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The Empire Strikes On

Twelve years ago, I posted The Data Bubble. It began,

The tide turned today. Mark it: 31 July 2010.

That’s when The Wall Street Journal published The Web’s Gold Mine: Your Secrets, subtitled A Journal investigation finds that one of the fastest-growing businesses on the Internet is the business of spying on consumers. First in a series. It has ten links to other sections of today’s report. It’s pretty freaking amazing — and amazingly freaky when you dig down to the business assumptions behind it. Here is the rest of the list (sans one that goes to a link-proof Flash thing):

Here’s the gist:

The Journal conducted a comprehensive study that assesses and analyzes the broad array of cookies and other surveillance technology that companies are deploying on Internet users. It reveals that the tracking of consumers has grown both far more pervasive and far more intrusive than is realized by all but a handful of people in the vanguard of the industry.

It gets worse:

In between the Internet user and the advertiser, the Journal identified more than 100 middlemen—tracking companies, data brokers and advertising networks—competing to meet the growing demand for data on individual behavior and interests.The data on Ms. Hayes-Beaty’s film-watching habits, for instance, is being offered to advertisers on BlueKai Inc., one of the new data exchanges. “It is a sea change in the way the industry works,” says Omar Tawakol, CEO of BlueKai. “Advertisers want to buy access to people, not Web pages.” The Journal examined the 50 most popular U.S. websites, which account for about 40% of the Web pages viewed by Americans. (The Journal also tested its own site, WSJ.com.) It then analyzed the tracking files and programs these sites downloaded onto a test computer. As a group, the top 50 sites placed 3,180 tracking files in total on the Journal’s test computer. Nearly a third of these were innocuous, deployed to remember the password to a favorite site or tally most-popular articles. But over two-thirds—2,224—were installed by 131 companies, many of which are in the business of tracking Web users to create rich databases of consumer profiles that can be sold.

Here’s what’s delusional about all this: There is no demand for tracking by individual customers. All the demand comes from advertisers — or from companies selling to advertisers. For now.

Here is the difference between an advertiser and an ordinary company just trying to sell stuff to customers: nothing. If a better way to sell stuff comes along — especially if customers like it better than this crap the Journal is reporting on — advertising is in trouble.

In fact, I had been calling the tracking-based advertising business (now branded adtech or ad-tech) a bubble for some time. For example, in Why online advertising sucks, and is a bubble (31 October 2008) and After the advertising bubble bursts (23 March 2009). But I didn’t expect my own small voice to have much effect. But this was different. What They Know was written by a crack team of writers, researchers, and data visualizers. It was led by Julia Angwin and truly Pulitzer-grade stuff. It  was so well done, so deep, and so sharp, that I posted a follow-up report three months later, called The Data Bubble II. In that one, I wrote,

That same series is now nine stories long, not counting the introduction and a long list of related pieces. Here’s the current list:

  1. The Web’s Gold Mine: What They Know About You
  2. Microsoft Quashed Bid to Boost Web Privacy
  3. On the Web’s Cutting Edge: Anonymity in Name Only
  4. Stalking by Cell Phone
  5. Google Agonizes Over Privacy
  6. Kids Face Intensive Tracking on Web
  7. ‘Scrapers’ Dig Deep for Data on the Web
  8. Facebook in Privacy Breach
  9. A Web Pioneer Profiles Users By Name

Related pieces—

Two things I especially like about all this. First, Julia Angwin and her team are doing a terrific job of old-fashioned investigative journalism here. Kudos for that. Second, the whole series stands on the side of readers. The second person voice (you, your) is directed to individual persons—the same persons who do not sit at the tables of decision-makers in this crazy new hyper-personalized advertising business.

To measure the delta of change in that business, start with John Battelle‘s Conversational Marketing series (post 1, post 2, post 3) from early 2007, and then his post Identity and the Independent Web, from last week. In the former he writes about how the need for companies to converse directly with customers and prospects is both inevitable and transformative. He even kindly links to The Cluetrain Manifesto (behind the phrase “brands are conversations”).

It was obvious to me that this fine work would blow the adtech bubble to a fine mist. It was just a matter of when.

Over the years since, I’ve retained hope, if not faith. Examples: The Data Bubble Redux (9 April 2016), and Is the advertising bubble finally starting to pop? (9 May 2016, and in Medium).

Alas, the answer to that last one was no. By 2016, Julia and her team had long since disbanded, and the original links to the What They Know series began to fail. I don’t have exact dates for which failed when, but I do know that the trusty master link, wjs.com/wtk, began to 404 at some point. Fortunately, Julia has kept much of it alive at https://juliaangwin.com/category/portfolio/wall-street-journal/what-they-know/. Still, by the late Teens it was clear that even the best journalism wasn’t going to be enough—especially since the major publications had become adtech junkies. Worse, covering their own publications’ involvement in surveillance capitalism had become an untouchable topic for journalists. (One notable exception is Farhad Manjoo of The New York Times, whose coverage of the paper’s own tracking was followed by a cutback in the practice.)

While I believe that most new laws for tech mostly protect yesterday from last Thursday, I share with many a hope for regulatory relief. I was especially jazzed about Europe’s GDPR, as you can read in GDPR will pop the adtech bubble (12 May 2018) and Our time has come (16 May 2018 in ProjectVRM).

But I was wrong then too. Because adtech isn’t a bubble. It’s a death star in service of an evil empire that destroys privacy through every function it funds in the digital world.

That’s why I expect the American Data Privacy and Protection Act (H.R. 8152), even if it passes through both houses of Congress at full strength, to do jack shit. Or worse, to make our experience of life in the digital world even more complicated, by requiring us to opt-out, rather than opt-in (yep, it’s in the law—as a right, no less), to tracking-based advertising everywhere. And we know how well that’s been going. (Read this whole post by Tom Fishburne, the Marketoonist, for a picture of how less than zero progress has been made, and how venial and absurd “consent” gauntlets on websites have become.) Do a search for https://www.google.com/search?q=gdpr+compliance to see how large the GDPR “compliance” business has become. Nearly all your 200+ million results will be for services selling obedience to the letter of the GDPR while death-star laser beams blow its spirit into spinning shards. Then expect that business to grow once the ADPPA is in place.

There is only thing that will save us from adtech’s death star.

That’s tech of our own. Our tech. Personal tech.

We did it in the physical world with the personal privacy tech we call clothing, shelter, locks, doors, shades, and shutters. We’ve barely started to make the equivalents for the digital world. But the digital world is only a few decades old. It will be around for dozens, hundreds, or thousands of decades to come. And adtech is still just a teenager. We can, must, and will do better.

All we need is the tech. Big Tech won’t do it for us. Nor will Big Gov.

The economics will actually help, because there are many business problems in the digital world that can only be solved from the customers’ side, with better signaling from demand to supply than adtech-based guesswork can ever provide. Customer Commons lists fourteen of those solutions, here. Privacy is just one of them.

Use the Force, folks.

That Force is us.

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