adtech

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This is wrong:

Because I’m not blocking ads. I’m blocking tracking.

In fact I welcome ads—especially ones that sponsor The Washington Post and other fine publishers. I’ll also be glad to subscribe to the Post once it stops trying to track me off their site. Same goes for The New York Times, The Wall Street Journal and other papers I value and to which I no longer subscribe.

Right now Privacy Badger protects me from 20 and 35 potential trackers at those papers’ sites, in addition to the 19 it finds at the Post. Most of those trackers are for stalking readers like marked animals, so their eyeballs can be shot by “relevant,” “interest-based” and “interactive” ads they would never request if they had much choice about it—and in fact have already voted against with ad blocking, which by 2015 was already the biggest boycott in world history. As I point out in that link (and Don Marti did earlier in DCN), there was in that time frame a high correlation between interest in blocking ads and interest (surely by the ad industry) in retargeting, which is the most obvious evidence to people that they are being tracked. See here:

Tracking-based ads, generally called adtech, do not sponsor publications. They use publications as holding pens in which human cattle can be injected with uninvited and unwelcome tracking files (generally called cookies) so their tracked eyeballs can be shot, wherever they might show up, with ads aimed by whatever surveillance data has been gleaned from those eyeballs’ travels about the Net.

Real advertising—the kind that makes brands and sponsors publications—doesn’t track people. Instead it is addressed to whole populations. In doing so it sponsors the media it uses, and testifies to those media’s native worth. Tracking-based ads can’t and don’t do that.

That tracking-based ads pay, and are normative in the extreme, does not make right the Post‘s participation in the practice. Nor does it make correct the bad thinking (and reporting!) behind notices such as the one above.

Let’s also be clear about two myths spread by the “interactive” (aka “relevant” and “interest-based”) advertising business:

  1. That the best online advertising is also the most targeted—and “behavioral” as well, meaning informed by knowledge about an individual, typically gathered by tracking. This is not the kind of advertising that made Madison Avenue, that created nearly every brand you can name, and that has sponsored publishers and other media for the duration. Instead it is direct marketing, aka direct response marketing. Both of those labels are euphemistic re-brandings that the direct mail business gave itself after the world started calling it junk mail. Sure, much (or most) of the paid messages we see online are called advertising, and look like advertising; but as long as they want to get personal, they’re direct marketing.
  2. That tracking-based advertising (direct marketing by another name) is the business model of the “free” Internet. In fact the Internet at its base is as free as gravity and sunlight, and floats all business boats, whether based on advertising or not.

Getting the world to mistake direct marketing for real advertising is one of the great magic tricks of all time: a world record for misdirection in business. To help explain the difference, I wrote Separating Advertising’s Wheat From Chaff, the most quoted line from which is “Madison Avenue fell asleep, direct response marketing ate its brain, and it woke up as an alien replica of itself.” Alas, the same is true for the business offices of the Post and every other publisher that depends on tracking. They ceased selling their pages as spaces for sponsors and turned those spaces over to data vampires living off the blood of readers’ personal data.

There is a side for those publishers to take on this thing, and it’s not with the tracking-based advertising business. It is with their own moral backbone, and with the readers who still keep faith in it.

If any reporter (e.g.@CraigTimberg @izzadwoskin@nakashimae ‏and @TonyRomm) wants to talk to me about this, write me at doc at searls.com or DM me here on Twitter.* Thanks.

Bonus link (and metaphor)

*So far, silence. But hey: I know I’m asking journalists to grab a third rail here. And it’s one that needs to be grabbed. There might even be a Pulitzer for whoever grabs it. Because the story is that big, and it’s not being told, at least not by any of the big pubs. The New York TimesPrivacy Project has lots of great stuff, but none that grabs the third rail. The closest the Times has come is You’re not alone when you’re on Google, by Jennifer Senior (@JenSeniorNY). In it she says “your newspaper” (alas, not this one) is among the culprits. But it’s a step. We need more of those. (How about it, @cwarzel?)

[Later…] We actually have a great model for how the third rail might be grabbed, because The Wall Street Journal wrestled it mightily with the What They Know series, which ran from 2010 to 2012. For most of the years after that, the whole series, which was led by Julia Angwin and based on lots of great research, was available on the Web for everybody at http://wsj.com/wtk. But that’s a 404 now. If you want to see a directory of the earliest pieces, I list them in a July 2010 blog post titled The Data Bubble. That post begins,

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.

Alas, the tide did not turn. It kept coming in and getting deeper. And now we’re drowning under it.

The answer is, we don’t know. Also, we may never know, because—

  • It’s too hard to measure (especially if you’re talking about the entire Net)
  • Too so much of the usage is in mobile devices that vary enormously
  • The browser makers are approaching ad blocking and tracking protection in different and new ways that change frequently, and the same goes for ad-blocking and tracking-protecting extensions and add-ons. One of them (Adblock Plus) is actually in the advertising business (which Wikipedia politely calls ad filtering)
  • Some of the most easily sourced measures are surveys, yet what people say and what they do are very different things
  • Some of the most widely cited findings are from sources with conflicted interests (for example, selling anti-ad-blocking services), or which aggregate multiple sources that aren’t revealed when cited
  • Actors good and bad in the ecosystem that ad blocking addresses also contribute to the fudge

But let’s explore a bit anyway, working with what we’ve got, flawed though much of it may be. If you’re a tl;dr kind of reader, jump down to the conclusions at the end.

