Microsoft's Internet Explorer to support SafeSurf Ratings." Combined, these ads validated my forewarning about the interconnections between powerful computer firms, such as Microsoft, and blocking software products.

My findings led me to presume that more advertising would emerge on the SafeSurf Wave link, which offers Kid's Wave, a list of "top sites" purportedly "devoted to educating and entertaining children." On the Kid's Wave front page, I was informed "There are great places to take your children online." Below was a grid of partial listings of SafeSurf-approved sites by category. The first category was the "favorite site of the month," which was Squigly 's Playhouse. By clicking on the cartoon graphic, my hypothesis was reaffirmed: the unfolding visual displayed a large color advertisement for Disneyland with moving graphics and a photo of the Magic Kingdom. The flashing text read "[frame 1: photo and text depicted Disneyland Resort] To really enjoy yourself here; [frame 2: photo of Mickey Mouse described as 'the Disneyland Trip Wizard'] Pick up your custom schedule here."

In case the ad was overlooked, each separate clickable Kid's Wave link for an activity or game was infused with the Disney Resort campaign. For instance, the "Squigly's Games" page had another large, flashing, color ad for Disney at the top that read, "[frame 1: photo of Mickey Mouse] Are you the Ultimate Disney fan?; [frame 2: photo of Goofey] Click here--enter to win"; on the bottom, a three-frame flashing ad targeted at parents read, "[frame 1 ] You know what you put on your card; [frame 2] but do you know what he put on your card? [picture of a crowd with a man circled in red] ; [frame 3] Find out with your free credit report online." Other pages, like "Squigly's Writing Corner" or "Brainteasers," featured separate Disney ads as well as credit card ads (presumably targeted at parents, but also at a new generation of consumers).

Disney, it seems, is a frequent advertiser on filtering software products. In addition to selling nonsoftware products, such as $40 embroidered golf shirts, Net Nanny's Internet Web site had an advertisement for Disneyland featured on its front page. Most troubling, however, is that advertising clients are also the sponsors of Net Nanny content. Among its "safe-sites" for kids were "fun" links to Disney, Crayola, and Kids Channel. Under the category "Education" was a Colgate "Kidsworld" link with prominent product advertisements for Colgate toothpaste. Describing its mission in philanthropic terms, Colgate Palmolive Co. purportedly maintains the Internet site "as a service to the Internet community." A closer look at the page proves otherwise. First, I had to type in my first name and specified password of the day, "toothpaste," in order to enter the "No Cavities Clubhouse." There, I was greeted by "Dr. Rabbit" who appeared in his clubhouse holding a toothbrush and Colgate toothpaste. Although this Web site offered "interesting oral care facts, games, and stories aimed at raising children's awareness of oral health," I could not get away from Dr. Rabbit and his Colgate endorsement no matter what activity I clicked on. Moreover, in spite of its "intention" to adhere to the Children's Advertising Review Unit (CARU) Guidelines for advertising on the Internet and online services, my name and email were still requested so that the "Tooth Fairy" could send me an email message--no doubt carrying her Colgate toothpaste and brush in cyber-flight.

Although not nearly as plastered in advertising as SurfWatch or Net Nanny, CyberPatrol's Web site unquestionably catered to/partnered with commercial Web sites, including Disney's Internet empire of kid-targeted Web addresses. A recommended "safe" site was "Toy Story Games," a game developed by Disney based on its Toy Story movie. Not surprisingly, Disney's home page was saturated with child and adult-directed advertising. Although the advertising contained here was "2nd level," meaning that I had to click on the recommended sites before being inundated with ads, the sites contained on the page remained uncontested as child appropriate.

As evidenced within these kid-designated Web sites, the far-reaching clutches of advertisers are rendered invisible in the discourse or underlying rationale of Internet protectionism. While children are deemed to be impressionable when it comes to sex, pornography, adult content, and nefarious language, concerns about manipulative advertising campaigns go largely undetected within "kid-safe" Internet domains.

CONCLUSION

Media literacy scholar Len Masterman's explanation of critical autonomy, to "develop in pupils enough self-confidence and critical maturity to be able to apply critical judgments to media texts which they will encounter in their future" (1985, p. 24; emphasis added), does not fit within the logic of commercial filters and the self-regulated corporations attempting to control and streamline Internet content. As Elizabeth Thoman (1998) clarifies, "the media have become so ingrained in our cultural milieu that we should no longer view the task of media education as providing 'protection' against unwanted messages." Hence, a learning model of awareness, analysis, reflection, action, and experience leads to better comprehension, critical thinking, and informed judgments.

Contrary to filtering mechanisms designed to censor or reduce student exposure to "inappropriate" Web sites and online information, a much better approach toward new information technologies is to go beyond teaching students about how to use computers, email, Web browsers, etc. First and foremost, the goals of media literacy must go hand in hand with computer training and online access through the instruction of critical skills by which students learn to discriminate all types of information. While there are hazards to over-regulation and under-regulation of the Internet, educators and librarians have an important role to play in developing online media literacy initiatives so that students can become discerners of the types of information they need. The goals for taking media literacy to the Internet must go beyond the critical evaluation and use of information to include an analysis and understanding of the impact of political and economic forces that drive and control much of the Internet. Within a "media literacy in cyberspace" model, the issues of ownership, profit, control, and related effects are essential to helping students formulate constructive action ideas that will lead to their own Internet choices and surfing habits (Frechette, 2002). As PICS chairman Paul Resnick (1997) admits, "no labeling system is a full substitute for a thorough and thoughtful evaluation." In the end, if the power of Internet content labeling, ratings, and restrictions are left to a third party or profit-making companies, then educators, librarians, and parents need to lobby that they serve the public interest rather than private commercial interests.
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The SEM blog is retiring
Dear readers: The Search Engine Marketing blog is retiring. I admit to feeling sentimental about it, because this blog was originally created for me by Jason Calacanis, in the early days of Weblogs, Inc, and although I ended up contributing to several blogs in our lineup, this is where it started for me. I'm grateful to Jason, and thankful for the people I met in the SEM and SEO universes, via this blog.

Chris Gilmer, who has been posting here lately, is still with us! You can find Chris writing on Download Squad, our software and online services blog.

Although our editorial priorities have changed over the nearly three years of operation, we do not remove retired blogs. the SEM blog will remain available as an archive (and not a badly optimized one!). Thanks to everyone for reading.

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In-store & Internet Marketing
In-store & Internet Marketing
Drug Store News

ATLANTA -- In many respects, the Internet has raised more questions than it has answered. This certainly is true in the retail channel, where many companies, both large and small, are struggling to develop winning Internet strategies by answering some basic operating questions.

Does the Internet represent an incremental growth opportunity? Will it change the way consumers get information and shop? Can it be a profitable business?

Those are just a few of the questions facing retailers today. To help find some answers, Drug Store News and the National Association of Chain Drug Stores co-sponsored the In-Store and Internet Marketing conference here last month. As part of the conference, a distinguished group of retailers addressed these issues and others during a panel discussion moderated by Drug Store News editor-in-chief and associate publisher Marie Griffin. Griffin led the panel of five retailers in a discussion of Internet retailing, electronic marketing and possible avenues of vendor participation in e-commerce.

The panelists included Larry Zigerelli, executive vice president of marketing for CVS; John Gleeson, vice president of corporate strategy for Walgreens; Tim Ziemke, senior vice president of marketing and merchandising at Drug Emporium; John Roehm, director of electronic marketing for the drug division of Albertson's; and Mike Concannon, director of manufacturer relations for drugstore.com.

