Digital Marketers Welcomed the Witch Hunt

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witch_smallADOTAS – The Wall Street Journal is on the rampage: all cookies are evil, all web analytics software is evil, targeted advertising is a violation of people’s human rights, Google Analytics should be banned. The response from the online marketing community has been muted in the extreme, but you can summarize all responses as one of the following:

  • “It’s not really a big deal, don’t get so upset over nothing.”
  • “We’re implementing great self-regulation.”
  • “If you don’t want to be tracked, don’t go online.”

Hardly a convincing response to a heavy duty crusade by one of the world’s most influential publications.
The press and politicians are on a witch hunt, and this time the witches are the online marketing community and online advertising. How did we get into this mess? How will we get out of it?

Lest I be falsely accused of being objective, let me be up front about my position: if you work in online advertising or web analytics (as I do), this mess is your fault and you deserve everything you get. If online advertising dies, your business dies and you end up begging on the street, you deserve it.

The entire online marketing community has been blindly walking into this predictable mess for years. How? By simply refusing to acknowledge that the public are really, deeply, seriously worried about their online privacy, and by assuming any public concerns are merely the result of a lack of understanding.

In my view, and that of the public, web tracking is out of control and in danger of turning into a very nasty business which lives mainly in the gutter. If you want the full details, read the WSJ articles, but here’s a small example. The WSJ visited the 50 most popular kid’s websites. In doing so they acquired over 4,000 different tracking files – cookies and LSO’s. If you don’t think that’s over the top, you’re not in tune with ordinary people – because they think that’s level of surveillance is unacceptable.

There is an intuitive recognition by society at large that this information can be misused, even if people can’t yet imagine how. The main concern derives from an awareness that ad-delivery is a relatively trivial usage of behavioral tracking with relatively small databases with primitive systems.

People search engines have created systems which connects people’s real names to the pseudonyms they use on blogs, Twitter and other social networks. I’m sure Iran would love to mine that data and analyze the behavior of key figures in government and security services. We know banks already use this data to assess your credit worthiness based on the financial behavior of your online friends. This industry is only a few years old — what will things be like after another decade of development?

Data is not just going to be used to deliver advertising – that’s naïve. Sooner or later it will be used to limit access to goods and services. Some insurance companies now offer different policies based on your surfing patterns. The logic is that you can automatically offer visitors the insurance products they are most likely to want instead of making them search for it.

How long will it be before someone who wants a different policy gets charged extra because their purchase doesn’t fit their surfing profile and therefore represents a higher risk? If content is presented based on profile, other content is being denied based on profile.

Let’s demolish a few myths with which the online industry has defended itself:

1. Advertising is necessary to pay for the free content on websites. What free content? I pay for everything I see online when I pay my ISP to provide me with web access. The ISP is the one who should be paying the websites for the content. If there were no websites, the ISPs would not make the massive profits they do connecting people to the web. ISPs earn money from the content of websites.

The reason ISPs don’t get billed by websites is that we don’t have the systems in place to bill them. We could create such systems, and in the early days of the internet, this was how we figured it would evolve. However, it would require a huge international effort and challenging the might of the telecos. It’s easier to throw ads at consumers. That’s OK with me, but lets not pretend content on the web is free. Everyone pays for web content when they pay for web access.

2. The industry has introduced self-regulation. No it hasn’t. The industry has produced a paltry opt-out button, which few have implemented. The mere fact that anyone could consider this self-regulation reveals how little the online advertising industry understands what’s required.

Self-regulation is more than making opt-out from a few big companies a little easier. Opt-out doesn’t remove data from existing databases. It doesn’t remove data from others who have purchased it. It doesn’t enable me to check the data about me is accurate and take steps if it is not. It doesn’t provide any checks on who can gather data or what they can do with it.

There is no obligation to abide by even this basic self-regulation, and no penalty for failure to comply. What’s surprising to me is that an industry dedicated to influencing attitudes can be so incompetent about selling itself.

3. Targeted advertising is better than non-targeted advertising. The logic here is that people don’t want irrelevant ads. As one industry insider put it — “correctly targeted ads become desirable information services.” The popularity of ad blocking systems shows what ads people would prefer — none at all.

Let’s also ignore the fact most ads are far from “informational” – draping a girl in a bikini across a car hardly tells you much about it’s performance.