Part 1: ClarityRay and Pagefair

Between 2012 and 2017, the most widely cited ad blocking reports were by ClarityRay and PageFair, in that order. There are no links to ClarityRay’s 2012 report, which I cited here in 2013. PageFair links to their 2015, 2016 (mobile) and 2017 reports are still live. The company also said last November that it was at work on another report. This was after PageFair was acquired by Blockthrough (“the leading adblock recovery program”). A PageFair blog post explains it.

I placed a lot of trust in PageFair’s work, mostly because I respected Dr. Johnny Ryan (@JohnnyRyan), who left PageFair for Brave in 2018. I also like what I know about Matthew Cortland, who was also at PageFair, and may still be. Far as I know, he hasn’t written anything about ad blocking research (but maybe I’ve missed it) since 2017.

Here are the main findings from PageFair’s 2017 report:

  • 615 million devices now use adblock
  • 11% of the global internet population is blocking ads on the web

Part 2: GlobalWebIndex

In January 2016, GlobalWebIndex said “37% of mobile users … say they’ve blocked ads on their mobile within the last month.” I put that together with Statista’s 2017 claim that there were then more than 4.6 billion mobile phone users in the world, which suggested that 1.7 billion people were blocking ads by that time.

Now GlobalWebIndex‘s Global Ad-Blocking Behavior report says 47% of us are blocking ads now. It also says, “As a younger and more engaged audience, ad-blockers also are much more likely to be paying subscribers and consumers. Ad-free premium services are especially attractive.” Which is pretty close to Don Marti‘s long-standing claim that readers who protect their privacy are more valuable than readers who don’t.

To get a total ad blocking population from that 47%, one possible source to cite is Internet World Stats:

Note that Internet World Stats appears to be a product of the Miniwatts Marketing Group, whose website is currently a blank WordPress placeholder. But, to be modest about it, their number is lower than Statista’s from 2016: “In 2019 the number of mobile phone users is forecast to reach 4.68 billion.” So let’s run with the lower one, at least for now.

Okay, so if 47% of us are using ad blockers, and Internet World Stats says there were 4,312,982,270 Internet users by the end of last year (that’s mighty precise!), the combined numbers suggest that more than 2,027,101,667 people are now blocking ads worldwide. So, we might generalize, more than two billion people are blocking ads today. Hence the headline above.

Perspective: back in 2015, we were already calling ad blocking The biggest boycott in human history. And that was when the number was just “approaching 200 million.”

More interesting to me is GlobalWebIndex’s breakouts of listed reasons why the people surveyed blocked ads. Three in particular stand out:

  • Ads contain viruses or bugs, 38%
  • Ads might compromise my online privacy, 26%
  • Stop ads being personalized, 22%

The problem here, as I said in the list up top, is that these are measured behaviors. They are sympathies. But they’re still significant, because sympathies sell. That means there are markets here. Opportunities to align incentives.

Part 3: Ad Fraud Researcher

I rely a great deal on Dr. Augustine Fou (@acfou), aka Independent Ad Fraud Researcher, to think and work more deeply and knowingly than I’ve done so far here (or may ever do).

Looking at Part 2 above (in an earlier version of this post), he tweeted, “I dispute these findings. ASKING people if they used an ad blocker in the past month is COMPLETELY inaccurate and inconsistent with people who ACTUALLY USE ad blockers regularly.” Also, “Source: GlobalWebIndex Q3 2018 Base: 93,803 internet users aged 16-64, among which were 42,078 respondents who have used an ad-blocker in the past month”. Then, “Are you going to take numbers extrapolated from 42,078 respondents and extrapolate that to the entire world? that would NOT be OK.” And, “Desktop ad blocking in the U.S. measured directly on sites which humans visit is in the 8 – 19% range. Bots must also be scrubbed because bots do not block ads and will skew ad blocking rates lower, if not removed.”

On that last tweet he points to his own research, published this month.There is lots of data in there, all of it interesting and unbiased. Then he adds, “your point about this being the ‘biggest boycott in human history’ is still valid. But the numbers from that ad blocking study should not be used.”

Part 4: Comscore

Among the many helpful tweets in response to the first draft of this post was this one by Zubair Shafiq (@zubair_shafiq), Assistant Professor of Computer Science at the University of Iowa, where he researches computer networks, security, and privacy. His tweet points to Ad Blockers: Global Prevalence and Impact, by Matthew Malloy, Mark McNamara, Aaron Cahn and Paul Barford, from 2016. Here is one chart among many in the report:

The jive in the Geo row is explained at that link. A degree in statistics will help.

Part 5: Statista

Statista seems serious, but Ad blocking user penetration rate in the United States from 2014 to 2020 is behind a paywall. Still, they do expose this hunk of text: “The statistic presents data on ad blocking user penetration rate in the United States from 2014 to 2020. It was found that 25.2 percent of U.S. internet users blocked ads on their connected devices in 2018. This figure is projected to grow to 27.5 percent in 2020.”