Following is an edited report from that panel discussion.

Marie Griffin: How do you view the Internet?

Larry Zigerelli: Intuitively, we see e-retailing as a logical, natural channel extension of our overall convenience and value strategy.

Looking at our proposition of what CVS had to offer, it seemed clear from beginning that an integrated bricks and clicks model would be the best strategy. Our IT department has been integrating the CVS and cvs.com infrastructures so there will be one common business base, one centralized conduit to customers whether they shop in a CVS store or the CVS Web site.

Today, when a CVS customer buys a prescription and other items online, two-thirds of those shoppers elect to pick up their purchase in their neighbor CYS store rather than have it shipped to them.

Online shopping seems to be perceived as the same as phoning in a prescription refill to a store.

Online customers have a tendency to do more stock-up shopping. As a result, the online shopper buys in large quantities and generates a higher average ticket: the average front-end ring at CVS.com is $40 compared with $10 in the stores.

The model that has emerged is one we believed would happen from the beginning. It is a seamless shopping experience to the customer.

John Roehm: We had the same feelings as Larry. We wanted a platform that supported the whole organization. We have different name plates for our stores, so there were opportunities for our drug and food stores to take the expertise of both parts of our organization and to come together to provide more consumer value.

Mike Concannon: We are an Internet-centric business that has gone into partnership with Rite Aid. We use net technologies to build personal relationships with our customers so we can empower them to improve their health and well being. It was important for us to look for ways to work with partners like Rite Aid and with manufacturers to create added value for our customers.

Rite Aid has developed strong customer relationships over a long period of time. We think that's a competitive advantage for us.

We use our brick-and-mortar partner to create great service for our pharmacy-centric customers. It's worked out fantastically marrying those two things up.

We're the sole distributor of General Nutrition Center products on the Internet. Wellness is a very fragmented business. GNC with 5,000 stores is the biggest brand in wellness. Drugstore.com today has a GNC store within our online store. It's the same relationship we have with Rite Aid.

Tim Ziemke: Drug Emporium through its partnership with Vitamins.com and HealthCentral.com has the same kind of triangle base. For us to offer 10,000 to 12,000 SKUs of vitamins, nutraceuticals and related health products in our stores would be an inventory nightmare, but to have it sitting in a distribution center in Louisville, we're able to handle a global business. It's a pretty good deal.

Vitamins and pharmacy rank as No. 1 and No. 2 in what we are offering to our customers.

John Gleeson: Through our pharmacy, we have terrific relationships with customers. Over the past seven years, we built a large pharmacy database with over 45 million families, and leveraging that database has really extended over into our Internet business. Our big thing is not so much to have an Internet pharmacy per se, but to ensure that our customers are able to access our stores however they want, through a phone, a store, a fax. We want our customers to have all kinds of convenient access.

Griffin: Jupiter Communications projects that online consumer health commerce spending will climb from $200 million in 1999 to $9.8 billion by 2004. That estimate includes sales of prescription pharmaceuticals, over-the-counter drugs, nutraceuticals [vitamins and nutritional supplements], personal care products [health and beauty aids] and medical supplies. How realistic are such expectations? How big a role will e-retailing play in pharmacy?

Gleeson: I can't estimate how far e-pharmacy sales will develop as far as the general public goes, but it will grow.

But our hope is that it will become an excellent way to share information with our customers. I'm not sure I can call that a business you can quantify in dollars, but it is a way to create intimate sharing of information with customers about their health care.

It's very difficult in the retail environment to provide customers with that kind of relationship. The Internet will extend beyond what pharmacists can deliver today in terms of information.

Ziemke: Content will have a lot to do with growth. If the customers are not getting as much good content today as they should, then that becomes one more service we can offer them.

Concannon: Did anyone make the right prediction about personal computers, supercenters, drive-through pharmacies? You learn and progress from there. One projection is that health and beauty sales on the Internet are going to $18 billion by 2004 with 80 percent of that being from pharmacy sales. Does that come true? Does it come true in that time frame? I don't know. For consumers learning to shop online, it is almost like learning to use personal computers. It's still not easy enough for them. It's still too hard to shop. But what will happen when there is more marketing muscle behind the Internet? Today, it's still hard to predict.

Roehm: As content evolves and as it can be linked to patient medical conditions or disease states, people will be more receptive toward that.

We're beginning now to get the infrastructure in place. We're dealing with privacy concerns.

But if consumers understand the types of medications they are on, they could make better front-end purchasing decisions, particularly with respect to OTC and vitamin products and the way they can interact with prescription products.

Zigerelli: When we were contemplating launching an online presence by buying soma.com (which became CVS.com), the first question we asked was: Do we think this business will grow to be big enough to fundamentally change the business model?

If the answer is no, then whether it becomes 5 percent or 12 percent, doesn't matter.

We concluded the answer was no, and that's because the viability of Internet retailing has to be determined on a category by category basis.

If you're in the computer business, which entails heavy analysis of what to buy, you can really get that information over the Internet and then make a buying decision. That's a value proposition to consumers.

With us, the value proposition category is not acute prescriptions, it is mail order. Now the mail order business is about 12 percent of pharmacy sales, and the biggest share of that business on the Internet is Merck Medco and that's because Merck converted their mail order business to the Net. That is working because the Internet is a better value proposition for mail order consumers.

Vitamins are also high on the list of what sells on the Net. This is also a business with a strong mail order component. If you take a lot of vitamins, it's hard to keep up with trends. Shoppers have to go to more than one place to find what they need. If they find a good mail order business, they buy from it. So today, companies like Vitamin Shoppe are converting their mail order business to the Internet.

Look at the rest of our businesses, think about how much time it takes to get on a computer, go down a list, and order. For the time it takes, you could have already gone to CVS or Walgreens, gotten what you want, and you're home or at work.

How big a business will it get to be? For us, not big enough to stop building 400 brick-and-mortar stores a year.

Griffin: Today, the consumer is in the driver's seat more than ever and that's because, thanks to the Internet, they have more information than ever before. In relation to our channel, to what extent is there a revolution in customers; to what extent have they changed their shopping habits?

Ziemke: You can hear the distant hoof-beats, but can't see the horses yet. There have been all kinds of changes going on in the way people do business, club stores that didn't exist until recently, specialty stores, category killers, so I think this is another evolution.

We don't know how big it will be, but it will develop first primarily in areas where there is information and selection issues. As computer use gets better, and as people start to find the value in it, it will expand.

Concannon: If you look at our business, we had 1.2 million new customers coming into our third quarter.

Of course, you could say that since Wal Mart gets 100 million customers a week, what's so great about 1.2 million. But in a very short period of time and in a learning organization, we are showing good growth. And in our last quarter, 59 percent of our orders were from repeat customers.

So those are some underlying dynamics and fundamentals that are really solid. But we never believed that stores were going to be empty. For us to be a pretty big business in a relatively short period of time, there is a lot of growth and dynamics that will take place.

But you also will be doing more value added services on the Internet. You can counsel patients, provide personalized information, help them search and be very precise with purchases. But then the question is if CVS.com does a very good job on the Internet, what happens when that customer goes into a CVS store?

Does the store now have to deliver differently to match what the Internet offers? Does it mean better counseling by pharmacists in the stores? There are a lot if different ways to see what the influences will be, not just shopping online. The ripples will be from more than just transaction purchases on the Internet.

