First, what data?  This comes up in various contexts.  First example: an agency contracts with an ad campaign client for marketing, issue advocacy, corporate branding, what have you.  It used to be that creative was a “work for hire” (or assumed to be) owned by the advertising client.  With some sort of understanding that the client wouldn’t end-run the agency.

In other words, expectations were governed by historical industry practice.  Copyright and contract law didn’t play much a part.

But what about campaign performance?  What about reports and research and metrics and all the “data” compiled by the agency to make its case?  Forrester and Gartner Group and Corporate Executive Board and their ilk have been selling research reports for years on these sorts of things, but agencies typically didn’t bother with industry best practices-type studies or reports.  Work was done for clients, and work product was owned by the clients (or again, was assumed to be).

Fast forward many years beyond the traditional Madison Avenue construct to the age of advertising networks.  Now, as Advertising Age described [requires registration] earlier this year , “on each ad deal, there is push-pull among publisher, agency/advertiser and, in some cases, an ad network.  And until recently, ad networks helped themselves to data because no one bothered to stop them.”  And noone cared enough anyway.

The two developments that have changed things entirely are the explosion of data available, and the maturing of the internet.  They’re intertwined developments, of course.  Now, the advertiser or agency or network manages a campaign for a client or (more likely) numerous clients.  The fight today will not be about who owns the ad copy or the brilliant webisode.  The smart client will want to know – and be able to control – what works and why it works.  But so will the agency and so will the network.

And as James Othmer described in the Washington Post recently, “Ads in the [1960s] “Mad Men” day were about the art of persuasion.  Advertising today is about the art of engagement.”  Othmer neatly illustrates this point with its own compelling data: “[T]he average American living in a city 30 years ago saw up to 2,000 ad messages a day.  Today, estimates range from 5,000 to 20,000 ad impressions a day.”  Data has driven impression explosion and the demand for market engagement and hypertargeting has driven a demand for data.

Data includes traditional online metrics like numbers of impressions, numbers of clicks, purchase response, where domains are coming from, who they are.  But now it’s much more than this, too, and much more specific.  From the New York Times:

“When someone visits a site like Expedia or Autobytel.com, that site captures valuable information: Someone is a first-class traveler, for instance, or shopping for a hybrid car. Those sites have deals with data companies, like BlueKai and eXelate, to place a … cookie … on that visitor’s hard drive, indicating those preferences. An advertiser like Varick [Media Management, an advertising agency] bids on those cookies, instructing an exchange that it will pay a certain amount for an ad when a certain cookie is for sale.  Other companies, like Media6Degrees and 33Across, analyze the world of social media, using cookies and interaction data to find “lookalike” groups among friends on Facebook, Flickr or other social sites. Their theory is that friends share values and are likely to respond to similar marketing messages.  Finally, companies can add cookies for anyone who visits pages on their sites – if someone gets to the checkout page, then abandons his shopping cart, the company will probably pay lots of money to advertise to him again.”

Advertising agencies have been building up their own “data practices” to compete with the ad networks and with each other, and to take advantage of the reams of data collected through use of cookies and other ad serving technology enabled by the internet.   Again, from the NY Times’ profile of ad agency Varick Media Management, creating value where there may have been none perceived before:

“Varick and its handful of competitors cement their strategies around a system called exchanges, a mechanism that helps online publishers like NBC.com or Yahoo.com sell ad space.  While publishers have some ad space no company would bid on in advance – few advertisers would book a random Yahoo mail page, for instance – publishers still want to show an ad when someone loads that page.  So the publishers let an ad exchange like Right Media, from Yahoo, or DoubleClick Advertising Exchange, from Google, sell that space instantly, through an electronic auction, and get a cut of sales.  Such random, seemingly unwanted space could be virtually worthless.  But because ad agencies can now use multiple sources to gather very specific demographic data about visitors, such space gains value and can be brokered on an exchange.”

In other words, while it actually may be no easier than ever to “know what works” in advertising, there is now data available to at least try to justify an answer.  And in many cases, particularly with take-action campaigns, the data theoretically cuts out much of the guess-work.  (Privacy policies will still fret about limits on personally identifiable information (PII), but regulations on PII can potentially become toothless as simple extrapolation can use non-PII to the same end.)

