Archives for posts with tag: Privacy

The age of digital enlightenment

April 27, 2012 //

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The early stages of the digital revolution was led by programmers and computer scientists. One of the most important outcome of the last years was replacing the need for privacy with the need for visibility. While this exchange has many benefits, it doesn’t help people to develop original thoughts.

I’m not handwringing or whining about this outcome, but I believe we’ve gone too far. The visibility and connectivity bubble is about to deflate and we’re about to enter the age of digital enlightenment. Programmers and computer scientists will continue to be an important force in the digital revolution; leadership will come from thinkers, intellectuals, artists and storytellers. These people are driven by an emerging vision that’s much more individualistic, centered around humanity, intimacy and, yes, feelings instead of connecting the world into a data-driven monster.

Sharing has become a robot-like behavior

More and more people retweet links without even reading them. Check-ins on Foursquare have become bot-like behavior, Facebook should change its brand color to pink: it’s a unicorn world. Meaningful conversations are uncommon on any of our favorite platforms. The whole idea of conversations has turned into a huge echo chamber, filled with people backslapping each other: You think like us and you’ll be part of us.

The Web will gain in importance over time: Our kids will live on it, learn from it, get most of their information from it. I’m not interested to see our future grow up in a virtual echo chamber where being more equal than anybody else is being rewarded.

The mindful Web

There’s a reason why people need to take a sabbatical from the web. It’s exhausting to exist in the echo chamber, being reactive and celebratory. Once in a while we need to take some time to think.

Who said it has to be that way? Shouldn’t we design technology that makes us much smarter, supports constructive dialogue, filled with quality content and intimacy? Less immediate gamification gratification, more different points of views.

We see the beginnings of this new age: Brainpickings, Cowbird, Twenty@. We’ll see if any of these will pan out but as long as we’re trending towards a more balanced digital world, we’re going to continue to see brighter lights. A digital world that teaches us, just like we learned to respond. And marketers, as the Zeitgeist amplifiers, will play their part by intensifying the new habits and behaviors.


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The user data bubble

February 16, 2012 //

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“(In the publishing business) the readers are the product, and the customers are the advertisers.” – Dave Winer

It started with Path last week, and now we learned that Facebook, Twitter, Foursquare, Instagram, Foodspotting, Yelp, and Gowalla all either upload your contacts’ phone numbers or email addresses to their servers for matching purposes.

As the post on Venturebeat states:

“Some of these applications perform this action without first requesting permission or informing you how long they plan to store this data. Foodspotting is the worst of the bunch, as it appears to transmit your data over an unencrypted HTTP connection (in plain text), making it even easier for mischievous parties to intercept.”

It’s a sign of a major problem.

Tulip Mania. Railway Mania. Poseidon Bubble. Japanese asset price bubble. Dot-com bubble. Rice bubble. Housing bubble. Bubbles after bubbles. After the housing bubble, one would think we’d have enough of bubbles for a long time to come. Think again.

The dot-com crash had nothing to do with technology. It had everything to do with the business model used to pay for the technology, which was primarily either display advertising revenue or VC money advanced with the expectations of returns based on display advertising. Display Advertising was trackable, it would be more effective online than offline. The bubble burst, crazy valuations went away and the digital ad market boomed. Ad Networks, DSP’s and exchanged drove down the value of ad impressions. CPM’s went from $100 for premier placements to $10. And impression junk was and is still anywhere. Suddenly, new businesses that relied on advertising revenue to support their model had to pivot.

Welcome to the age of user data.

Massive assumptions are now being made based on revenue generated (or soon to be generated) by personally targeted advertising drawing on user data. Facebook has a business model but their valuation is based on future realization of user data. Twitter doesn’t have a sustainable business model yet but it’s worth billions of dollars.

Often, companies don’t even know what to do with this data, they just have it because one day it will rain gold. You can’t open your computer without reading of the promises of Big Data. Your user data, goes the theory, allows ads to be specifically targeted to you. Should you buy a big bag of dog food, you will likely receive more ads for dog products, sometimes coupons. You’ll be grouped in a segment with other “dog food buyers”, your age and location will be determined, and a data model of you will be developed. A very simplistic one-dimensional model of you is living in some data warehouse and that’s why you encounter all those online ads.

