This sturm und drang has been ongoing for decades, and it is, maintains David Schwartz, founder of Radius Marketing, completely natural. “How many times have you gone home from a commute, left your office after interacting with tons of people, and have no idea what you just did?” he asks. “Your mind is good at canceling out what is not germane to your life.” That tendency might explain why many people don’t even see banner ads on websites. They just see what they want to see: the news story they want to read, the video they want to view, the information they need to get the job done. It’s a form of selective vision, a way of filtering information when the senses are overloaded. Schwartz believes this dynamic is part of an evolutionary process. Advertisers advance the science of advertising, discovering all manner of ways of reaching us, then consumers become expert at shedding messages they don’t want to hear. In essence, it’s a media version of an arms race.
First, advertisers broadcast TV commercials considerably louder than the shows they interrupted, but the mute button circumvented that ploy. Then the networks added commercial time to television programs, up from three minutes per half hour sitcom (and six minutes per hour) in the 1960s to eight minutes per half hour today. When the commercials were bunched at the ends of shows, consumers used their remotes to surf to other channels, so broadcasters started to run shows right into one another in the hopes of holding on to their lead-ins. Viewers got TiVo and digital video recorders and began fast-forwarding through shows. Marketers responded by making TV commercials more engaging, the kind that make viewers stick around. So far it’s been working, according to some recent studies, which found that TV watchers were less likely to hit the fast-forward button if a commercial appealed to them within the few sentences, and if it touched them emotionally. In other words, the ad has to offer a value proposition.
The battle has moved into different media. Marketers littered cyberspace with pop-up ads. Web-savvy consumers responded by learning to use pop-up ad blockers on their browsers. Radio stations packed more commercials into each hour of programming, and as playlists on commercial radio grew mind-numbingly repetitive, listeners migrated to iPods or satellite radio. Sleazy marketers turned to spam. Internet service providers deployed spam blockers—catching billions of spam messages in their nets every day—while consumers tweaked their own email filters.
Today’s buzzword is “engagement.” Give people a reason to interact with ads and promotions on TV, or to click on or download them via the Web. “Anything that causes the audience to be grateful for entertainment means they are more likely to pass it on,” says Colby Atwood, a newspaper analyst and a president of Borrell Associates. “Everyone likes to be the one to share something interesting with their circle of friends.” This value exchange isn’t limited to providing cheap entertainment thrills. Because creating a connection with a product takes a commitment, what people really want is for marketers to reach them at the moment they are ready to buy something and leave them alone the rest of the time. Think of it as the consumers’ version of the just-in-time delivery supply chain deployed by the tech, retail, and manufacturing sectors. Done right, it’s a tremendous business opportunity, as Google showed with keyword search ads. In fact, an entire industry has popped up around the concept: behavioral marketing, which amassed $2 billion a year in spending by 2009.
[ THE PRIVACY SHIBBOLETH ]
People devote only 5 percent of their time online on search engines. The rest is spent on social networks and browsing other sites. If marketers could follow us without actually eavesdropping, they would be able to compile comprehensive dossiers based on the types of sites we visit, the things we read, the videos we watch, the products we shop for. It sounds spooky, of course, and people claim they do care about the lack of privacy. A UPI-Zogby International poll from 2007 found that 85 percent of respondents claimed privacy of their personal information was important to them as consumers, and 91 percent said they were worried about identity theft. In another UPI-Zogby poll, 50 percent of participants expressed concern over the privacy of their medical records. Most, however, aren’t concerned enough to do anything about it.
If privacy is, as Supreme Court Justice Louis Brandeis proposed eighty years ago, “the right to be left alone—the most comprehensive of rights and the right most valued by civilized men,” which he included as part of a set of conditions “favorable to the pursuit of happiness” laid down by the Founding Fathers in the Constitution, how would he view our current surveillance society? Over the course of a day the typical American is caught on camera two hundred times: at traffic lights, paying highway tolls, walking the dogs, taking money from ATMs, shopping in convenience stores, and a tiny fraction are caught committing crimes. Within a twenty-block radius of New York University, there are more than five hundred surveillance cameras, which catch students and professors doing everything from buying a falafel, racing past the iconic fountain in Washington Square Park on the way to class, or purchasing allergy medicine like Claritin-D, for which they are required by law to show their driver’s licenses because it contains a common substance used in meth.