Why would advertisers be willing to give up the data?  Two immediate reasons come to mind.  First, they may have no interest in it.  Advertisers are in the business of developing products and services, not specifically in the business of advertising or data collecting.  The second reason may be related to the first, in that they may have no idea that this data exists or (more realistically) any real ability to do anything with it if they got it.  They don’t have “data practices” or Wall Street quant analysts on staff to crunch numbers and micro-manage online campaigns.  That’s presumably what Google or Varick does for you, and you’re happy to let them do it.  Besides, how many small businesses are presented with inch-thick briefing reports by consultants only to shrug, “I just want you to sell my product.”  Anyway, who wants to deal with trafficking?

Why would publishers give up the data?  Take the question of ad inventory optimization.  You would think this proprietary, but it’s not exactly clear to whom.  It’s not an issue of confidentiality, but the publishers do want to be able to learn something from their experiences.  Performance data derived from the experience of optimizing inventory would (perhaps) be quite valuable as an end-product in itself.  How to serve ads to best match with context?  How to serve ads to best maximize click-throughs and impressions?  To best satisfy advertiser desires for demographics?  With action performance metrics like point-of-purchase campaigns or other “take action” campaigns?

Since the relationships of ad buyers are with the network and not with the publishers, the publishers don’t own these relationships nor all associated contact information, campaign information, and (perhaps) ad spend dollars.  Publishers may only get aggregate performance reports, rather than identity of specific advertisers, ad spend or specific campaign information.  Besides, in a down economy, many publishers are pleased with the additional traffic and accompanying revenue.  And like the advertisers, publishers may simply lack the resources to best traffic their pages and, especially, monetize their excess inventory.

Is this an arcane – and largely academic – legal issue, or a debate with serious business import?

A doctor’s office analogy may be apt (discussed in Davis Wright Tremaine’s Privacy and Security Law Blog): The doctor’s office owns the physical paper chart or the electronic database with a patient’s health information.  The data itself belongs to the patient.  But how do you practically distinguish between the chart and the data?  HIPAA and other privacy laws restrict the doctor’s ability to use the patient’s data, and “ownership” is more or less allocated by implication to the patient.

But those are privacy laws, not copyright, and few would argue that the doctor lacks rights to make use of the chart (albeit a restricted use).  In any event, the analogy breaks down at this point because at least here you have an interested party (the patient, i.e. the end user) who obviously has a direct personal stake in the debate and is sensitive to the issues involved.

Advertising Age has called the fight over user data and media consumption “tectonic”, but what exactly is the legal fight about other than establishing market clout?  Contract rights can give a WPP clear title to certain data, but a contract does not necessarily waive a party’s rights in data that that party inherently owns.  For example, while WPP’s contract states that “[a]ll data generated or collected by [Publisher] in performing under this Agreement shall be deemed ‘Confidential Information’ of Agency/Advertiser”, is that a valid release of a publisher’s interest in site registration data for users?  Or for that matter, is that particular subset of data even covered?  Another subset: much of the same types of user data that a publisher might be able to glean irregardless of the presence of the ad?

Applications of cookies and beacons and other tags to serving of digital ads do not necessarily clearly distinguish among data derived from the ad and data derived from server software or a publisher’s content management system.

Problem number two is that, just because a database compiles data, that doesn’t automatically make that data “owned” by the database.  Publicly available data that is “there for the taking” is not presumptively subject to a land-grab.  For contract rights to be enforceable, all interested parties must consent, and all interested parties must be freely able to do so.  Who is to say (and noone yet has said) that consumers are freely able to give up their rights to their own behavioral data?  And in any event, no site visitor is ever party to advertiser contracts.

The online advertising industry seems to be in a stand-still awaiting the IAB/4A’s weigh-in on the subject, still expected later this year.  In the meantime, behemoths like WPP are dealing with the issue through cramdown contract terms, and you might expect the industry to follow WPP’s lead for the time being.

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