Multi-channel shopping

Griffin: Everyone is talking about customers who shop in stores and customers who shop online. What about the evolution of multi-channel marketing? Does it currently happen?

Roehm: Our challenge is to understand where it is today and service our customers in all our formats, whether physical or not. We have to provide services and figure out where our customers are going, then build the formats that will service consumer needs in ways that make sense for them and us. There will be higher expectations for our stores because of the Internet, and it's up to us to meet those challenges.

Zigerelli: In existing markets, the customer who is most likely to come back regularly to CVS.com is our key customer using us in a multi-channel way.

In markets with loyalty cards, the number of customers using their cards on the Internet is growing.

If you think about it, the average consumer today shops more multi-outets than ever before. Five or 10 years ago, a woman who shopped at Saks would never admit that she also shopped Marshalls. But today, it doesn't matter because you're a consummate shopper who might find something on the Internet as well as in the stores. This whole concept of shopping anywhere any time is true.

How hard is it to integrate?

Griffin: What does it take to create an integrated model where the consumer can seamlessly move from the store and back?

Gleeson: We made a $150 million investment in our pharmacy system and today that system lets people access us on the Internet, through the mail, through the phone, through the fax and through the stores.

Ultimately, we will also have to have the same type of integrated infrastructure for the front end.

Until we get to the point where we can provide loyalty aspects however, it will be difficult to tie them into stores through the front end.

We think the Internet is best for categories that are complicated or information intensive like cosmetics, computers, medicated shampoos. There are probably 80 products on our site that relate to that.

But they all relate to something that has to do with product ingredients, and when you get into that, you start to realize that consumers are looking more at solutions and less at brands. When a consumer can go in with a condition like dermatitis and look at brands across product ingredients, you've got a whole new approach at brand marketing.

Is one-to-one marketing working?

Griffin: How do you balance respect for the customer and their privacy without leaving on the table the opportunities to serve them better one to one?

Zigerelli: We are finding that when you ask people to opt in for health care, the results are much more positive when we say we are CVS. We have your prescription records, and we are keeping them to ourselves. We are managing the one-to-one relationship. We are not giving them to a third party. That's a big plus.

Gleeson: Our policy is not to share private information. We don't share this information with anyone. I don't know how many millions of dollars we've left on the table, all of us have.

It's part of the deal in pharmacy that privacy is way up on the top of the list. The issues being dealt with by people in more general merchandise categories on the Internet have been dealt with by us for many years.

It boils down to this: We share the information only with people within our company who have something to do with the actual services they are providing and nothing beyond that.

Concannon: Particularly as a new pharmacy building new trust and new reputations, we have to be that much more careful.

We separate the person's account from their credit card until they're at the end of their transaction. Even if they were intercepted, one wouldn't be any good without the other, and it wouldn't reveal anything.

And with the e-mail reminders, it looks a little unfriendly because it says: 'Dear so and so, prescription l23xyz is ready to be refilled.' There's no mention of what that drug is or what it's usage is for.

We saw from day one that the privacy issues on the prescription side and the privacy issues on the front of the store have a significantly disproportionate rank within the store. Anything you don't want to be asking your next door neighbor about does extremely well on the site. That's our currency. That's the one thing that can't be squandered.

Ziemke: We use target e-mail as a reminder so if it's a customer we haven't seen in a while, they'll get a reminder, a special offer, to come back.

Somebody who orders frequently, but with smaller orders, will get a targeted e-mail that will suggest that we will give a $20 discount on orders over $80 or more.

It's more of a targeted e-mail based on slicing and dicing of demographics and not so much product orientated.

Roehm: We tend to use the people who opt in for reminders and currently, about 97 percent have opted in for e-mail reminders for front of store products.

As time goes by, consumers will be more likely to log on and ask to consult with an online pharmacist in a secure environment rather than opt in to be sent e-mail.

The information relevant to pharmacy we keep close to our vest.

Zigerelli: In markets where we have in-store loyalty programs, we ask consumers when they sign up if they are interested in finding out more about certain information categories like stress or heart disease, and we found that service is tremendously popular.

If a consumer believes they are opting into something valuable to them that they chose, they are much more likely to see that as care-taking rather than going after them to sell more products.

Griffin: How are you changing the way you market and acquire customers?

Concannon: Because of the dictates of the market and because we're getting a little smarter, we've gone from a dozen affiliate or portal deals down to three or four.

One of our biggest deals is with our on-going partnership with Amazon.com. Amazon is a part owner in drugstore.com, and we bought the health and beauty tab at Amazon. And now we're part of the pervasive navigation at Amazon in each page of the store, and that has been a significant source of customers for us.

In today's tight capital marketplace, marketing is a matter of where we put focused resources to draw the most customers.

Rite Aid is currently marketing the drugstore.com brand in a half dozen ways, including weekly circulars, on register receipts, at the front end, in TV advertising and in pharmacies.

Gleeson: Because Walgreens stores have substantial traffic count, one of our major new marketing endeavors is to get e-mail addresses into our systems, and we are actively promoting that in our stores. That does create a good channel for customers to visit the Web site.

But the main thing is to use the site as a logical extension of the stores and people naturally gravitate there if they are Internet users for their prescription services and other things. So we have not really gone through a major promotional campaign outside of that.

It would be very expensive to do a major television campaign just for walgreens.com.

Zigerelli: In the past, CVS has done some special television commercials to build awareness for its Internet store.

Now instead of television, we market CVS.com by tagging the Web site in all of our circulars, and we sometimes do a special page in the circulars with offers unique for CVS.com, which drives a lot of traffic.

On the Internet, we have just a couple of select partnerships to drive traffic. WebMD drives traffic that converts into sales and they get a piece of revenues back for that, so we're not spending millions of dollars up front to create traffic. We give them a piece of the sale after it happens so that the traffic that is being driven is financially affordable, and we also give WebMD advertising in our stores.

I think that, like Walgreens, what's important to us is that we have 20 million people every week coming into our stores with e-mail addresses, and that's our best source of advertising.

Evaluating marketing strategies

Griffin: Which marketing vehicles have really worked and which haven't?

Ziemke: What hasn't worked for us are the AOLs of the world. It turns out that those types of things don't even come close to good affiliate programs and utilizing in-store opportunities. We've done selected e-mail, but we've never gone the TV route. Too expensive.

But banner advertising didn't seem to produce at all. They were extremely cost ineffective.

Concannon: We will work with the manufacturers to give the customer what they want and at the same time, the manufacturers can address strategic brand objectives. They can tell their brand story. They can provide consumers with the information they were seeking.

What we did is approach the manufacturers and say, listen, you know your brands, your categories and your consumers better than we ever will, and what we know is how to create a really great shopping experience and use the personal experience of the Internet to draw customers, so to merge these two is pretty potent, and we've been pleased at how successful it's been so far--a win for everyone.

Brands on the 'Net

Griffin: How are the branded manufacturers fitting in with what retailers are doing online?

Gleeson: We would all like to see a way for our customers and our store associates to have Internet access methods to get product information.

It's a terrific new avenue and it's a terrific opportunity to enhance not only the shopping experience, but the information content in the stores.

Beyond that, there are suppliers that have more direct involvement in this. There is digital photography. We will see deep involvement with suppliers on digital photography.

Roehm: We are in the process of developing brand strategies with manufacturers. We're looking forward to reaching the point where we can offer manufacturers an opportunity to market within our environment both within the stores and on the Internet.