It’s not just New York’s Greenwich Village, where NYU is located, with its own 24–7 reality show starring…everybody. Dozens of states have set up traffic light cameras that ticket drivers for running red lights or speeding. Casinos in Las Vegas zoom in on players’ hands at the blackjack table. Cameras are mounted on police cars, they hang from trees in public parks, they’re affixed to the walls in sports stadiums and shopping malls. David Brin, author of The Transparent Society, postulates a “Moore’s law of cameras.” He sees them roughly “halving in size, and doubling in acuity and movement capability and sheer numbers, every year or two.” Look out a decade and nano-cameras as small as grains of sand may create a world in which the wind has eyes.
If privacy is “the state of being free from unsanctioned intrusion,” which is the American Heritage Dictionary definition, what about the Department of Motor Vehicles, famous for peddling personal information to anyone who will buy it? Or the credit-rating agencies like TransUnion, Equifax, and Experian, which profit by selling access to our financial histories? Or the most brazen of all, the government, which stiff-armed companies such as AT&T to record our phone calls and sniff our email, all in the name of fighting terrorism? Or if “privacy is the power to selectively reveal oneself to the world,” a view tendered in the essay “A Cypherpunk’s Manifesto,” what’s the deal with Gmail, which keeps carbon copies of all our email correspondence forever, so Google can barrage us with more ads? Or American Express, which collects the details of billions of customer transactions, weaves them into models of behavior, and sells this data to junk mailers of all stripes and sizes?
The truth is, the battle over privacy (no matter how it is defined) has already been lost. As Sun CEO Scott McNealy infamously put it, “You have no privacy. Get over it.” Since we consumers have been complicit in this postprivacy smack-down, however, it’s not necessarily bad either. In fact, it could be good, and not just for the corporations that profit from it or the government that taps into it to control its citizenry.
“Information wants to be free” is the hacker’s credo. In reality, information has a price in the form of convenience, cash, or security. It’s why we shop with credit cards, even though they lead to mailbox-cramming junk mail, and sign up for loyalty cards with Barnes & Noble or CVS’s ExtraCare program, which has enrolled tens of millions of Americans who receive 2 percent back on every purchase and an additional dollar for every two prescriptions they fill in exchange for tracking every purchase. It’s the reason we use cell phones when we are out of the office, global positioning services (GPS) when we are on the road, and OnStar for the few who buy GM cars, all of which can pinpoint our location. We still surf the Web, despite our Internet service provider (ISP) knowing what sites we visit and how long we stay, and search with Google, which maintains lists of all the terms we’ve queried. Remember that late-night tequila binge and that cur
iously odd sexual…never mind. None of these are spy technologies, but they might as well be.
Donald Kerr, principal deputy director of national intelligence, said in a speech in October 2007 that Americans would have to change their view of privacy, which “no longer can mean anonymity,” he said. “Instead, it should mean that government and businesses properly safeguard people’s private communications and financial information.” He added, “Protecting anonymity isn’t a fight that can be won,” which is creepy coming from one of our nation’s top spies. No surprise that the blogosphere squealed. After all, a staggering 127 million sensitive electronic and paper records were lost or pierced by hackers last year, while identity theft runs rampant, affecting one in eight Americans (and growing every year). The idea of the government safeguarding our information is laughable. Naturally, we can blame technology and the greater interconnectedness of our world, since it replicates our personal information and spews it far and wide in cyberspace, stashing it in far-flung databases outside of our control. We don’t just have Big Brother to contend with, we have a series of little brothers—your Googles, DoubleClicks, and ISPs, the credit-rating agencies, social networks like MySpace and Facebook, and marketers who want to know everything about you. With advanced data-sifting techniques, the rise of massive databases and the permanence of the Web, once your information is out there it can never be taken back, our deepest, darkest secrets instantly available to anyone with the desire and know-how to learn them.
