Saturday, 31 July 2010, the WSJ published an investigative piece titled "The Web's new 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 multiple links (please see at the bottom of this article) and marks a defining moment for the advertising industry.
A few highlights:
"The study found that the nation's 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning. A dozen sites each installed more than a hundred. The nonprofit Wikipedia installed none."
"Tracking technology is getting smarter and more intrusive. Monitoring used to be limited mainly to "cookie" files that record websites people visit. But the Journal found new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions. Some tools surreptitiously re-spawn themselves even after users try to delete them."
"Tracking isn't new. But the technology is growing so powerful and ubiquitous that even some of America's biggest sites say they were unaware, until informed by the Journal, that they were installing intrusive files on visitors' computers."
"The problem, say some industry veterans, is that so much consumer data is now up for sale, and there are no legal limits on how that data can be used.
Until recently, targeting consumers by health or financial status was considered off-limits by many large Internet ad companies. Now, some aim to take targeting to a new level by tapping online social networks."
"There are applications of this technology that can be very powerful," says Tom Phillips, CEO of Media6Degrees. "Who knows how far we'd take it?"
This is a big deal. Sure, anyone visiting iMediaconnection and working in the advertising industry is very familiar with this topic. But the vast majority of non-advertising people weren't aware of the depth of tracking. It's a big deal because it's the Wall Street Journal. The didn't call BT by its name, they call it spying. This will stick with readers for a long time to come. And, as indicated in the subtitle, the WSJ will continue to investigate and write about Behavioral Targeting. This is just the beginning.
It's also the beginning because politicians will get involved. For the longest time, the behavioral targeting industry worked without any real regulations. This era will end very quickly. More importantly, people will start to revolt. Because the value is created on their back for the benefit of third parties. And, the sad truth is, that the value all this tracking and targeting delivers is questionable. Very questionable.
You can track every site I visited this month, every word I read, every image I saw, every music I listened to, every human interaction I had, everything I consumed - you still don't have the slightest idea what I want at this point. Or tomorrow. It still is guesswork, maybe sophisticated guesswork. But guesswork, nonetheless. Unfortunately for advertisers, this guesswork includes now a backlash because we didn't ask for permission and treated people as data sets. And not as people.
What the advertising industry has to do now
- Targeting is fine as long as the user is aware of its implications and has the opportunity to opt-in to get more relevant messages. We have to get out of the opt-out mechanism (that involves a lot of work from the user, diminishing trust between them and brands even more) and transform the whole BT industry into an opt-in system.
- Advertisers have to work closely with the legislature to develop systems that add value to each stakeholder of the advertising system.
- We have to start thinking about transforming the advertising food chain from a supply-driven to a demand-driven industry. Doc Searls writes brilliantly about the move from CRM (driven by companies) to VRM (driven by consumers). Develop tools that help people express their demand and connect them on their terms directly with companies to fulfill that demand.
- Let's collaborate and co-create with all stakeholders to develop a new advertising ecosystem. One that doesn't need to spy on people. One that doesn't need to trick people by secretly placing tracking software on people's computer. One that doesn't benefit just a few.
In the WSJ article, Tom Phillips, CEO of Media6Degrees, asks: "Who knows how far we'd take it?" I would argue, we have taken it too far.
More links to other sections of the WSJ report:
Omar Tawkol says: We need to be more open about tracking.
Michael Learmonth writes about "The pants that stalked me on the Web."
The FTC Chairman discusses a "Do Not Track" List
Jeff Jarvis' response
Update: WSJ's write-up about X+1