Eventually, we want to slice and dice information, particularly on things like product ingredients, so consumers can make buying decisions not just on price and value, but on how product ingredients in different products might interact. We will see shopping evolve to include quadrants of different types of products to fit consumer needs in different areas of our environment.

Zigerelli: Marketing with manufacturers is an excellent way to further strengthen partnerships.

We're currently doing a brand marketing program with Kodak. We were the first, I think, with Kodak to combine what we are doing in the stores with what we are doing on the Internet.

So you can come into CVS stores and if you want to get two-day processing, you can get single prints. We give you a code, and if you come back two days later, we have already loaded the pictures onto CVS.com so you have pictures to send to family and friends, even if you don't have a digital camera.

We're doing similar things with the pharmaceutical companies. We have an allergy channel for Claritin on CVS.com. We put Claritin on the prescription bags in stores. We have an endcap for Claritin, so we're looking for ways to create an enhanced shopping experience for the consumer in an integrated way.

We tie in with the Web sites of our partners when we want to hype an event. If, for example, Coke is going to do a special celebrity event, then we will tie into that event on CVS.com by inviting consumers to enter the contest online much in the same way as we do in our circulars for the stores.

Griffin: Could a supplier become an Internet competitor?

Zigerelli: Most manufacturers that we do business with have concluded that trying to become a retailer is not exactly the expertise that manufacturers have.

But just as we have a right to sell store brands that compete with our manufacturer's brands, manufacturers have a right to sell on the Internet if they choose.

But the partnerships that I have with suppliers are very deep in terms of sharing information. With that deep a partnership, as a manufacturer, I would think twice about the death of the partnership because it becomes more complicated. I don't know of any supplier that we do business with today that I feel threatened with in terms of competing on the Internet. What consumer would want to go to Gillette.com to buy two razors or to Coke to buy a can of Coke? That's not the way the consumer shops. I just don't see it as an issue at this time.

Ziemke: I agree with Larry, They're not in the retail business. To try to get into a fulfillment process to take care of a limited number of people, it just runs contrary to their mission statements. I don't know of any manufacturer who is aggressively pursuing it.

Gleeson: It is difficult enough to sell convenience-oriented merchandise on the Internet, even as a retailer.

It is even more difficult to do that as a manufacturer without a full assortment, unless you're in a very specialized business with specialized products in which case, we are probably not carrying it anyway.

Opportunities ahead

Griffin: What is the biggest near-term opportunity on the horizon?

Ziemke: Providing a larger offering to a larger customer base, particularly with products that you cannot afford to put into your mix on a store-by-store basis.

You can take a category like vitamins and nutritionals, and you can have a huge offering. When you let people know it's there, it becomes a service issue. It lets you say to customers: Look what else we have for you.

Concannon: We're very fond of saying that our biggest competitor is not stores or other dot-coms. It's ingrained customer buying habits. They're use to driving to stores and picking the stuff up, so the opportunity to change customer behavior rests on us making it as easy, convenient and intuitive as possible.

We have the mechanisms to drive traffic to our site, so if we have what they want, and you're covering the four P's of retailing and making it easy to shop the store, I'm confident that we can win the customer. That's what it comes down to. It cuts into things like having the right items. That's how we're going to win the day by making it very easy and intuitive.

Roehm: You have to continue to evolve and redefine the site both on the drug and food side. There will be integrations with the distribution centers that are not commonplace today. We need further integration throughout our stores and service areas. We need expansion of product selection and more of an integration between food and drug operations.

Zigerelli: The key challenge is to continue to enhance the shopper experience and to grow, while at the same time making the economics work better and better.

We have integrated a lot. We still have room for integration. Photo is totally integrated. The same category manager handles the whole business for stores and the Internet.

We are getting tremendous success with incremental sales without incremental people. We expect to make money in the next year or so. To be able to accomplish that while keeping up with consumer demands on the Internet is our key challenge.

Gleeseon: Because of the pharmacy, drug store operators have a bond with our customer that doesn't exist in other types of convenience outlets, and a lot of that is because of the information that we store on their prescription history.


There's a very strong feeling on the part of consumers that those stores have my information. What we will experience on the Internet is the ability to extend that type of advantage with that customer relationship in other areas, as well.

I think as we go forward, the people who are able to leverage that customer technology to lock that bond in are going to be the real winners, and the Internet is the ideal medium to build these relationships. It is the No. 1 opportunity for the future.
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Omniture's Chris Zaharias Interviewed by Eric Enge
Published: March 2, 2009

Chris Zaharias runs Sales for SearchCenter SEM solution, and is a seasoned sales executive whose working knowledge of search marketing dates back to the late 90's. Chris has more than a dozen years of ecommerce, online marketing and enterprise technology experience, including domestic and international management positions at Netscape, RealNames - an early pioneer in the paid keyword space - and Efficient Frontier. Chris is an avid SEM writer and blogger and loves nothing more than knowing what's new in search.

Interview Transcript

Eric Enge: What are the areas where search and traditional marketing are intersecting?

Chris Zaharias: Advertisers have realized that there are a lot of interactions between search and other forms of marketing. If we were to talk about this four years ago, I would have said the interactions between search in the other forms of marketing and an advertiser's own business were immaterial, because the greatest opportunity for growth in search had nothing to do with that.

It had everything to do with building out keywords sets, making sure that you have the right ad copy, sending the traffic to the right page and doing all of the SEM 101-type of things that most advertisers did. What's changed now is that advertisers, at least in the US, are already buying most of or all of the keywords that they should be. They've done a lot of things, like structuring their campaigns correctly and participating on all three or four of the major search engines, as opposed to just one or two.

Those types of organic growth opportunities have dried up. But at the same time, the overall growth in search as measured by metrics like the number of searches per searcher have also come to a virtual standstill. There has been a lot more focus on how to properly manage search campaigns and what to do to set yourself apart from the competition. The competition has figured out all of those SEM 101 types of tactics because of all the writing, the conferences and the increased focus on this particular.

So this is where it really gets interesting to try and understand search marketing as part of an overall marketing mix and to use that knowledge to get more out of search specifically.

Eric Enge: To summarize, growth was sort of brainless for a while, but that is not good enough anymore.

Chris Zaharias: Yes. I used to always say that all people needed to be successful in search in the first few years was a pulse. It really wasn't that hard because it was such a green-field opportunity.

Eric Enge: Right, but in the current environment, where a lot of that is more mature, it's not sufficient. Your company might get some gains out of that, but it is not differentiated.

Chris Zaharias: Right. There is also the dynamic of the search engines themselves. Because of the slowdown in growth and the continued imperatives on their part to grow their businesses, they have now started to operate their engines with an eye towards yield maximization. There are a lot of things that search engines have introduced that increase their monetization but require more complexity in campaign management.

They have also introduced more requirements for precise and holistic management of the campaigns. This is done in order to create yield management on the part of the advertiser to combat the monetization moves that the search engines are making.

Eric Enge: So you can still get a competitive edge by better managing these second generation opportunities (problems) than the next guy.

Chris Zaharias: One of the key opportunities for growth and improvement of campaigns is conversion optimization. When you look at any given sector in paid search, you will find there are up to order of magnitude differences in the conversion rates that advertisers are getting. SEM tactics being equal, the advertisers that can convert the traffic at the highest rate are going to win.