Provisional Conclusions

  1. The number is huge, but we don’t know how huge.
  2. Express doubt about any one large conclusion. Augustine Fou cautions me (and all of us) to look at where the data comes from, why it’s used, and how. In the case of Statista, for example, the data is aggregated from other sources. They don’t do the research themselves. It’s also almost too easy to copy and paste (as I’ve done here) images that might themselves be misleading. The landmark book on misleading statistics—no less relevant today than when it was written in 1954 (and perhaps more relevant than ever)—is How to Lie With Statistics.
  3. Everything is changing. For example, browsers are starting to obsolesce the roles played by ad blocking and tracking protection extensions and add-ons. Brave is the early leader, IMHO. Safari, Firefox and even Chrome are all making moves in this direction. Also check out Ghostery’s Cliqz. For some perspective on how long this is taking, take a look at what I was calling for way back in 2015.
  4. The market is sending a massive message.  That message is that advertising online has come to have massively negative value. Ad blocking and tracking protection are legitimate and eloquent messages from demand to supply. By fighting that message, marketing is crapping on most obvious and gigantic clue it has ever seen. And the supply side of the market isn’t just marketers selling stuff. It’s developers who need to start working for the hundreds of millions of customers who have proven their value by using these tools.

The Spinner* (with the asterisk) is “a service that enables you to subconsciously influence a specific person, by controlling the content on the websites he or she usually visits.” Meaning you can hire The Spinner* to hack another person.

It works like this:

  1. You pay The Spinner* $29. For example, to urge a friend to stop smoking. (That’s the most positive and innocent example the company gives.)
  2. The Spinner* provides you with an ordinary link you then text to your friend. When that friend clicks on the link, they get a tracking cookie that works as a bulls-eye for The Spinner* to hit with 10 different articles written specifically to influence that friend. He or she “will be strategically bombarded with articles and media tailored to him or her.” Specifically, 180 of these things. Some go in social networks (notably Facebook) while most go into “content discovery platforms” such as Outbrain and Revcontent (best known for those clickbait collections you see appended to publishers’ websites).

The Spinner* is also a hack on journalism, designed like a magic trick to misdirect moral outrage toward The Spinner’s obviously shitty business, and away from the shitty business called adtech, which not only makes The Spinner possible, but pays for most of online journalism as well.

The magician behind The Spinner* is “Elliot Shefler.” Look that name up and you’ll find hundreds of stories. Here are a top few, to which I’ve added some excerpts and notes:

  • For $29, This Man Will Help Manipulate Your Loved Ones With Targeted Facebook And Browser Links, by Parmy Olson @parmy in Forbes. Excerpt: He does say that much of his career has been in online ads and online gambling. At its essence, The Spinner’s software lets people conduct a targeted phishing attack, a common approach by spammers who want to secretly grab your financial details or passwords. Only in this case, the “attacker” is someone you know. Shefler says his algorithms were developed by an agency with links to the Israeli military.
  • For $29, This Company Swears It Will ‘Brainwash’ Someone on Facebook, by Kevin Poulson (@kpoulson) in The Daily Beast. A subhead adds, A shadowy startup claims it can target an individual Facebook user to bend him or her to a client’s will. Experts are… not entirely convinced.
  • Facebook is helping husbands ‘brainwash’ their wives with targeted ads, by Simon Chandler (@_simonchandler_) in The Daily Dot. Excerpt: Most critics assume that Facebook’s misadventures relate only to its posting of ads paid for by corporations and agencies, organizations that aim to puppeteer the “average” individual. It turns out, however, that the social network also now lets this same average individual place ads that aim to manipulate other such individuals, all thanks to the mediation of a relatively new and little-known company…
  • Brainwashing your wife to want sex? Here is adtech at its worst., by Samuel Scott (@samueljscott) in The Drum. Alas, the piece is behind a registration wall that I can’t climb without fucking myself (or so I fear, since the terms and privacy policy total 32 pages and 10,688 words I’m not going to read), so I can’t quote from it.
  • Creepy company hopes ‘Inception’ method will get your wife in the mood, by Saqib Shah (@eightiethmnt) in The Sun, via The New York Post. Excerpt: “It’s unethical in many ways,” admitted Shefler, adding “But it’s the business model of all media. If you’re against it, you’re against all media.” He picked out Nike as an example, explaining that if you visit the brand’s website it serves you a cookie, which then tailors the browsing experience to you every time you come back. A shopping website would also use cookies to remember the items you’re storing in a virtual basket before checkout. And a social network might use cookies to track the links you click and then use that information to show you more relevant or interesting links in the future…The Spinner started life in January of this year. Shefler claims the company is owned by a larger, London-based “agency” that provides it with “big data” and “AI” tools.
  • Adtech-for-sex biz tells blockchain consent app firm, ‘hold my beer’, by Rebecca Hill (@beckyhill) in The Register. The subhead says, Hey love, just click on this link… what do you mean, you’re seeing loads of creepy articles?
  • New Service Promises to Manipulate Your Wife Into Having Sex With You, by Fiona Tapp (@fionatappdotcom) in Rolling Stone. Excerpt: The Spinner team suggests that there isn’t any difference, in terms of morality, from a big company using these means to influence a consumer to book a flight or buy a pair of shoes and a husband doing the same to his wife. Exactly.
  • The Spinner And The Faustian Bargain Of Anonymized Data, by Lauren Arevalo-Downes (whose Twitter link by the piece goes to a 404) in A List Daily. On that site, the consent wall that creeps up from the bottom almost completely blanks out the actual piece, and I’m not going to “consent,” so no excertoing here either.
  • Can you brainwash one specific person with targeted Facebook ads? in TripleJ Hack, by ABC.net.au. Excerpt: Whether or not the Spinner has very many users, whether or not someone is going to stop drinking or propose marriage simply because they saw a sponsored post in their feed, it seems feasible that someone can try to target and brainwash a single person through Facebook.
  • More sex, no smoking – even a pet dog – service promises to make you a master of manipulation, by Chris Keall (@ChrisKeall) in The New Zealand Herald. Excerpt: On one level, The Spinner is a jape, rolled out as a colour story by various publications. But on another level it’s a lot more sinister: apparently yet another example of Facebook’s platform being abused to invade privacy and manipulate thought.
  • The Cambridge Analytica of Sex: Online service to manipulate your wife to have sex with you, by Ishani Ghose in meaww. Excerpt: The articles are all real but the headlines and the descriptions have been changed by the Spinner team. The team manipulating the headlines of these articles include a group of psychologists from an unnamed university. As the prepaid ads run, the partner will see headlines such as “3 Reasons Why YOU Should Initiate Sex With Your Husband” or “10 Marriage Tips Every Woman Needs to Hear”.