If Eric Schmidt, CEO of Google, can’t keep secret his home address, the value of his house, date of birth, net worth, value of Google stock, hobbies, quotes he’d just as soon take back (like “Evil is what Sergey says is evil”), what chance do the rest of us have? With Google Earth it’s even possible to view his home and property. (It’s amazing what $3 million will get you.) If you recall, in 2005 Google briefly blacklisted CNET because a reporter Googled Schmidt, then published what she found (things like he wandered the desert at Burning Man and earned $140 million dumping Google stock). The company didn’t like the fact that CNET published the Google CEO’s private information, which the reporter found using the company’s own product.
It’s easy to find people to gripe about privacy, laying blame at the feet of big business and big government, but what to do about it? Talk to the privacy hawks at the Electronic Privacy Information Center and they’ll tell you what the problem is, decrying the actions of the credit agencies, Google, and the government, but not how to fix things, other than to offer consumers bromides like “pay with cash where possible,” “don’t share any personal information with businesses unless it is absolutely necessary,” and “choose supermarkets that don’t use loyalty cards.” But companies have a powerful profit motive. Our information, the more personal the better, is worth billions. The better they know us, our likes and dislikes, the easier it is for them to induce us to buy buy buy and the more money they’ll make. The only way to keep our personal information personal is to unplug from the grid: pay with cash, don’t surf the Web from home or your job, don’t go out in public without a mask, don’t drive a car, don’t maintain a checking or savings account, don’t use a cell phone or PDA, and under no circumstances take out a mortgage. Good luck.
Yet this doesn’t mean we are heading toward some William Gibsonesque techno-dystopia. Since we can’t parry the privacy hounds, we need to embrace the idea of a more transparent world. Realize for all the brouhaha surrounding the issue, there’s little tangible harm that arises from your personal information being used to target more relevant advertising at you. Google knows you have a taste for mud wrestling or midget tossing? So what? They’re not talking, unless the government subpoenas them. Facebook told your friends you rented a slasher flick from Blockbuster? They might simply ask, which one? Yahoo has proof you’ve been using webmail to conduct a hot, tawdry affair? Yahoo is the least of your worries.
Looking on the bright side, the wide dissemination of our personal information—that’s the unintended by-product of social networks—could lead to a more tolerant, less judgmental society. Because shame is largely generational. If you are in your forties or older, your parents didn’t talk about their feelings; today you can barely stop people from telling you their life stories. And today’s youth, congregating on social networks, share the most intimate aspects of their lives, hewing to an ethos of karmic bulimia. If they don’t announce something on Facebook it’s, like, it never happened. And they are shaping the privacy debate as profoundly as the corporations that mine our data, the banks that sell it, the credit agencies that profit from it, and the government that vacuums it up.
Because what is blackmail but information arbitrage: exploiting differences in markets for financial gain. Being divorced reflected poorly on a woman fifty years ago and affected her job status. If you went into rehab, you were shunned in some circles. If you came out of the closet as a homosexual, you might have ended up a pariah. In 1975, Oliver Sipple became a hero for helping prevent an assassination attempt on President Gerald Ford. In the ensuing media coverage, he was outed as being gay, a secret he had been desperate to keep, and his mother disowned him, he was ridiculed publicly and privately, and moved to sue seven different papers for breach of privacy. Can you imagine that happening today?