Whereas the focus for conversion rate improvements used to be just iterating your ad copy or trying to see which page converted best, there are now requirements to get much more scientific about that conversion optimization process. One area that jumps out is known as Multivariate Testing.

Multivariate Testing is testing all of the potential variations of a landing page or a session. This can include the ad copy, landing page, and all of the different pages in the conversion funnel. And on each of the pages of the site there are multiple elements that can be tested, such as the offer itself, page layout, placement and size of graphics, font size, color schemes, and much more.

Breaking down all those variables into a set of tests often yields conclusive results as to what combinations of elements best convert the traffic.

That's the reason Omniture acquired Offermatica in late 2007. Omniture realized that the opportunity to make big strides in conversion optimization was there, but that it would require technology that marketers could manage to take control of and continually iterate through the testing process. So, one big area is conversion optimization.

That industry has been getting more refined in understanding how to manage paid search campaigns. Historically, people started out optimizing paid search to clicks to pay for their traffic. The next wave was from 2003 to 2007-2008, and it concentrated on conversion for people who are optimizing to a cost-per-order or CPA metric.

Now a new area of opportunity for greater efficiency is getting more fine-tuned in the metrics. When you look at a typical keyword campaign, you will find that high-volume keywords tend to have enough data to optimize your conversion metric.

But for the midsection and the tail of your keyword portfolio, you tend to not have enough data to optimize to conversions and you essentially have to use your best human intuition to make decisions. That keeps you from having the efficiencies you want in your campaigns.

We are seeing a lot of people use micro-conversion events, also known as leading indicator metrics.. What that might mean in a retail setting is rather than just optimizing to the conversion event, you might try to understand the ratios of events such as shopping cart fill or viewing a product detail page. You can assign values to the leading indicator metrics. You can optimize using a lot more data than if you were to just look at conversion data.

Eric Enge: That can include things like newsletter signups or contact box requests.

Chris Zaharias: There are literally hundreds of metrics, but the point is defining and assigning values to those metrics. Then you have to optimize to those metrics, which is something that very few people are doing, but something that everyone should do. It just increases the efficiencies of your search marketing campaigns that much.

As result, integrating your web analytics with your SEM Campaigns becomes very critical. If you can't be aware of those metrics or analyze data to understand the ratios of those micro-conversion events then you can't optimize.

The third area is this notion of trying to understand SEM within the context of your overall set of marketing initiatives and your overall business. There are consistent patterns of interaction between TV advertising and search that you can track, analyze and optimize. One example could be overlaying search traffic and conversion data against TV advertising data. It's clear when you look at this data that the TV activity drives search activity in a meaningful way.

What that means from a campaign management standpoint is that you need to integrate those other forms of marketing into how you manage paid search. If you know you are going to be running a set of TV campaigns, for example, you may want to adjust your bid management rules in advance of the expected rise in traffic during that time.

You could say the same thing for whatever medium you are advertising in, they are all going to have an impact on search. For that matter search is going to have an impact on other forms of marketing.

Another thing to remember is that you can't be truly efficient in the management of your search campaigns unless you take into account the direct and indirect online value that you accrue from those activities. But you also have to take into account things that might happen offline. This has been a big challenge, particularly for the SEM community, because it is comprised primarily of SEM-specific tools, vendors or agencies.

When an advertiser sees that there is a competitor that has a big offline presence that appears to dominate the paid search space for their sector, they will always ask how can they afford to consistently spend 40% more than me when I am doing everything right and taking into account all my online value that I am getting from paid search?

The answer is that the advertiser is able to understand the value that they are getting from their search campaigns in their physical stores or something along those lines.

Eric Enge: The classic scenario is that someone does a search for "women's clothing, and then, they want to go see it, they want to touch it. They decided what they wanted to buy based on search, but then they went in the store to complete the transaction.

Chris Zaharias: Yes, the online-only retailer is always going to be at a disadvantage, because they can't consummate the subset of transactions that are going to happen offline. Or, if you are looking at two advertisers that are both in search and have online and offline presences, the one that can instrument their campaign management to actually understand the exact relationship between a particular keyword and a particular offline transaction is going to be much more efficient than one that is limited to knowing that 20 percent of its business happens offline and therefore assumes that each search driven online transaction has a value of 1.2. That would be a very approximate way to do it.

What advertisers need to do is integrate their point of sale systems and their physical stores with their analytics and search marketing systems so offline data can be piped into their analytics and SEM environment. If they do this they can actually take into account the direct relationships between a query and the ultimate offline transaction.

Eric Enge: That sounds like a fairly complex process. Say someone comes to the website and they fish around for a little bit without leaving a name or anything like that behind, how do you create the correlation to when the transaction takes place in the store?

Chris Zaharias: It requires a very specific method of tracking. Let's use a call center as an example. If we are talking about a phone order, what you might do is have a particular 800 number or coupon code that you show to the person that came through Google campaign X.

This way, when they call in you can correlate that back to a particular keyword or campaign just by virtue of the number they call. If you are trying to entice people with some sort of promotion, you might want to tie back that promotion to that promotion code or a particular keyword, or particular campaign, or particular engine.

All you are doing is correlating with the particular click-through that happened from paid search to make sure that you take the value into account. The main reason I came to Omniture is because I felt like the system to do this in a much more exact fashion was going to become critical. The acquisition of Visual Sciences gives us a system that integrates with the point of sale system or the call center system. Then it sends the data from that system to our SiteCatalyst infrastructure, which is the data hub for analytics.

Because Omniture SearchCenter is integrated with SiteCatalyst, we can have SearchCenter act on any source of data, including that call center offline data as it figures out how to bid on keywords.

Eric Enge: Right. Calling a custom 800 number is actually much simpler than capturing the coupon code at the point of the sale because it is fully automated. The other thing to realize is that even though you have improved your situation greatly, you are still only capturing a percentage of the transactions. You are not capturing a hundred percent of the transactions, you are just capturing a chunk of them.

Chris Zaharias: That is true. But every increment of efficiency is good to have.

Eric Enge: Absolutely, the more information the better. Even though we know that analytics is an inexact science and everybody talks about how relative measurement is king, you are still better off every time you remove a source of error.

Chris Zaharias: Right. So, in addition to taking offline call centers and what data you have into account, to understand its impact on the search marketing campaigns and react to it, there is also the continual goal of targeting to or taking advantage of all the targeting capabilities that exist in search.

What you might do is try to use that offline data to understand the impact of search in a particular geography. We have certain clients correlating conversion data back to the geo-targeting they are doing in Google to perform geo-analyses of offline conversion data. Because the response from search tends to drive offline conversions of different amounts in different geographies, that's going to affect how a company actually implements and iterates through geo-targeting in the search engines.

Eric Enge: You might spend more on your Boston campaigns then your San Jose campaign, for example?

Chris Zaharias: Correct. That's one of the main areas where Omniture is going with search and integrating with both SiteCatalyst and the other pieces of Omniture's platform.

Eric Enge: People used to believe that the CPA was everything. Don't get me wrong, it's a great and reasonable way of measuring things, but why not use real revenue goals instead? Once that occurs, the next logical thing is to use gross profit. On each step along the way, you are eliminating a source of error.

Chris Zaharias: Exactly. I just had this conversation with someone in the credit scoring space a couple of weeks ago. They are spending $25 million plus a year on search, but the one thing that they haven't been able to do in their campaigns is optimize something other than CPA. They obviously want to optimize to profit, which requires that they take Lifetime Value (LTV) into account.

