You Can't Spell Privacy Without Piracy

Got a call this morning from Rafael.  Nice kid.  He explained he worked for the New York Post and was calling to let me know they were scheduling home delivery in my neighborhood.  He then asked my name, and if I would be interested in signing up for this delivery option. 

I responded, "How did you get my number?"  

He answered, "I don't know."   

I said, "I can't consider your offer until I know how you got my number."

He sighed. "I got your number by doing my job.  I'm just doing my job, man." 

I replied derisively, "Do you know that by doing your job, you're calling a number that is registered on the do not call list? " Then I hung up the phone.  

Why was I so rude to a kid just doing his job?  I could easily have said "no thanks" as soon as I realized it was a telemarketing call.  Instead, I acted out the frustrations I felt upon learning my privacy was compromised -- and from knowing I can't do anything about it. 

Privacy is a word representing all of us in the court of humankind.   What is rightfully ours is for no others without our consent.  That's why little kids cry when forced to share their toys, and why adults don't dare open a letter or an email addressed to someone else.  The online advertising industry treats privacy like a word that can be redefined.  From day one, we snubbed consumers by placing our needs above theirs -- requiring them to opt out of our private data collection practices, versus inviting them to opt in to experience the unique benefits we can deliver (see the difference!).  

We cover our tracks on the wrong side of this issue with the cloak of "anonymous." Anonymous doesn't mean someone's privacy isn't breached.  If someone reads a letter addressed to me without my permission but my name is scrubbed off the document, my emotional self-worth still takes a hit. So would yours. 

We say we gather this data for "their own good."  Like in a salesman met shopping for a car on a Thursday showing up Friday morning in front of your local Starbucks kind of own good

We say how easy it is to opt out of our business tactics.  This is a bad joke I wish we would stop telling.  Opting out is never going to be easier than telling consumers that if they do nothing, their private data will not be collected.

We see ourselves as innovators -- and people find us creepy.  We forget clients are people, too, and their personal biases sway their business thinking.  Television spending soars disproportionately higher because clients love how their ads look on TV.  When clients look at online, they are shown more complex methods of consumer surveillance to target ads clients ironically will never see appear. 

We are failing as a medium.  The search revenue we count to inflate our success blinds us to these failures.  Our flaws are structural, and how we have handled the issue of privacy is one of them.

The IAB had a chance to correct this flaw. Instead, they made it worse by lobbying Congress to allow them to self-regulate and universally offer consumers the chance to "easily" opt out. The IAB should have been asking Congress for help in drafting universal protection so consumers could visit a Web site assuring them that no one is collecting their private data unless they opt in for that experience.  Imagine that. We would go from creepy to caring with one click. 

The downside to this opt-in approach would have been the decrease in the volume of data-driven, targeted impressions for sale.  That was the collective cry from third-party companies and dot-com publishing members the IAB represents.  The IAB got this wrong, too.  There is too much volume.  There would be fewer highly targeted impressions driven by opt-in collected data, and CPMs would rise -- changing our medium's perception to a premium value to advertisers instead of a bottom-feeding cesspool.   

This issue is black and white, so save your color on how opt-out is better for anyone but us.  As an industry, we have made it clear through our handling of privacy that our interests are above the interests of the consumer we are meant to serve.  That is a recipe for failure -- and I feel just as helpless telling you this now, as I did talking with Rafael.

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11 comments about "You Can't Spell Privacy Without Piracy".
  1. Paula Lynn from Who Else Unlimited , June 9, 2011 at 10:57 a.m.

    Ari, do you mean a recipe for failure for the industry, society as a whole or the means for us, the masses, the be controlled by the few?

  2. Rick Monihan from None , June 9, 2011 at 11:02 a.m.

    Great article, and I was on board until the whole government part.

    It's possible to self-regulate, if we don't want to be known as creepy. But we're more focused on making money and not worrying about the "creepy" factor. Making money, after all, is the key point of what we do. And finding a way to do it without having regulators who know little or nothing about our business looking over our shoulders would be preferential.

  3. Bruce May from Bizperity , June 9, 2011 at 11:34 a.m.

    I bet you are going to get a lot of pushback on this but frankly I agree with you. I have been continuously disappointed by the narrow view that most of our colleagues take on these issues. Self regulation didn't work out so well for the investment banks. Moreover, self regulation just doesn't work as the current situation clearly shows. A little, enlightened regulation could do the industry a lot of good. The IAB needs to work with Congress and not just fight for self-regulation. Without that collaboration we will just end up with over-regulation which is the self-fulfilling prophecy that comes when industry leaders take an ultra conservative approach and insist that they are the real experts and that government will only muck things up. I think you are absolutely right when you say that CPM’s would increase with less volume so that in the end, the net revenue to the industry as a whole would be at least the same if not better and we would get the benefit of a significantly improved reputation. Unfortunately I have little hope that it will happen.