Is Spinner for real?

“Elliot Shefler” is human for sure. But his footprint online is all PR. He’s not on Facebook, Twitter or Instagram. The word “Press” (as in coverage) at the top of the Spinner website is just a link to a Google search for Elliot Shefler, not to curated list such as a real PR person or agency might compile.

Fortunately, a real PR person, Rich Leigh (@RichLeighPR) did some serious digging (you know, like a real reporter) and presented his findings in his blog, PR Examples, in a post titled Frustrated husbands can ‘use micro-targeted native ads to influence their wives to initiate sex’ – surely a PR stunt? Please, a PR stunt? It ran last July 10th, the day after Rich saw this tweet by Maya Kosoff (@mekosoff):

—and this one:

The links to (and in) those tweets no longer work, but the YouTube video behind one of the links is still up. The Spinner itself produced the video, which is tricked to look like a real news story. (Rich does some nice detective work, figuring that out.) The image above is a montage I put together from screenshots of the video.

Here’s some more of what Rich found out:

  • Elliot – not his real name, incidentally, his real name is Halib, a Turkish name (he told me) – lives, or told me he lives, in Germany

  • When I asked him directly, he assured me that it was ‘real’, and when I asked him why it didn’t work when I tried to pay them money, told me that it would be a technical issue that would take around half an hour to fix, likely as a result of ‘high traffic. I said I’d try again later. I did – keep reading

  • It is emphatically ‘not’ PR or marketing for anything

  • He told me that he has 5-6,000 paying users – that’s $145,000 – $174,000, if he’s telling the truth

  • Halib said that Google Ads were so cheap as nobody was bidding on them for the terms he was going for, and they were picking up traffic for ‘one or two cents’

  • He banked on people hate-tweeting it. “I don’t mind what they feel, as long as they think something”, Halib said – which is scarily like something I’ve said in talks I’ve given about coming up with PR ideas that bang

  • The service ‘works’ by dropping a cookie, which enables it to track the person you’re trying to influence in order to serve specific content. I know we had that from the site, but it’s worth reiterating

Long post short, Rich says Habib and/or Elliot is real, and so is The Spinner.

But what matters isn’t whether or not The Spinner is real. It’s that The Spinner misdirects reporters’ attention away from what adtech is and does, which is spy on people for the purpose of aiming stuff at them. And that adtech isn’t just what funds all of Facebook and much of Google (both giant and obvious targets of journalistic scrutiny), but what funds nearly all of publishing online, including most reporters’ salaries.

So let’s look deeper, starting here: There is no moral difference between planting an unseen tracking beacon on a person’s digital self and doing the same on a person’s physical self.

The operational difference is that in the online world it’s a helluva lot easier to misdirect people into thinking they’re not being spied on. Also a helluva lot easier for spies and intermediaries (such as publishers) to plausibly deny that spying is what they’re doing. And to excuse it, saying for example “It’s what pays for the Free Internet!” Which is bullshit, because the Internet, including the commercial Web, got along fine for many years before adtech turned the whole thing into Mos Eisley. And it will get along fine without adtech after we kill it, or it dies of its own corruption.

Meanwhile the misdirection continues, and it’s away from a third rail that honest and brave journalists† need to grab: that adtech is also what feeds most of them.

______________

† I’m being honest here, but not brave. Because I’m safe. I don’t work for a publication that’s paid by adtech. At Linux Journal, we’re doing the opposite, by being the first publication ready to accept terms that our readers proffer, starting with Customer CommonsP2B1(beta), which says “Just show me ads not based on tracking me.”

I came up with that law in the last millennium and it applied until Chevy discontinued the Cavalier in 2005. Now it should say, “You’re going to get whatever they’ve got.”

The difference is that every car rental agency in days of yore tended to get their cars from a single car maker, and now they don’t. Back then, if an agency’s relationship was with General Motors, which most of them seemed to be, the lot would have more of GM’s worst car than of any other kind of car. Now the car you rent truly is whatever. In the last year we’ve rented at least one Kia, Hyundai, Chevy, Nissan, Volkswagen, Ford and Toyota, and that’s just off the top of my head. (By far the best was a Chevy Impala. I actually loved it. So, naturally, it’s being discontinued.)