Ideally we would take the LTV data, get it into SiteCatalyst, and then use bid rules that take into account the variable profit of each transaction that they are going get from search. Say you sign someone up and they are paying a monthly fee for credit monitoring services. Compare someone who stays with them for just a one month trial then cancels, with someone who stays with them for three months, with someone who stays with them for 12 months and buys an additional product.

They are very different values, and unless you take those different values into account, you are never going to be as efficient as you could be in your search campaigns.

Eric Enge: The people who convert as a result of one group of keywords may be more likely to be long term customers than those that convert on another group of keywords.

Chris Zaharias: Right. Before the whole macroeconomic shift, the sole focus of paid search campaigns tended to be top line growth. But now we are hearing a lot more people who don't care if it makes them money or saves them money, as long as they increase profits. These types of discussions about increasing efficiency, regardless of where they come from, are a lot more prevalent.

You talk about how the search engines are trying to monetize their inventory. The need for analyzing site traffic data to find and implement negative keyword strategies is a lot more acute. And you could argue that an advertiser who is doing everything right should have as many negative keywords as positive keywords. Typically, however, an advertiser will have maybe one negative keyword for every five or ten positive keywords.

If you can help people who are making use of broad match, find all of the areas where the search engines are not properly matching the ad to the query, you can help them build out those negative keywords. This way you can drive a lot of efficiencies that the search engines are unlikely to show you.

Eric Enge: There are a lot of flavors of those kinds of things. It could be as simple as deciding between broad match versus phrase match.

Chris Zaharias: The key to finding the right match type strategy is to think of a broad match type as a baseball farm team. You have a lot of players in there, some of them are going to pan out and some of them aren't. But you need that farm league system to continually grow your campaigns. It's going to feed both the positive keywords as well as help you find all of the negative keywords that you want to avoid at all cost while using broad match.

Have you heard of this automatic match beta that's been going on at Google? It is very emblematic of the direction that the search engines are going in. Some people are discussing whether or not bid management is dead. The real discussion that should be going on is whether or not the keyword is dead. In an ideal world, search engines would go to an advertiser and say, you are in this vertical, let us figure out all the keywords and all the traffic that's appropriate for that vertical.

That would be great for the search engines because it would allow them to cut out the middleman and get a lot more revenue than the conversion data would merit. The reality is that's the opposite of what advertisers should do. Advertisers should take advantage of the ability to target at the individual keyword level to find the right buying intent to go after and capture. So search engines and advertisers are increasingly at odds with each other from a strategic perspective. This is where the online business optimization platform that Omniture is bringing to bear becomes much more compelling.

Eric Enge: Right. So, for an example let us say that you are an online shoe site and you focus on selling men's shoes. Let's say you don't sell slippers, so you really don't want to be matched up with them and you never use the word ‘slippers' in your campaigns. But, with automatic matching, you might end up showing up for that.

Chris Zaharias: Right. Think of Automatic Matching as a beta system whereby Google looks across accounts for unspent budget and then broadens the ad-to-query matching as necessary to spend the remainder of the budget.

Eric Enge: Let's talk a little bit more about TV driving search. Let's say you run a Super Bowl ad. You should see a pretty good spike in your search traffic as a result, particularly if you are smart and prominently featuring your webpage address in the ad. But in addition there will be people who search on your brand name. So, what's the best-practice for trying to measure that kind of impact?

Chris Zaharias: Well, I think that being a very unique advertising scenario, where there is an immense amount of money you are spending in an incredible short period of time, it's definitely a bit different than just the standard ongoing TV campaigns. If you are going spend that much money for a 30- or 60-second spot, you need to be confident that you are going to be able to convert that traffic at the absolute highest rate possible.

In that specific case you would be criminally negligent if you didn't do some multivariate testing in advance of that TV spot to make sure that it converts at a very optimal rate. The very first thing to think about would be testing to make sure that you have the right flow, the right offer and the right formation of pages that optimize that expensive traffic you are going to be paying for.

Another thing from an SEM management standpoint is to know exactly when your ads going to run. You are going to want to make sure you implement a set of management rules for your SEM campaigns that take into account what's likely to happen that day in advance of the Super Bowl.

You might have to up your budget for this period, or you may have to impose a different set of bid rules for a period of time after it airs to take into account what is likely to be a much higher conversion rate than you typically get.

I am also going to revert back to my long standing keyword management principles as the effect of the Super Bowl advertising trails off. And that requires some specific thought and advancement in infrastructure. Let's say you go into SearchCenter and you look on the calendar, and you impose a specific set of bid rules for this specific period of time. That could either be a period of days or a specific set of hours within the day that correspond with when your ad is going run.

Depending on the type of TV advertising that you do, you are going to have to think about different keyword sets, both positive and negative. If ever there is a time when you need to be aware of all possible misspellings of your brand name, this is it. People that are four beers into watching the Super Bowl they might recollect your brand name correctly when they see an ad or they might have variations; making sure you capture all of that is going to be critical.

Likewise, making sure that you have all the negatives set up to avoid getting traffic that you don't want becomes even more important if you are spending about 2 million bucks for a 30- or 60-second spot. You might have specific reporting that you need to see during and after the Super Bowl ad is run.

Obviously, if you are an SEM manager at a company and all of a sudden you are going to be spending 2 million bucks on a Super Bowl ad, you can bet that the reporting requirements of your senior management around your SEM campaigns are going to be very different during that time than it has been to date. You need to be able to provide near instantaneous detailed executive reporting so that they can understand the value of that investment.

Eric Enge: Right. So, you can do differential measurements, correct? You can compare the results on the website for the 7 days following the event verses the results for 7 days previous to the event, for example.

Chris Zaharias: Right.

Eric Enge: So even though we may not have a precise number on the income that it brought in, we do know that income was 60% higher during that 7-day period, than the prior 7 days.

Chris Zaharias: Right. Every metric that you can imagine from transaction volume, to average transaction size, to geographic measurements to conversion rate is going to be looked at.

You need to be managing your SEM campaigns in a manner that takes the interplay into account, not just with offline marketing channels, but with other online channels as well. There is a value in someone who might sign up for a newsletter on your site as a result of seeing the ad or who might play a game that you develop on your site specific to that Super Bowl ad, and whose goal is engagement and brand awareness with the target demographic.

Being able to have your SEM systems integrated with your email campaign management systems becomes very important if you are going to achieve the engagement and conversion goals that you have.

Eric Enge: What if we have an ongoing TV campaign rather than a spike event?

Chris Zaharias: In that case you really need to make sure that you are understanding, capturing, and reacting to the value that you are getting from the offline campaigns. You will want to have your SEM management set up to be able to bid in the way you want to during the times those ads are running. Obviously, you will typically get spikes in traffic and changes in conversion rates relative to other times when you run those ads.

If you just let your system react to it, the system is inevitably going to react poorly because it has no reason to know that anything is about the change. It will react slowly and then efficiently to changes in traffic conversion rates.

What you should do is tell the system that you want to bid up or relax your CPA requirement in anticipation of a higher conversion rate or higher average order sizes during this period. Doing that analysis and implementing the rules to coordinate your TV campaigns with your search management is going to yield better results than just letting it ride.

Eric Enge: Right. It could be something as simple as being willing to take a lower margin because you expect a good spike.

Chris Zaharias: Yes and SEM systems act on historical data. It's great to use historical data, but only if it's a good representation of likely future performance, which isn't necessarily going to be the case in TV advertising.