  4. Andrew Boer from MovableMedia , June 9, 2011 at 11:41 a.m.

    Wait--the IAB doesn't really represent publishers...it represents the online advertising industry, and it has long been driven by ad networks and aggregators. Arguably, the IAB has acted in advertisers' interest (at least in the short term) by standardizing impressions -- and allowing the data driven, targeted impressions to commoditize content -- making advertising more efficient and prices lower.
    The unintended consequence was that this ultimately drove a decoupling of quality audiences from quality content -- which leads to content farms and driving quality publishers out of business.
    My point is you are blaming the fox for not guarding the henhouse... Folks like the OPA should have taken a much tougher stand on TACODA and the like when they had the chance -- but publishers thought they had enough power to control the networks. They had the chance to play the privacy card, but didn't because they thought they could use data targeting to their advantage. Publishers didn't realize Google was about to take their distribution advantages completely away from them, while enabling their competition.
    At any rate -- I'd argue that not one of these players (Publishers, Advertisers, Ad Networks) really gives a fig for consumer privacy. Privacy is just a card publishers now want to play now that they realize that data driven targeting has disrupted their business model.
    I don't think fighting the Privacy fight will work--Publishers are much more likely to have success by moving as quickly as possible to closed, walled environments like IPAD apps, and resisting html6, networks, and other standards that will commoditize the tablet world.

  5. Andrew Swank from Life is good , June 9, 2011 at 11:43 a.m.

    Awesome article. I have mixed feelings about the governmental regulation. I think it's a bar to commerce on the whole. I'm on board with Richard; self-regulation is preferential. However, it seems near-sighted to allow unapproved data collection as consumers wisen up about where their data is being collected and who is collecting it.

    Hopefully self-regulation will work out in the end. All it takes is one giant (a social media behemoth like Facebook or a commercial one like Amazon), to get the ball rolling in the right direction.

  6. Rob Goulet from Entertainment Sports Partners, Inc. , June 9, 2011 at 4:54 p.m.

    This is a great post. I would add that if you compare one's privacy rights to a monetary instrument or a currency, people would better stewards to protecting it.

  7. Ari Rosenberg from Performance Pricing, LLC , June 9, 2011 at 5:37 p.m.

    Thanks for all the feedback -- this "issue" kills me b/c I see it so black and white -- I hate how we handle it as an industry -- it's embarrassing actually.

    Andrew Swank -- you may be right -- if a big guy like Amazon switched to OPT IN others may follow but looking at Facebook -- they are unlikely to change their ways -- their opt out process is a joke

    Andrew Boer -- I totally agree with you -- that's great insight you have shared

    Rob Goulet -- that's a pretty cool notion -- people may care more if they new the real monetary value of their personal data

    Richard Monihan -- yes we are in business to make money and my point is that we would make MORE money over the long term if we were more legitimate in how we handled privacy

    Paula -- as always great to hear from you -- what I meant is that our handling of privacy as an industry is a recipe for failure

    OK -- thanks again for adding such great insight on the comment boards -- always appreciated.

    Ari

  8. Ari Rosenberg from Performance Pricing, LLC , June 9, 2011 at 9:27 p.m.

    Bruce May -- woops forgot to respond to you -- we're on the same page I just think you said it better than me -- and yeah I am losing hope too.

  9. Rick Monihan from None , June 10, 2011 at 10:45 a.m.

    Ari,
    I believe we would make more if we were more legitimate in how we handled privacy. The notion that "self regulation didn't work for the banks" is a canard. The banks were heavily regulated, but those regulations were not enforced. Finance didn't want enforcement and used the concept of "self regulation" as a cloak to hide what they were doing. In our industry, there is an altogether DIFFERENT situation brewing. We want to, and are trying to, avoid making mistakes, but we don't want to rely on outsiders to tell us how to do our business. There is a huge difference between regulating and enforcing and the one thing I see is that government intervention will not improve things. It will only act as more gum in the gears.

    In a related fashion, we are looking for "big projects" to push our economy out of the doldrums. But today, government regulations are so severe that pushing through a modern day Tappan Zee Bridge or Hoover Dam is nearly impossible. That is the kind of thing that will happen in our industry with government intervention. Innovation will seize up. Regulations may make life seem better - but when you don't want them anymore, they will only exist to make you miserable about how they were crafted and what they do. More importantly, since they come from the government - you can't do much to change them in the near term. With good, solid self-regulation, you can make changes when those changes make sense.

    We can do this on our own. We just have to be smart and careful. We have to be transparent and honest about how we are handling data. We have to allow people to "opt in" when it makes sense, or "opt out" when that is a better solution. Neither one, on its own, is going to work as a catch all.

  10. Rick Monihan from None , June 10, 2011 at 10:48 a.m.

    I might add that in a self-regulated environment, it's important to punish those who break the rules by not doing business with them.
    This, by far, is the hardest part of self-regulation. Some say it's impossible. But many banks were still doing business honestly and honorably even as the rest of the industry sank. They chose to not take part in the markets or instruments which led to massive problems.

    Since that industry was overseen by the government, who did the government turn to to "fix" things? The largest firms - the ones who (to a large degree) messed things up. It was assumed, quite wrongly, that size denoted "doing things right". This is how government regulation works. It is not pretty.

  11. Cece Forrester from tbd , June 10, 2011 at 6:31 p.m.

    Thank you, Ari. Not much more to say about your main point, which is: "placing our needs above theirs." Seth Godin recently re-explained it on his blog. Guess it is a difficult idea for some to understand.

    But please realize these same politicians you hope will help put the consumer's privacy first have exempted themselves from the Do Not Call law and claim it's because of free speech. Oh really? Just like anyone else, they can speak freely all they want, just not in my home and on the phone I (not they) pay for and own and might be wanting to use for my own purposes when they decide to commandeer it. But they believe they and their agenda are so important it trumps my privacy. And that is the sort of person I should want to allow to make the laws? Well, I can have a policy too. It is: If you want my vote, you'd better NOT call my number.