All of that, of course, applies only in the U.S. I know less about car rental verities in Europe, since I haven’t rented a car there since (let’s see…) 2011.

Anyway, when I looked up doc searls chevy cavalier to find whatever I’d written about my felicitous Fourth Law, the results included this, from my blog in 2004…

Five years later, the train pulls into Madison Avenue

ADJUSTING TO THE REALITY OF A CONSUMER-CONTROLLED MARKET, by Scott Donathon in Advertising Age. An excerpt:

Larry Light, global chief marketing officer at McDonald’s, once again publicly declared the death of the broadcast-centric ad model: “Mass marketing today is a mass mistake.” McDonald’s used to spend two-thirds of its ad budget on network prime time; that figure is now down to less than one-third.

General Motors’ Roger Adams, noting the automaker’s experimentation with less-intrusive forms of marketing, said, “The consumer wants to be in control, and we want to put them in control.” Echoed Saatchi & Saatchi chief Kevin Roberts, “The consumer now has absolute power.”

“It is not your goddamn brand,” he told marketers.

This consumer empowerment is at the heart of everything. End users are now in control of how, whether and where they consume information and entertainment. Whatever they don’t want to interact with is gone. That upends the intrusive model the advertising business has been sustained by for decades.

This is still fucked, of course. Advertising is one thing. Customer relationships are another.

“Consumer empowerment” is an oxymoron. Try telling McDonalds you want a hamburger that doesn’t taste like a horse hoof. Or try telling General Motors that nobody other than rental car agencies wants to buy a Chevy Cavalier or a Chevy Classic; or that it’s time, after 60 years of making crap fixtures and upholstery, to put an extra ten bucks (or whatever it costs) into trunk rugs that don’t seem like the company works to make them look and feel like shit. Feel that “absolute power?” Or like you’re yelling at the pyramids?

Real demand-side empowerment will come when it’s possible for any customer to have a meaningful — and truly valued — conversation with people in actual power on the supply side. And those conversations turn into relationships. And those relationships guide the company.

I’ll believe it when I see it.

Meanwhile the decline of old-fashioned brand advertising on network TV (which now amounts to a smaller percentage of all TV in any case) sounds more to me like budget rationalization than meaningful change where it counts.

Thanks to Terry for the pointer.

Three things about that.

First, my original blog (which ran from 1999 to 2007) is still up, thanks to Jake Savin and Dave Winer, at http://weblog.searls.com. (Adjust your pointers. It’ll help Google and Bing forget the old address.)

Second, I’ve been told by rental car people that the big American car makers actually got tired of hurting their brands by making shitty cars and scraping them off on rental agencies. So now the agencies mostly populate their lots surplus cars that don’t make it to dealers for various reasons. They also let their cars pile up 50k miles or more before selling them off. Also, the quality of cars in general is much higher than it used to be, and the experience of operating them is much more uniform—meaning blah in nearly identical ways.

Third, I’ve changed my mind on brand advertising since I wrote that. Two reasons. One is that brand advertising sponsors the media it runs on, which is a valuable thing. The other is that brand advertising really does make a brand familiar, which is transcendently valuable to the brand itself. There is no way personalized and/or behavioral advertising can do the same. Perhaps as much as $2trillion has been spent on tracking-based digital advertising, and not one brand known to the world has been made by it.

And one more thing: since we don’t commute, and we don’t need a car most of the time, we now favor renting cars over owning them. Much simpler and much cheaper. And the cars we rent tend to be nicer than the used cars we’ve owned and mostly driven into the ground. You never know what you’re going to get, but generally they’re not bad, and not our problem if something goes wrong with one, which almost never happens.

 

Really?

It’s misses like this that have people thinking there’s nothing to fear from AI.

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river bend

Publishing and advertising both need to bend back toward where they came from, and what works. I see hope for that in the news today.

In Refinery29 Lays Off 10% of Staff as 2018 Revenue Comes Up Short, by Todd Spangler, (@xpangler) of Variety reports,

Digital media company Refinery29, facing a 5% revenue shortfall for the year, is cutting 10% of its workforce, or about 40 employees.Digital media company Refinery29, facing a 5% revenue shortfall for the year, is cutting 10% of its workforce, or about 40 employees.

Company co-founders and co-CEOs Philippe von Borries and Justin Stefano announced the cuts in an internal memo. “While our 2018 revenue will show continued year-over-year growth, we are projecting to come in approximately 5% short of our goal,” they wrote. As a result of its financial pressures, “we will be parting ways with approximately 10% of our workforce.”
The latest cuts, first reported by the Wall Street Journal, come after New York-based Refinery29 laid off 34 employees in December 2017.

Refinery29, which targets a millennial female audience, is going to cut back on content “with a short shelf life,” according to the execs. “While this type of content has been driving views, it has not yielded a great monetization strategy to justify the same level of continued investment.” Von Borries and Stefano wrote that they see sustainable growth in “premium, evergreen” programming, and plan to produce more video (both short- and long-form) on that front.

I’ve boldfaced the important stuff. To explain why it’s important, dig this, from Refinery29 Lays Off 10% of Its Staff, Unifies Sales Team, by Melynda Fuller (@MGrace_Fuller) in MediaPost:

As part of the restructuring, Refinery29 will also unify its sales teams into a unified Customer Solutions Group, in addition to a Sales Planning and Operations Group.

