Daehee & Co.

The Prisoner's Dilemma of Surveillance Marketing

May 29, 2016

Privacy is heating up into a highly controversial topic and gaining critical mass in the media. These next few years will define and set the trajectory for the end of personal privacy as we know it, especially with the snowballing momentum of the “Internet of Things”, or begin the healing process to unravel the damage that’s been done and to change course towards laying the strong foundational building blocks for the future.

Snapchat billboard ad in Times Square

Many of today’s most valuable business models are propped up by capturing any and all data points that can be traded or sold to brokers and advertisers. Google and Facebook are competing with each other on the premise of monitoring your movement through life.

We rejoice and praise Yelp, Snapchat, Instagram et cetera as free apps, but we as users are mere tenant farmers for these brands. We gratefully toil and work their lands by producing trails of data, which they later get to sell for a profit. We’ve become a massive herd of civet cats shitting out digital gold.

In an interview at TNW Conference this past week, the CEO of Reddit gives a facetious peek into how they’re monetizing their “free” website:

Facebook has done us a huge favor in making people accept in-line native ads. That format is so good. […] But our targeting will be different, because we know all of your interests. Not only just your interests you are willing to declare publicly on Facebook - we know your dark secrets, we know everything.

With the costs of storage and bandwidth becoming laughably cheap, the attitude of companies now is to dump all the customer data into a digital warehouse, intentionally overlooking whether they need it right now or not. There’s a higher cost to potentially not having the customer data later on, as a missed opportunity for a competitive edge. As victims of their environment, where everyone else is doing the same, the companies subscribe to the same philosophy as NSA surveillance.

In my first job out of college I worked at Acxiom, one of the foremost information brokers. Internally we justified the data collection and progressive profiling of customers through what they do (and what they don’t do) by abstracting these insights. Instead of specific data points being tied to you when a broker like Acxiom sells your consumer profile, you’ll now be bucketed and re-bucketed into over 70 stereotypical categories such as “True Blues - Blue Collar Bunch,” “Modest Means - Penny Pinchers,” “Gen X Singles - Still Landlorded” and so on. And that makes it clean and compliant. Acxiom’s methodology is a hack to game the regulatory system, but actually does little to instill consumer confidence. Most consumers still don’t know that this happens in the background. You can find out for yourself which cluster you’re in and opt out.

The laws surrounding consumer privacy are evolving as quickly as our legal system can probably handle, but nowhere near fast enough to keep up with the advancement of technologies. Without laws and regulations that are strongly defined, and even more so because consumers have prioritized convenience and cost over their own privacy, what’s intuitive for corporations is the pragmatic path of taking the path of least resistance. Businesses have no incentive to act otherwise unless they have a righteous philosophy mandating a slow, uphill grind taking the harder path.

Privacy policies are now more important than ever before. They’ve been known as the boring, too-long-didn’t-read walls of text linked to from every website’s footer. The way they are written and presented now are nearly useless for the average consumer. Last week, a Norwegian non-profit made a farce out of this by doing a live-streamed reading of the popular apps’ privacy policies. It would take more than our lifetimes to try not only to read but also to understand each and every privacy policy of services and products that we use in our daily lives.

Privacy policies are written in legalese that is cryptic to the layman, and at times intentionally so. It’s better for the consumer not to see the ugliness beneath the surface, so companies believe they are doing us a favor by retaining the aesthetic experience through obfuscation.

There are well-meaning community projects like the Terms of Service; Didn’t Read that help summarize the evolving landscape of common privacy policies. But most people don’t know about this website, and quite frankly consider this entire subject matter a huge inconvenience and waste of time. “I don’t really care about my privacy; I have nothing to hide,” is the popular argument.

This is an interesting dilemma for fast-growing startups. Can we still choose to respect the privacy of our customers while staying competitive?

Not partaking in easy street will put a company at a disadvantage compared to their competition that are using all the tricks in the bag. Try installing the Ghostery plugin to open your eyes to what’s going on behind the scenes. Most startups’ websites have dozens of 3rd-party tracking pixels watching and capturing your every move to better understand who you are and what you’ll do next.

Having these tools at your fingertips is a prescient superpower for marketers, and it would be crippling to lose the ability. We as marketers are getting lazier as more and more data is becoming available to us. “Marketing Automation” is a real industry buzz word. How do we take the Siri-esque approach to advertising? We need to develop an artificial intelligence that communicates with customers as if what we’re saying is personal to each and every one and persuades them to hand over their monies without the brands having to do much work. The beauty is scale.

The answer is that we need to start changing now and unhook from the drug. We can’t wait for the laws to catch up. This will require a tidal wave of consumer scrutiny for companies to feel the pressure. Also, to quell the FOMO a consortium effort will incentivize companies to cooperate on a level playing field.

I like the way security expert Bruce Schneier compares today’s privacy issue to the environmental issue that is beginning to blow up in our generation’s faces.

Data is the pollution problem of the information age, and protecting privacy is the environmental challenge. Almost all computers produce personal information. It stays around, festering. How we deal with it—how we contain it and how we dispose of it—is central to the health of our information economy. Just as we look back today at the early decades of the industrial age and wonder how our ancestors could have ignored pollution in their rush to build an industrial world, our grandchildren will look back at us during these early decades of the information age and judge us on how we addressed the challenge of data collection and misuse.

Daehee Park

Written by Daehee Park who lives and works in Phoenix, Arizona building useful things. Get in touch via Twitter.