Part of the cultural change over the past three decades is due to the emergence of media as a daily part of our lives, spreading information on how our politicians, athletes, celebrities, friends, and neighbors live their lives, often focusing on their foibles (which are usually deemed more newsworthy). Now this process of tolerance is sped up exponentially as we become even more interconnected, because we are all vulnerable to having our secrets shared and there is little point in pretending to be holier than thou. As people spend more and more time online, their lives become broadcast fodder. Of course, identity theft is a real threat, but it’s not the information that commits the crime. The credit card companies and banks cover most of your losses (passing it on to the merchants). It can be a headache to clean up the mess but usually not disastrous. Because banks and credit card companies have a vested interest in preventing fraud, identity theft victims have powerful allies (that profit motive again). Among the ironies here, of course, is that these measures were put in place to protect the public and there are those who feel safer because of them.
It’s easy to cry about the loss of our privacy, but what can we do about it realistically? Boycott Google and other search engines? Won’t happen. Stop using credit cards and opening bank accounts? Get real. Protest stores and businesses that install surveillance cameras? Fat chance. And you weren’t expecting the government to step in, were you? On that bright side, the loss of privacy could mean the opportunity to build a better society.
[ TIME, NOT CLICKS: THE NEW AD UNIT ]
What does all this have to do with finding a new ad unit for social networking? Plenty, if you talk to Andy Monfriend, founder and CEO of Lotame, a social media advertising and marketing firm. He believes he has already found the Holy Grail. It’s not based on cost or price per click, as with banner ads. It’s time, as in how long a user interacts with a certain ad. Here’s how it works: A social network that deploys Lotame’s flagship product, Crowd Control, would furnish a user’s age, gender, and zip code. It is barebones data, not personally identifiable information that could be used to find out a person’s true identity. Lotame then dispatches a cookie, which is a piece of software that can track movements online, to the user’s machine and notes his online behavior. If a client, say, Clinique, wants to target women in their twenties and thirties who have either blogged, uploaded, rated, or shared content that indicates they are looking for beauty tips, Lotame can reach a million of them across twenty or more different sites.
First, Monfried looks for “influencers”—in Malcolm Gladwell parlance, “connectors”—people who affect the buying habits of others. Social media, he points out, has no content. It is solely the by-product of users. But what are the ma
rkers or identifiers that are critical for brand advertisers? It’s not what they write, it’s what they do. “There are ways consumers use the platforms,” Monfried says. “They email, they blog, they comment, they post, they share, they link, they upload, they friend, they stream, they write on a wall, they update a profile. There are one hundred and sixty verbs that we currently track that become a huge identifier.” Lotame identifies the influencers—those who add, join, upload, blog, or post—cross-references these actions with entertainment, health, fitness, beauty, then overlays all that with women eighteen to thirty-four. Suddenly you have a robust way of targeting. You can even limit your target to people who have uploaded videos in the last two days or who purchased makeup online in the past week. Lotame then sells an advertiser a block of time (say, four minutes) spent interacting with an advertisement over a certain period (forty-five days), covering a specific number of women (two million) that represent a demographic (aged twenty-four to thirty-five). It brings a level of granularity never before seen in marketing.
For example, Lotame ran a promotion for a new chick flick. An advertiser retained Monfried to reach 1 million American women aged fourteen to twenty-four who in the last twenty-four hours had uploaded, blogged, raided, shared, or commented on entertainment content. The advertiser bought four minutes per user over a three-week period with the understanding that the clock would freeze whenever the user stopped interacting with the ad, which in this case was a trailer for the movie. First, Lotame identified the influencers and targeted the trailer at them. A few thousand of them embedded the video in their social network profiles or blogs. Then Lotame tracked the visitors, the legions of friends and acquaintances who swung by and viewed the trailer. Every person who fit the demographic profile was tallied and timed. Meanwhile the video spread virally since a certain percentage of those who saw it on their friends’ sites decided to embed the video themselves, which spread it further. Others were commenting on the trailer, telling their friends or blogging about it. All of this counted as ticks against the clock. The result: a click-through rate as high as 0.63, which is thirty-one times greater than the average rate on social networks, and it cost far less than a traditional banner ad approach to reach 1 million women.
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