This suggests that Refinery29 is becoming a high-integrity publication, and not just another content pump and eyeball-shooting gallery for adtech (tracking-based advertising). (This Digiday piece by @maxwillens may suggest the same.) If that’s so, then there is new hope: not just for publishing online, but for the kind of brand advertising that actually sponsors publications, and which has worked for both brands and publications since forever in the offline world.

By now pretty much all of online advertising is adtech, which doesn’t sponsor publishers. Instead it uses publishers to mark and track eyeballs wherever they might go. It does that by planting tracking beacons (mixed like poison blueberries into those cookies  sites now require “consent” to) on readers’ browsers or phones, and then shoots the readers’ eyeballs with ads when they show up elsewhere on the Web, preferably on the cheapest possible site, so those eyeballs can be hit as often as possible within the budget the advertiser has paid adtech intermediaries. (To readers the most obvious example of this is “retargeting,” perfectly described by The Onion in Woman Stalked Across Eight Websites By Obsessed Shoe Advertisement.)

Advertising, real advertising—the kind that makes brands and sponsors publications—doesn’t do any of that. Here’s how I explain the difference in GDPR will pop the adtech bubble:

First, advertising:

  1. Advertising isn’t personal, and doesn’t have to be. In fact, knowing it’s not personal is an advantage for advertisers. Consumers don’t wonder what the hell an ad is doing where it is, who put it there, or why. The cognitive overhead for everybody is as close to zero as possible.
  2. Advertising makes brands. Nearly all the brands you know were burned into your brain by advertising. In fact the term branding was borrowed by advertising from the cattle business. (Specifically by Procter and Gamble in the early 1930s.)
  3. Advertising carries an economic signal. Meaning that it shows a company can afford to advertise. Tracking-based advertising can’t do that. (For more on this, read Don Marti, starting here.)
  4. Advertising sponsors media, and those paid by media. All the big pro sports salaries are paid for by advertising that sponsors game broadcasts. For lack of sponsorship, media—especially publishers—are hurting. @WaltMossberg learned why on a conference stage when an ad agency guy said the agency’s ads wouldn’t sponsor Walt’s new publication, recode. Walt: “I asked him if that meant he’d be placing ads on our fledgling site. He said yes, he’d do that for a little while. And then, after the cookies he placed on Recode helped him to track our desirable audience around the web, his agency would begin removing the ads and placing them on cheaper sites our readers also happened to visit. In other words, our quality journalism was, to him, nothing more than a lead generator for target-rich readers, and would ultimately benefit sites that might care less about quality.” With friends like that, who needs enemies?

Second, Adtech:

  1. Adtech is built to undermine the brand value of all the media it uses, because it cares about eyeballs more than media, and it causes negative associations with brands. Consider this: perhaps a $trillion or more has been spent on adtech, and not one brand known to the world has been made by it. (Bob Hoffman, aka the Ad Contrarian, is required reading on this.)
  2. Adtech wants to be personal. That’s why it’s tracking-based. Though its enthusiasts call it “interest-based,” “relevant” and other harmless-sounding euphemisms, it relies on tracking people. In fact it can’t exist without tracking people. (Note: while all adtech is programmatic, not all programmatic advertising is adtech. In other words, programmatic advertising doesn’t have to be based on tracking people.)
  3. Adtech spies on people and violates their privacy. By design. Never mind that you and your browser or app are anonymized. The ads are still for your eyeballs, and correlations can be made.
  4. Adtech is full of fraud and a vector for malware. @ACFou is required reading on this.
  5. Adtech incentivizes publications to prioritize “content generation” over journalism. More here and here.
  6. Intermediators take most of what’s spent on adtech. Bob Hoffman does a great job showing how as little as 3¢ of a dollar spent on adtech actually makes an “impression. The most generous number I’ve seen is 12¢. (When I was in the ad agency business, back in the last millennium, clients complained about our 15% take. Media our clients bought got 85%.)
  7. Adtech gives fake news a business model, because fake news is easier to produce than the real kind, and adtech will pay anybody a bounty for hauling in eyeballs.
  8. Adtech incentivizes hate speech and tribalism by giving both—and the platforms that host them—a business model too.
  9. Adtech relies on misdirection. See, adtech looks like advertising, and is called advertising; but it’s really direct marketing, which is descended from junk mail and a cousin of spam. Because of that misdirection, brands think they’re placing ads in media, while the systems they hire are actually chasing eyeballs to anywhere. (Pro tip: if somebody says every ad needs to “perform,” or that the purpose of advertising is “to get the right message to the right person at the right time,” they’re actually talking about direct marketing, not advertising. For more on this, read Rethinking John Wanamaker.)
  10. Compared to advertising, adtech is ugly. Look up best ads of all time. One of the top results is for the American Advertising Awards. The latest winners they’ve posted are the Best in Show for 2016. Tops there is an Allstate “Interactive/Online” ad pranking a couple at a ball game. Over-exposure of their lives online leads that well-branded “Mayhem” guy to invade and trash their house. In other words, it’s a brand ad about online surveillance.
  11. Adtech has caused the largest boycott in human history. By more than a year ago, 1.7+ billion human beings were already blocking ads online.

By focusing less on “content-production” (that stuff with a short shelf life) and consolidating its sales staff, Refinery29 appears to be re-making itself as a publication that can attract actual sponsors—real brands, doing real branding—and not just eyeball-hunting intermediaries that deliver lots of data and numbers to advertisers but nothing with rich value.

