Making A Living On The Privacy Fault Line

One summer when I was home from college, I earned money by knocking on the front doors of houses with concrete curbs.  I would ask whoever answered if they would like their house number painted on their bare curb, "so your house will be more easily spotted in case of any emergencies."

Ten minutes later, those who said yes paid me five bucks after approving my work.  Not everyone was home or said yes -- but back then, painting the front curb of 10 houses in an afternoon covered my troubles that evening.

Now imagine if I were paid directly by a company like Target, for example - who, in return, received information about the shopping habits of residents living in the homes whose curbs were painted.  Imagine further that local police and fire departments afforded me the right to paint these curbs without obtaining the homeowner's permission.  The only houses skipped would be owners who contacted the authorities to have their home added to a "do-not-paint list." 

In this imagined scenario, more homeowners would receive a beneficial service for free, the police and fire departments would find homes in need faster, and I would earn more money.  This is the win-win-win argument suffocating the loss of consumer privacy online.  You can't wake up tomorrow and trim your neighbor's tree and sell the clippings -- even if it increases the value of their home -- without their permission.  Chopping away until your neighbor tells you to stop would literally break a law.

As an industry, we are trespassing every time data collected without consent drives an impression sold.   Even worse, the industry's governing bodies -- made up of members who either paint curbs or sell paint -- are intentionally misinterpreting consumer non-action as consent.

Consumers wake up every morning wanting more rights in life, not less.  This includes the right to choose to allow companies to monitor their private behavior as opposed to having to tell them not to.   This difference between opt-in versus opt-out appears subtle, but is instead seismic, creating a fault line in the online industry.  If the data collection practice were to change from opt-out to opt-in, many of us want to believe the entire industry would perish.  This scare tactic is working -- but lost in this rhetoric industry members cling to to grow their fortunes, is that opt-out does irreparable harm to the value of online advertising.  To see how, let's kick it back to the curb.

When paid by homeowners, I had an incentive to produce high-quality work.  I was not paid unless the owner approved the finished product.  This arrangement produced impeccably painted numbers for neighbors to see when evaluating the opportunity.  If paid by a third-party entity, the incentive for quality washes away.  I would get paid as long as I completed the job, so the less time each house took, the more money I would make. 

Opt-out data collection provides a deterrent for publishers to invest in the quality of their content, because they can still make money selling ads regardless. That's why you find sites that should embarrass our publishing souls running ads for advertisers with blue-chip brands.  The fewer ad dollars spent on quality content sites, the less investment made in content quality.  With less quality to look at, advertisers increase their focus on performance metrics, which drives prices down even further.

We can debate my thesis, but you can't disagree that changing to opt-in is the best way to protect the rights of consumers.  The folks leaving the biggest footprints in our industry must see this -- yet they will continue to ignore what they see, in order to fund bigger homes for themselves by kicking the rights of consumers to the curb. 

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8 comments about "Making A Living On The Privacy Fault Line".
  1. Jon Levy from Hype Circle , September 29, 2011 at 1:27 p.m.

    This is a great argument for "Opt In" vs "Opt out". Unfortunately, after 15 years, there is still a Frontier "anything goes" mentality about how to make money on the internet that seems to have no real regard for our privacy.

    Personally, I would gladly Opt in. I like getting ads that are somewhat relevant. On the other hand, analyzing my web surfing habits and then offering me ads that might fit my needs is no less creepy that having a private detective follow me to the mall, watch which shop windows I look into, then walk up and offer me a new pair of Levi's (in my exact size).

    Of course, they might argue that there's nothing wrong with that, because they didn't have my real name.....

  2. Ari Rosenberg from Performance Pricing, LLC , September 29, 2011 at 1:31 p.m.

    @JonLevy -- haha that made me laugh but yet a great point -- but here is the thing -- it's a CHOICE you make -- and currently we are making the choice for users who visit sites and that is so wrong -- thanks for chiming in...

  3. Frank Watson from Kangamurra Media , September 29, 2011 at 1:36 p.m.

    when a person walks in to a store they can be bombarded with sales pitching people, their movement tracked with cameras etc - when we visit a site we can experience the same

  4. Ari Rosenberg from Performance Pricing, LLC , September 29, 2011 at 1:42 p.m.

    @Frank Watson -- OK Frank I see your point -- are these recordings analyzed, sold and/or used for re-marketing purposes all without our consent? Does Home Depot for example look at a tape of me shopping in their aisles, and then send me a direct mail piece promoting the paint I picked up and did not buy?

  5. Paula Lynn from Who Else Unlimited , September 29, 2011 at 3:13 p.m.

    1. The quality: Why one needs to watch contractors, their sub-contractors and their subs like a hawk. Delusion is a powerful thing. 2. Unless you give the store your personal info or they have some kind of facial recognition equipment, then they're watching you in and around the store isn't the same thing as sniffing all your info on line. 3. The same reasons to limit postings on FB. It's nobody's business how much money you spend on what when you keep telling them all your life's details. If you can afford X, then you can afford Y - and that's just from friends and so called friends. From those who want to influence you to spend your income - BAM!

  6. R.J. Lewis from e-Healthcare Solutions, LLC , September 29, 2011 at 4:46 p.m.

    Ari,

    As always, an interesting lesson told through a simple story. I think you can take this analogy further though... Who owns the curb? In my town the township does, and so the example of being paid by the fire department or police makes sense (if they had any budget to do it)... but they don't, and isn't that the whole public policy debate that's been raging for years (should the government do this or let private enterprise, entrepreneurs and the ensuring competition deliver a great result).

    Additionally, I think every now and they a disruption comes along that is so great, it must disrupt not just one business or industry, but much of the way we think about life. In your analogy, who owns the tree? Traditional thinking would say your neighbor... but do he really? The tree is part of nature. As we look at things like patents today and copyrights, aren't we starting to question some of the concepts around "ownership" (and perhaps rightfully so)? The Indians before we got here, didn't believe in "land ownership" the way that we do. I don't think they would agree with you, and who's to say they aren't right?

    While there is no doubt that we as a society will have to go through some painful and even offensive and egregious violations of how we define our "privacy" today, I think we also have to realize that we are still very early on in this disruptive technology, and we have to be careful to not blow things out of proportion. Market forces are a powerful thing and if someone strikes a strong enough nerve with the consumer - they won't have a business for very long. Regulation as a heavy fist stifles innovation. And free markets will push the limits until the point they get burned... but I believe we're still in the process of figuring out where that point is. One of the interesting things I find is to look at "expectations" for privacy across generations... GenY (and younger) have very different expectations than I grew up with... they expect almost everything (especially information, news, content, etc... to be completely free all the time), are they willing to settle for a tradeoff that perhaps you and I are not? Are you and I becoming too old school?

  7. Ari Rosenberg from Performance Pricing, LLC , September 29, 2011 at 9:46 p.m.

    @RJ Lewis -- I always enjoy your thoughtful responses but on this one I call BULLSHIT -- not to your thinking -- but rather your over thinking. These are the types of questions that steer the conversation away from the simple issue at hand -- if there is any doubt to how we are handling consumer privacy -- and you must admit to that -- then we should err on the side of the consumer by giving them a choice to opt in for the benefits that come with data collection. Where we are wrong regardless of who owns the tree or the curb, is that we are making the choice for the consumer instead of letting them choose.

  8. Tony Anderson from SF Ad Guy , September 30, 2011 at 12:20 p.m.

    Good one Ari!