The success of Google AdWords shows that relevant informational advertising can be popular. However, the value of an ad, even when highly targeted, is not all that high in the general scheme of any individual’s life. The price being charged for that targeting — total uncontrolled tracking of everything I do online — is, in the public’s view, too high. Most people would be happy to have less effective ads if it meant they could keep their privacy.

The future for behavioral tracking online is predictable — legislation. It is likely some of that legislation will be very restrictive. For example, the complete banning of third-party cookies has been proposed, as has a maximum cookie life of 30 days.

The digital marketing industry, by failing to understand consumer concerns, will fail to provide an adequate response. Because the industry is unregulated, international, and hugely splintered, no single industry body is capable of imposing any regulation anyway. The only people with the muscle to impose enforceable standards are governments.

As digital marketing professionals, we must start to engage seriously with public concerns, and stop assuming the people “just don’t get it.” They get it better than most industry insiders. Defending the current model won’t cut it.

People want to see limits on what is tracked, who can track and what can be done with that data. They want the ability to remove records, to keep some activities secret, and to control access to information about themselves. If the digital marketing community doesn’t wake up very quickly two things are inevitable: someone will seriously abuse online tracking and people will get hurt, and then legislation will destroy the industry.

5 COMMENTS

  1. Excellent piece and right on. I’ll only quibble w/#1 for a second because paying ISPs is really about paying for access and was never intended as paying content. Online access has been more analogous to the telephone model than the cable TV model. That access ISP’s provide is not just for accessing Web sites, but also for accessing other services via the Internet. Email, which until recently was mostly done using a client app (ie. Apple Mail, MS Outlook, et. al.) require such access. Other apps like Twitter clients use the Internet to deliver the content to their client apps. Hence access to the Internet has been about carriage.

    Having said that, I would say that where the myth of “Advertising is necessary for the free content on Web sites” goes wrong is that there’s nothing free about content, it costs to make it and it costs to view it. It has always been paid for w/advertising, no differently than how advertising pays for TV content, newspaper & magazine content, and radio content. But note that in those mediums, advertising didn’t need to know everything about us to make it worthwhile and effective. Per your comments in #3, people would be happy to get non-targeted ads in exchange for not having their online footprints tracked.

    The industry has brought up the term “bargain”, as in targeted advertising is the bargain consumers have made for access to free content. Not in the least, as no one ever asked consumers (unless you count the question “would you prefer more relevant ads”, as the unencumbered question to determine this issue ;), and no negotiation ever took place. Also, from what I’ve seen of targeted ads online to date, there’s much to be desired, which only ads insult to injury to people having their privacy violated.

  2. Brandt,

    Interesting piece. I actually do agree with points 2 & 3, but not with one (and direwolff already made that point eloquently).

    Though two wrongs don’t make a right, financial services industry in general, and credit card industry in specific, have been accessing much personal data and associating it with credit card numbers for decades without anyone getting to upset about it.

    I believe the industry needs to find a set of mutually acceptable guidelines (or the government will find guidelines for the industry) that are respectful of all under 18 and personally identifiable information.

    Uriah

  3. I absolutely agree with #1. If there were no web content, only services such as file transfer, network access, and e-mail there would still be a dedicated group of geeks using the internet, and ISPs. But not the billion+ people online there are atm.

    Imagine if Wikipedia required you to be on a ‘paying ISP’ before you could view the site? Wikipedia wouldn’t be begging for $5 donations annually, for one thing.

  4. Part of the solution is consumer education, part legislation, requiring clear privacy policies for industry participants with aggressive enforcement for those that violate. Before reasonable legislation can be passed, the legislature needs to be educated to understand the underlying issues and exposures. Their understanding is key to avoid the inevitable unintended consequences or at least minimize their impact to the industry.

    One partial counter to the public being deeply concerned with privacy issues online is the whole Facebook phenomenon. Think of the amount of personal information that 100s of millions of people share on Facebook everyday, perhaps in part because they don’t understand the depth, breadth or lifespan of their personal information being shared and how it could be potentially used, now and in the future.

  5. To Uriah’s comment about Credit Cards, there is no doubt strict regulation as to what the credit card co.s can do with that data. They regulation is lacking online.

    One channel I would point out where there is a lot of PII available with little of no control are supermarket loyalty cards. I see Nectar (the UK’s second largest loyalty card) has teamed up with Yahoo. http://goo.gl/UfTBf This means that Yahoo know everything I buy at shops? At what point do we get concerned?

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