• by Jeremy Tillman , December 27, 2018

The world has become entrenched in a litany of privacy-related issues that managed to turn social media into a cyber-weapon for political divide, put tech corporations in the crosshairs of reform, and left individuals feeling vulnerable and exposed. 

While we basked in a technology revolution led by Google and Facebook that offered heady promises of personalization and convenience, a hidden threat has silently pervaded nearly every aspect of our daily lives. The modern world is connected to an internet that tracks and records our most private moments and harvests them for billions of dollars of corporate profit, the largest unseen transfer of wealth in the modern world.

In return, our increasingly digital lives are burdened with endless news feeds and countless ads in a modern addiction that we struggle to satisfy. 

How did we arrive here, and how do we make it better?

Surveillance Capitalism

To understand today’s internet, we must first understand online advertising. As internet users, we have access to uncountable websites, apps, and services for free because they are all financially supported by digital ads. It’s not hyperbole to state that online advertising is the lifeblood of the digital economy, generating billions in review, per IAB, for ad-supported businesses.

If you run an ad-supported business, you have two ways to make more money: First, show more ads. Second, increase the effectiveness of ads. That’s why Facebook prompts you with push notifications when you receive a like and why its Newsfeed is infinite. The company wants you to spend as much time as possibly scrolling through its ads.

To make ads more effective, ad-serving companies collect data to more precisely personalize and target ads to drive higher conversions. Google’s products do this with ruthless efficiency, building a detailed profile that powers ad personalization and targeting across its vast ad network.  

In 2017, Google made $95B and Facebook made $40B in ad revenue and they did it with product ecosystems that collect obscene amounts of user data and serve billions of personalized ads. Google and Facebook have not only pioneered surveillance capitalism, but have provided this blueprint for other companies — and the technology to harvest their personal data in exchange for so-called free products.  

In the wake of high-profile data scandals and mounting user anxiety, there is an increasing demand for privacy-friendly alternatives to the ad-supported internet, where transactions between users and companies are straightforward and the costs are understood.

Such models would not only better preserve user privacy, but they would also result in better products and services. They incentivize companies to provide greater direct value to users, while deemphasizing so-called dark patterns – sketchy tactics meant to trick users into sharing personal data or reinforce technology addictions.

The common currency of the web shouldn’t be attention or impressions, but engagement and enrichment. There are many models out there looking to do this, including micropayment systems and ad and tracker-free subscriptions.

Publishers, partly in response to Facebook’s and Google’s ad dominance, are already seeing a resurgence in, and renewed focus on, paid subscriptions. While none are dominant yet, trends suggest there will be profitable alternatives to advertising in five-to-10 years, and the internet will be the better for it.

There will also be disruptive new technologies that can completely reshape the internet and the business models that support it.

These new options might include databanks, where individuals can deposit and withdraw their own data and possibly auction it off to the highest bidder. There may even be technologies and platforms that create walled gardens that keep ad-supported services out and create space for other models to take root and flourish.

Technologies like these can simultaneously help individuals capture more of the wealth they create online, while providing greater diversity in the business models that drive our digital economy.  

Ultimately, consumers will determine this debate; they vote with clicks and wallets. People are increasingly concerned about privacy and are starting to cut back on the amount of time spent on Facebook and other ad-supported platforms.

This type of ad-avoidance behavior is starting to directly impact these companies’ bottom lines, which in turn, reduces their financial incentive to maintain the status quo. It forces them to reconsider their business models.

Whether these companies find a way to make money without ads and data, others will — and our interconnected lives will be all the better for it.