Eric Enge: Right, absolutely. So this sort of gets back to Omniture CEO Josh James's presentation at SES Chicago; the notion of the search marketer being the quarterback. Do you have any comment on why it is that the search marketer should be the one driving this process rather than someone else in marketing? Search Marketer as the Quarterback



This screen shot from Josh James' presentation as SES Chicago reprinted with permission)

Chris Zaharias: Search has the largest, most measurable aggregation of buying intent that has ever existed. Because the opportunities for optimization are so much greater, the controls are at the fingertips of the advertiser. This is all important because you don't get concentrations, of buying intent, expression of buying intent, and variations of buying intent in any other channel in the way that you do with search. So that aggregation of intent, the ability to analyze the data, the ability to optimize along multiple parameters, , that's likely to be the path that the rest of marketing will take.

If everyone today is worried about Google becoming a monopoly, those worries are overblown because Google actually already is a monopoly for all intents and purposes within the world of search. It has an 80-95% market share in Europe. If you count their distribution partners, they're almost at 80% in the States, and they keep taking more market share.

What's really important to know is that the real time action marketplace that's measurable and actionable within search is likely to grow into all other forms of marketing. We are a couple key technological advances away from advertisers being able to understand individual reactions to things like radio advertising, or print advertising, or billboard advertising. At which point, those offline marketing channels become measurable and actionable marketplaces where advertisers can react at the data they are seeing.

It's much more likely that the search engines with the most efficient advertising platforms will grow into those other areas. And you are already seeing that with Google's acquisition of DoubleClick, with some of the interesting tests they are doing around deployment and measurement of radio advertising.

When you see things like quick response codes in Japan, which led to tens of millions of consumers reacting to print advertising by scanning a barcode with their cell phone, it becomes very real to think about the systems in the action environment that is search. The role of the search marketer as a quarterback is not just important because it's this biggest aggregation of buying intent right now, but also because the measurement, the real time optimization and the auction environment within search is likely to be the environment that's subsumes the rest of advertising, not just online advertising.

Eric Enge: So even though the rest of advertising dwarfs search from an economic standpoint, the accountability and measurability of search will eventually become the predominant way of doing everything?

Chris Zaharias: Right, exactly.

When you think about the opportunities for advertisers to take advantage of the inventory that Google, Yahoo and Microsoft are aggregating, it's pretty astounding. It is obviously incredibly complex, and it becomes all the more complex for every additional channel that you have to look at.

Eric Enge: Thank you Chris!

Chris Zaharias: Yes, thanks Eric!

Have comments or want to discuss? You can comment on the Chris Zaharias interview here.

Other Recent Interviews

• Google's Cedric Dupont, February 4, 2009
• Market Motive's Scott Milrad, January 26, 2009
• AJPR's Motoko Hunt, January 12, 2009
• Angus Norton, January 5, 2009
• Alex Chudnovsky, December 29, 2008
• Eric Ward, December 22, 2008
• Yahoo's Larry Cornett, December 15, 2008
• Google's Brett Crosby, December 1, 2008
• SEOmoz's Rand Fishkin, November 24, 2008
• Hitwise's Bill Tancer, November 17, 2008
• Dennis Mortensen - October 27, 2008
• Guy Kawasaki - October 14, 2008
• Bruce Clay - September 22, 2008

About the Author

Eric Enge is the President of Stone Temple Consulting. Eric is also a founder in Moving Traffic Incorporated, the publisher of Custom Search Guide, a directory of Google Custom Search Engines, and City Town Info, a site that provides information on 20,000 US Cities and Towns.

Stone Temple Consulting (STC) offers search engine optimization and search engine marketing services, and its web site can be found at: http://www.stonetemple.com.

For more information on Web Marketing Services, contact us at:

Stone Temple Consulting
(508) 485-7751 (phone)
(603) 676-0378 (fax)
info@stonetemple.com
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"In an energy-constrained world, we cannot continue to grow the footprint of the internet … we need to rein in the energy consumption," said Subodh Bapat, vice-president at Sun Microsystems, one of the world's largest manufacturers of web servers.

Bapat said the network of web servers and data centres that store online information is becoming more expensive, while profits come under pressure as a result of the recession.

"We need more data centres, we need more servers. Each server burns more watts than the previous generation and each watt costs more," he said. "If you compound all of these trends, you have the perfect storm."

With more than 1.5 billion people online around the world, scientists estimate that the energy footprint of the net is growing by more than 10% each year. This leaves many internet companies caught in a bind: energy costs are escalating because of their increasing popularity, while at the same time their advertising revenues come under pressure from the recession.

One site under particular scrutiny is YouTube — now the world's third-biggest website, but one that requires a heavy subsidy from Google, its owner. Although the site's financial details are kept under wraps, a recent analysis by Credit Suisse suggested that it could lose as much as $470m (£317m) this year, as it succumbs to the high price of delivering power-intensive videos over the internet.

And while the demand for electricity is a primary concern, a secondary result of the explosion of internet use is that the computer industry's carbon debt is increasing drastically. From having a relatively small impact just a few years ago, it is now leapfrogging other sectors like the airline industry that are more widely known for their negative environmental impact.

However, tracking the growth of the internet's energy use is difficult, since internal company estimates of power consumption are rarely made public.

"A lot of this internet stuff is fairly secretive," Rich Brown, an energy analyst at the Lawrence Berkeley National Lab in California, told the Guardian.

"Google is probably the best example: they see it as a trade secret: how many data centres they have, how big they are, how many servers they have."

One study by Brown, commissioned by the US environmental protection agency, suggested that US data centres used 61bn kilowatt hours of energy in 2006. That is enough to supply the whole of the UK for two months, and 1.5% of the entire electricity usage of the US.

Brown said that despite efforts to achieve greater efficiency, internet use is growing at such a rate that it is outstripping technical improvements – meaning that American data centres could account for as much as 80bn kWh this year.

"Efficiency is being more than overwhelmed by continued growth and demand for new services," he said. "It's a common story … technical improvements are often taken back by increased demand."

Among the problems that could result from the internet's voracious hunger for electricity are website failures and communications disruption costing millions in lost business every hour – as well as power cuts and brownouts at plants which supply data centres with electricity.

To combat this, initiatives are taking place across the industry to cope with the problem, including new designs for data centres, innovative cooling methods and more investment in renewable energy.

Researchers at Microsoft's £50m research lab in Cambridge are even turning to older technology in an attempt to turn the clock back – by replacing energy-hungry new machines with the systems used in older, less powerful laptops.

"It turns out that those processors have been designed to be very energy efficient, basically to make batteries last," said Andrew Herbert, the director of Microsoft Research Cambridge.

"We found we can build more energy-efficient data centres with those than with the kind of high performance processors you find in a typical server."

Google was among the first internet companies to take action to reduce its footprint by developing its own data centres — but even though it pumped an estimated $2.3bn into infrastructure projects last year, it remains unclear whether it is winning the battle.

The company's vice-president of operations, Urs Hölzle, told the Guardian that it was struggling to contain energy costs. "You have exponential growth in demand from users, and many of these services are free so you don't have exponential growth of revenue to go with it," he said.

"With good engineering we're trying to make those two even out … but the power bill is going up."

Despite mounting evidence that the internet's energy footprint is in danger of running out of control, however, Hölzle dismissed concerns about the environmental impact of using the web as "overblown".