[Later…] This Digiday piece may support that t

If that’s the case, online publishing is starting to turn a corner, led by Refinery29, and heading back to what makes it valuable: to its readers, to its advertisers and to itself.

We live in two worlds now: the natural one where we have bodies that obey the laws of gravity and space/time, and the virtual one where there is no gravity or distance (though there is time).

In other words, we are now digital as well as physical beings, and this is new to a human experience where, so far, we are examined and manipulated like laboratory animals by giant entities that are out of everybody’s control—including theirs.

The collateral effects are countless and boundless.

Take journalism, for example. That’s what I did in a TEDx talk I gave last month in Santa Barbara:

I next visited several adjacent territories with a collection of brilliant folk at the Ostrom Workshop on Smart Cities. (Which was live-streamed, but I’m not sure is archived yet. Need to check.)

Among those folk was Brett Frischmann, whose canonical work on infrastructure I covered here, and who in Re-Engineering Humanity (with Evan Selinger) explains exactly how giants in the digital infrastructure business are hacking the shit out of us—a topic I also visit in Engineers vs. Re-Engineering (my August editorial in Linux Journal).

Now also comes Bruce Schneier, with his perfectly titled book Click Here to Kill Everybody: Security and Survival in a Hyper-Connected World, which Farhad Manjoo in The New York Times sources in A Future Where Everything Becomes a Computer Is as Creepy as You Feared. Pull-quote: “In our government-can’t-do-anything-ever society, I don’t see any reining in of the corporate trends.”

In The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power, a monumental work due out in January (and for which I’ve seen some advance galleys) Shoshana Zuboff makes both cases (and several more) at impressive length and depth.

Privacy plays in all of these, because we don’t have it yet in the digital world. Or not much of it, anyway.

In reverse chronological order, here’s just some what I’ve said on the topic:

So here we are: naked in the virtual world, just like we were in the natural one before we invented clothing and shelter.

And that’s the challenge: to equip ourselves to live private and safe lives, and not just public and endangered ones, in our new virtual world.

Some of us have taken up that challenge too: with ProjectVRM, with Customer Commons, and with allied efforts listed here.

And I’m optimistic about our prospects.

I’ll also be detailing that optimism in the midst of a speech titled “Why adtech sucks and needs to be killed” next Wednesday (October 17th) at An Evening with Advertising Heretics in NYC. Being at the Anne L. Bernstein Theater on West 50th, it’s my off-Broadway debut. The price is a whopping $10.

 

 

fruit thought

If personal data is actually a commodity, can you buy some from another person, as if that person were a fruit stand? Would you want to?

Not yet. Or maybe not really.

Either way, that’s the idea behind the urge by some lately to claim personal data as personal property, and then to make money (in cash, tokens or cryptocurrency) by selling or otherwise monetizing it. The idea in all these cases is to somehow participate in existing (entirely extractive) commodity markets for personal data.

ProjectVRM, which I direct, is chartered to “foster development of tools and services that make customers both independent and better able to engage,” and is a big tent. That’s why on the VRM Developments Work page of the ProjectVRM wiki is a heading called Markets for Personal Data. Listed there are:

So we respect that work. We also need to recognize some problems it faces.

The first problem is that, economically speaking, data is a public good, meaning non-rivalrous and non-excludable. (Rivalrous means consumption or use by one party prevents the same by another, and excludable means you can prevent parties that don’t pay from access to it.) Here’s a table from Linux Journal column I wrote a few years ago:

Excludability Excludability
YES NO
Rivalness YES Private good: good: e.g., food, clothing, toys, cars, products subject to value-adds between first sources and final customers Common pool resource: e.g., sea, rivers, forests, their edible inhabitants and other useful contents
Rivalness NO Club good: e.g., bridges, cable TV, private golf courses, controlled access to copyrighted works Public good: e.g., data, information, law enforcement, national defense, fire fighting, public roads, street lighting

 

The second problem is that nature of data as a public good also inconveniences claims that it ought to be property. Thomas Jefferson explained this in his 1813 letter to Isaac MacPherson:

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation

Of course Jefferson never heard of data. But what he says about “the thinking power called an idea,” and how ideas are like fire, is essential in a very human way.

The third problem is that all of us as human beings are able to produce forms of value that far exceed that of our raw personal data.

Specifically, treating data as if it were a rivalrous and excludable commodity—such as corn, oil or fruit—not only takes Jefferson’s “thinking power” off the table, but misdirects attention, investment and development work away from supporting the human outputs that are fully combustible, and might be expansible over all space, without lessening density. Ideas can do that. Oil can’t, even though it’s combustible.

Put another way, why would you want to make almost nothing (the likely price) selling personal data on a commodity basis when you can make a lot more by selling your work where markets for work exist?

What makes us fully powerful as human beings is our ability to generate and share ideas and other combustible public goods, and not just to slough off data like so much dandruff. Or to be valued only for the labors we contribute as parts of industrial machines.

Important note: I’m not knocking labor here. Most of us have to work for wages as parts of industrial machines, or as independent actors. I do too. There is full honor in that. Yet our nature as distinctive and valuable human beings is to be more and other than a source of labor alone, and there are ways to make money from that fact too.

