The Hidden Ad Tech Gold Rush for Your Personal Data
What happens to all of the data generated by people as they use the web? Who is interested in the minutiae of our lives as we browse Facebook profiles, read the news or shop for new socks?
The truth of the matter is we that are all part of a digital supply chain. The ‘digital breadcrumbs’ that we scatter around as we use the web are data points, which often become the basis of someone else’s narrative about us.
Like any supply chain, there are the big players – in the digital supply chain, these are the data brokers, the big platforms and the search engines.
Ad tech firms like Epsilon, Acxiom, Datalogix and Bluekai track our online behaviour, and sell this information to the highest bidder. While they amass large silos of data about us, as individuals we generally cannot find out what data a broker holds about us, how the information was obtained, or how it is used.
The list of companies in this business is long and obscure and it is fair to say that they pose a threat to personal privacy.
You can tell this issue is gaining visibility when the CEO of Apple, Tim Cook, takes a swipe at this industry with statements like this:
We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t “monetize” the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you.
The Electronic Frontier Foundation (EFF) offers Privacy Badger which blocks particular ads and trackers. Try it – and check how many companies are tracking you when you visit your favourite sites.
Disconnect has created a similar product: “our mission is to make the Internet better by giving people greater transparency and control over the personal information they share online”
PageFair’s 2015 ad block report found that “misuse of personal information was the primary reason to enable ad blocking”. The 2015 DCN Consumer Ad Block Report examined consumer attitudes toward adblocking software, and found that 68% are concerned when ads track their behavior. Studies conducted by Customer Commons, Wharton, Pew and TRUSTe all show that a majority of the web users feel that their privacy is under threat online.
Google acknowledges adblocking as a threat to their business in their 10-K documents for 2015:
New technologies could block online ads, which would harm our Google business. Technologies have been developed that can block the display of our ads and that provide tools to users to opt out of our advertising products. Most of our Google revenues are derived from fees paid to us by advertisers in connection with the display of ads on web pages for our users. As a result, such technologies and tools could adversely affect our operating results.
Gold Rush for Personal Data
Advertisers and Ad Tech companies – if they will admit to it – are feeding a large secondary market for data which is generally collected during the various phases of online behavioral advertising (OBA) – though may not be related to the transaction itself. The secondary market for data seeks to extract value which is mainly sourced through the funnel of OBA – many of the trackers, cookies, etc., are not actually advertising related but manifest via the products of ad tech companies. I would posit that the marginal value obtained from the data part of OBA can sometimes be greater than that derived from the advertising part.
There is a great analogy here with the mortgage-backed securities (MBS) market, which imploded during the global financial crisis. At the peak of the market, even low value, high-risk mortgages were worth a broker’s time to extend, as there was always demand in the secondary market. This leads to some interesting parallels to the online ads business with regard to the quality, content and purpose behind a lot of OBA.
Many users of adblockers appear to be taking a stand at being in put a sort of digital enclosure, where they are pushed to consume content irrelevant to their interests or disclose personal information as part of a seemingly one-sided bargain.
We are not seats or eyeballs or end users or consumers. We are human beings—and our reach exceeds your grasp. Deal with it. cluetrain.com
Without the emergence of leaders in the industry who could evolve from their position as gatekeepers, a maelstrom of confusion is likely to continue. There has been a clear erosion of trust and this has led to the situation we now face.
Although the tech industry sometimes likes to think that it operates in a neutral zone, the ethical issues inherent to tech are not markedly different to those facing other industries.
An organisation’s responsibility within a supply chain is derived from the benefits it receives from the practices of the supply chain. In accepting the benefits, should it not also accept the responsibilities – in the case of tech, to deal with user data in a transparent , equitable and respectful manner?
The EU is taking note of this issue and has just issued new rules which include provisions on
- the right to be forgotten,
- “clear and affirmative consent” to the processing of private data by the person concerned,
- the right to transfer your data to another service provider,
- the right to know when your data has been hacked,
- ensuring that privacy policies are explained in clear and understandable language, and
- stronger enforcement and fines up to 4% of firms’ total worldwide annual turnover, as a deterrent to breaking the rules.
At Twitter we always strived to create transparent policies for advertisers, developers and users to act in a responsible manner toward user data. We took action when the supply chain raised issues – for instance where an advertiser had obtained information about the health status of users from a third party.
PageFair is committed to leading the way for publishers and respecting consumers. We believe that there is a balance to be struck that can be a win-win for all parties.
As we’ve written before on this blog, we believe that a principled approach is needed:
- Consumers need tools to reject and complain about advertising.
- Publishers should display only a limited number of premium advertising slots.
- The use of contextual ad targeting should be employed more widely.
- Better metrics of advertising success are needed. Advertisers need to focus less on clicks and impressions.
We are at a time of change in the industry – this is an opportunity that can be grasped by industry leaders to move forward in a united way that benefits all concerned, instead of giving way to legal and business squabbles over perceived territory and unenforceable legal rights.
PageFair’s ad serving technology displays safe and respectful ads in a way that adblockers are unable to block. It is the leading global authority on adblocking, issuing the most widely-cited reports on the topic over the last four years. PageFair is also working with global stakeholders, including publishers, consumer groups, advertisers, agencies, and browsers, to develop sustainable approaches to advertising on the web.