"One mile of driving completely dwarfs the cost of a search," he said. "Internet usage is part of our consumption, just like TV is, or driving. There is consumption there, but in the grand scheme of things I think it is not the problem."

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Microsoft Live Blog Starts SEM Instruction

The people over at the Microsoft Live Search blog have started a series of SEM posts intended to help train people.

The SEM 101 posts are intended "to help folks who suddenly find themselves responsible for promoting their organization's website. I've seen many visitors in the forums who ask basic questions, so I know there is an audience for this line of articles. I personally know many folks in my life outside work (there is such a thing, right?) who manage websites for their businesses but know little-to-nothing of SEM."

I will be keeping an eye on how these posts develop and what level of information is shared. It is always interesting to watch the keeper of the algorithm help people improve there position in the results without tipping their hands to the factors influencing the algorithm.

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IMlavoro: SEM / SEO Specialist Junior
Assistente al Resp. Campagne Adv sui Motori di Ricerca Promobit sta cercando un SEM - SEO Specialist Junior che supporterà il Responsabile SEM nella gestione delle campagne pubblicitarie sui motori di ricerca e nella realizzazione di progetti SEO interni o...
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Is Anonymity Good For The Internets?
Couple weeks ago when I interviewed Seth Godin on the radio show he said that he wished nobody could be anonymous on the internet. It stirred up a few people in the comments who took exception to that statement. I honestly can see both sides. On one hand i can see times when using a sock puppet is [...]

This Post Is From ShoeMoney's Internet Marketing Blog

Is Anonymity Good For The Internets?

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SEM News
SEM News weblog. No ordinary news blog, as there are often posted tips, tricks, and sometimes even rants about marketing in general.
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Search Engine Strategies (SES) Brings SEM, PPC and SEO Training Workshops to Atlanta

Full and Half-Day SES Workshops Provide Training for Search Engine Marketing, Pay-per-Click Advertising and Search Engine Optimization Professionals at All Levels (PRWeb Apr 22, 2009)

Read the full story at http://www.prweb.com/releases/2009/04/prweb2348304.htm

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SES Brings SEM, PPC and SEO Training Workshops to Atlanta

On May 5, 2009, Search Engine Strategies (SES) will hold four search engine marketing (SEM) training workshops at the Omni Hotel CNN Center in Atlanta, GA. The hands-on workshops cover a range of topics, including search engine optimization (SEO) and pay per click (PPC) advertising.

Have you ever wondered why the search engine marketing industry uses the three-letter acronym (TLA) so frequently? Were we trying to squeeze too much information into the 25-character limit for a Google AdWords headline or secretly preparing for Twitter's more generous 140-character limit?

Anyway, attendees can choose one workshop or participate in one workshop in the morning and another in the afternoon. The fee for two workshops is $1,345, and the fee for one workshop is $745. For complete workshop details and registration information, visit SEM Training Atlanta.

There are two morning workshops, which are being held from 8 a.m. to 12 p.m.

Using the conditions outlined by the popular search engines, Search Engine Optimization (SEO) Workshop demonstrates how to build a user-friendly, search-friendly and persuasive website that converts visitors into buyers. The instructor is Shari Thurow, founder and SEO director of Omni Marketing Interactive. Thurow is a pioneer in the area of search-engine friendly website design and has a 100% success rate for achieving top search engine rankings for her clients.

Link Building Tactics, Tools & Techniques demonstrates how to better understand and manage link building campaigns by providing information about proven, practical and creative link marketing campaigns. The instructor is Debra Mastaler, president of Alliance-Link. Mastaler is a speaker at industry events and a guest columnist for industry publications, who offers a common sense approach to link building by combining traditional sales and promotional strategies with effective online search engine marketing tactics.

Everyone can always use link building tips and Mastaler recently spoke to WebProNews Reporter Abby Prince at Small Business Marketing Unleashed in Texas. Mastaler explained that one should begin their link building campaign by establishing their credibility. She also discussed tools that she recommends using.

Small Business Marketing Unleashed: Debra Mastaler

There are two afternoon workshops, which are being held from 1 p.m. to 5 p.m.

Advanced Keyword Research explores the tools available for identifying, researching and zeroing in on the right keywords for an SEO or PPC campaign via theory and real world examples. The instructor is Ron Jones, an Internet marketing consultant, trainer and owner of Symetri Internet Marketing. Jones provides strategic consulting and Internet marketing solutions to a variety of companies.

Jones was interviewed recently by John Mulligan of SEO-PR about the case study Jones presented at SES San Jose and how to improve your quality score.

Symetri case study on improving quality score

Finally, How to Effectively Use Social Media for Search Marketing Campaigns reviews the entire realm of social media environments and how to use them effectively as part of a holistic marketing campaign. The instructor is Liana "Li" Evans, the director of Internet marketing at Key Relevance. Evans is well-versed in all avenues of search marketing, with a particular focus on natural search optimization, vertical search, social media and word-of-mouth marketing.

I interviewed Evans about her social media panel at SES Toronto 2008. In her session, she talked about winning social media strategies from companies such as Dell, Houlihan's, and Loblaw's. Loblaw's, for example, actively participated in social media conversations not only by creating a YouTube channel to promote its product, but by taking to heart user feedback gathered from that channel and changing their product to reflect the needs expressed by their consumers.

Li Evans on Social Media Success and BBQ Sauce

For complete SES training workshop details and registration information, visit http://www.searchenginestrategies.com/training/atlanta/

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My Top 10 SEO Techniques for Small Business Website SEO/SEM Success
I've been getting a lot more requests from small businesses for Search Engine Optimization (SEO) and Search Engine Marketing (SEM), and I seem to be repeating most of the same advice to every new client. Put simply, it is more difficult for small businesses to compete on a global level for competitive terms with high profile companies, especially on a small business budget. But that doesn't mean with hard work and determination that you can't be competitive and build and market your brand successfully. So presented here are the top 10 suggestions I make to just about every new SEO or SEM small business client that comes to me looking for online marketing assistance:
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Search Engine Strategies (SES) Brings SEM, PPC and SEO Training Workshops to Atlanta

Full and Half-Day SES Workshops Provide Training for Search Engine Marketing, Pay-per-Click Advertising and Search Engine Optimization Professionals at All Levels (PRWeb Apr 22, 2009)

Read the full story at http://www.prweb.com/releases/2009/04/prweb2348304.htm

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SEM y el flujo de personas
Una percepción errónea muy común acerca del mercadeo en línea es pensar que consiste únicamente de la optimización de la página per se. En realidad, SEM (Search Engine Marketing) implica como meta conseguir tráfico relevante a un sitio a través de los variados canales en línea existentes. El siguiente gráfico tomado de Elliance (firma especializada [...]
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SEM y el flujo de personas
Una percepción errónea muy común acerca del mercadeo en línea es pensar que consiste únicamente de la optimización de la página per se. En realidad, SEM (Search Engine Marketing) implica como meta conseguir tráfico relevante a un sitio a través de los variados canales en línea existentes. El siguiente gráfico tomado de Elliance (firma especializada [...]
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Sam’s Club now offers SEO, SEM Services
Sam’s Club Online Services offers SEO,SEM services to its members on its website. Search Engine Optimization will run you $25 a month and include Profile creation tool with unlimited updates Profile Distribution to major search engines and online Yellow page directories Hand submission of your website url Pay for performance will start at $50 and include Campaign setup in google [...]

Post from: SouthwestSEO.com

Sam’s Club now offers SEO, SEM Services

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