Many years ago JP Rangaswami (@jobsworth) and I made a distinction between making money with something and because of something. It’s a helpful one.

Example: I don’t make money with this blog. But I do make money because of it—and probably a lot more money than I would if this blog carried advertising or if I did it for a wage.

Which gets us to the idea behind declaring personal data as personal property, and creating marketplaces where people can sell their data.

The idea goes like this: there is a $trillion or more in business activity that trades or relies on personal data in many ways. Individual sources of that data should be able to get in on the action.

Alas, most of that $trillion is in what Shoshana Zuboff calls surveillance capitalism: a giant snake-ball of B2B activity wherein there is little interest in buying what can be had for free.

Worse, surveillance capitalism’s business is making guesses about you so it can sell you shit. On a per-message basis, this works about 0% of the time, even though massive amounts of money flow through that B2B snakeball (visualized as abstract rectangles here and here). Many reasons for that. Here are a few:

  1. Most of the time, such as right here and now, you’re not buying a damn thing, and not in a mood to be bothered by someone telling you what to buy.
  2. Companies paying other companies to push shit at you do not have your interests at heart—not even if their messages to you are, as they like to put it, “relevant” or “interest based.” (Which they almost always are not.)
  3. The entrails of surveillance capitalism are fully infected with fraud and malware.
  4. Surveillance capitalism is also quite satisfied to soak up to 97% of an advertising spend before an ad’s publisher gets its 3% for pushing an ad at you.

Trying to get in on that business is just an awful proposition.

Yes, I know it isn’t just surveillance capitalists who hunger for personal data. The health care business, for example, can benefit enormously from it, and is less of a snakeball, on the whole. But what will it pay you? And why should it pay you?

Won’t large quantities of anonymized personal data from iOS and Android devices, handed over freely, be more valuable to medicine and pharma than the few bits of data individuals might sell? (Apple has already ventured in that direction, very carefully, also while not paying for any personal data.)

And isn’t there something kinda suspect about personal data for sale? Such as motivating the unscrupulous to alter some of their data so it’s worth more?

What fully matters for people in the digital world is agency, not data. Agency is the power to act with full effect in the world. It’s what you have when you put your pants on, when you walk, or drive, or tell somebody something useful while they listen respectfully. It’s what you get when you make a deal with an equal.

It’s not what any of us get when we’re just “users” on a platform. Or when we click “agree” to one-sided terms the other party can change and we can’t. Both of those are norms in Web 2.0 and desperately need to be killed.

It’s still early. Web 2.0 is an archaic stage in the formation of the digital world. surveillance capitalism has also been a bubble ready to pop for years. The matter is when, not if. It’s too absurd, corrupt, complex and annoying to keep living forever.

So let’s give people ways to increase their agency, at scale, in the digital world. There’s no scale in selling one’s personal data. But there’s plenty in putting our most human of powers to work.

The most basic form of agency in the digital world is control over how our personal data might be used by others. There are lots of developers at work on this already. Here’s one list at ProjectVRM.

Bonus links:

 

 

 

 

Enforcing Data Protection: A Model for Risk-Based Supervision Using Responsive Regulatory Tools, a post by Dvara Research, summarizes Effective Enforcement of a Data Protection Regime, a deeply thought and researched paper by Beni Chugh (@BeniChugh), Malavika Raghavan (@teninthemorning), Nishanth Kumar (@beamboybeamboy) and Sansiddha Pani (@julupani). While it addresses proximal concerns in India, it provides useful guidance for data regulators everywhere.

An excerpt:

Any data protection regulator faces certain unique challenges. The ubiquitous collection and use of personal data by service providers in the modern economy creates a vast space for a regulator to oversee. Contraventions of a data protection regime may not immediately manifest and when they do, may not have a clear monetary or quantifiable harm. The enforcement perimeter is market-wide, so a future data protection authority will necessarily interface with other sectoral institutions.  In light of these challenges, we present a model for enforcement of a data protection regime based on risk-based supervision and the use of a range of responsive enforcement tools.

This forward-looking approach considers the potential for regulators to employ a range of softer tools before a breach to prevent it and after a breach to mitigate the effects. Depending on the seriousness of contraventions, the regulator can escalate up to harder enforcement actions. The departure from the focus on post-data breach sanctions (that currently dominate data protection regimes worldwide) is an attempt to consider how the regulatory community might act in coordination with entities processing data to minimise contraventions of the regime.

I hope European regulators are looking at this. Because, as I said in a headline to a post last month, without enforcement, the GDPR is a fail.

Bonus link from the IAPP (International Association of Privacy Professionals): When will we start seeing GDPR enforcement actions? We guess Feb. 22, 2019.

And the same goes for California’s AB-375 privacy bill.

The GDPR has been in force since May 25th, and it has done almost nothing to stop websites that make money from tracking-based-advertising stop participating in the tracking of readers. Instead almost all we’ve seen so far are requests for from websites to keep doing what they’re doing.

Only worse. Because now when you click “Accept” under an interruptive banner saying the site’s “cookies and other technologies collect data to enhance your experience and personalize the content and advertising you see,” you’ve just consented to being spied on. And they’re covered. They can carry on with surveillance-as-usual.

Score: Adtech 1, privacy 0.

Or so it seems. So far.

Are there any examples of publications that aren’t participating in #adtech’s spy game? Besides Linux Journal?

 

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