The problem is not with the use of data to make decisions – the problem is with the simplistic one-dimensional use of data to make decisions. And the other problem with this assumption is that it believes in the rational consumers. Targeted advertising draws on the idea of our observed behavior presenting a coherent and realistic picture of our desires and needs.

It doesn’t.

My spending behavior in 2010 bears no relation to my spending currently or in the future – economies change, circumstances change, tastes change, opportunities change. More importantly, we are social beings, not rational beings. We are more driven by emotions and our clique than anything you can find in our brains.

As we know, targeting works on a limited scale. It does lift metrics, it improves performance. But the user data dream that one day all served ads will be relevant and lead to immediate conversion is just that: a dream. I’m not trying to minimize the opportunities at the intersection of data and human behavior, as explained in “How companies learn your secrets.” from the NY Times. I just don’t believe the way to collect and use data right now will lead to a pot of gold.

Tulips have value. Houses have value. Data has value. But the value is not as high as people tend to estimate while the user data bubble is expanding. It’s highly questionable if even a small part of these valuations can be realized. At least, I haven’t see any evidence of that, yet.

Nobody wants to hear things like that, when everybody is enjoying the user data ride. Just like nobody wanted to listen to Nouriel Roubini when he predicted the financial crisis. Nassim Taleb the “Black Swan”. Or Dave Winer the end of the data bubble. But something is wrong here, very wrong.

VCs spend billions of dollars investing in companies based on the user data model. They even tell kids to leave college early to participate in the gold rush. “You can be the next Mark Zuckerberg.”

They fund companies that need our personal data to succeed, just like the mortgage bundlers needed the junk mortgages to create fictitious AAA ratings. One day, when reality sets in and the fundamentals don’t add up anymore, the bubble will burst. A lot of money will be lost. A lot of people will be hurt.

Out of the ashes, new companies will spring up that have realistic expectations about the value of user data. And, who knows, even give us control over the data. Now, that’s valuable. Correct, Doc Searls?


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The state of Social Commerce

August 1, 2011 //
Social Commerce (July 2011)

A few highlights:
  • F-Commerce is real. Some predict that 10-15% of total customer spending will be funneled through social sites in the next five years.
  • Some brands placed their whole store on Facebook but most brands are dipping a toe into F-commerce with limited time or limited-edition sales.
  • F-Commerce might take off quickly for “high-consideration goods” (Electronics, Sporting Goods and Baby Gear).
  • Common Facebook privacy concerns might throttle growth.
  • Overlaying the social graph on e-commerce is an emerging trend.
  • Hyper-personalization based on social expressions is a desirable feature.
  • Brands have to walk a fine line between refining the experience to be even more relevant at the same time ensuring consumers feel their information is safe and secure.
  • Retailers are beginning to overlay the social graph at brick-and-mortar locations.

Explore the presentation and the in-depth report. Well worth your time.

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The privacy discussion gets us nowhere. The ROI discussion will.

November 11, 2010 //

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Listened to an interesting discussion last night at the Monaco Media Forum, featuring Alain Lévy, CEO of Weborama (France). Especially interesting since we tend to be too US-centric when discussing privacy issues and how data should be utilized.

A few thoughts that were discussed:

  • Alain Lévy brought up the idea of “the right to be forgotten”, a new principle for the Social Web to be able to eliminate embarrassing or questionable content associated with us. ( The 5am picture).
  • A few people brought up the idea that we need to develop a fair contract between advertisers and people, just like the implied TV contract (You enjoy this show for free and watch commercials in return).
  • Some regard the current targeting techniques as “sneaky” and not a sustainable strategy.

While I think the idea of “the right to be forgotten” is interesting, I believe it would be too complicated, too complex and implies a flawless execution. (Good luck.) As much as I was delighted to see that all of us in the media/marketing world continue to discuss privacy and control issues, I was still surprised that nobody brought up the idea that users should own their own data. And I’m starting to have the feeling, any further discussions of privacy doesn’t change the core issue.

As I wrote before, sharing your data on your own terms, having complete control of your personal data would eliminate all the demands for regulations and new rules.It seems we’re making things more complicated than they should be. The “deal” that marketers always bring up when talking about targeting, is not a deal. Nobody ever negotiated with people, we just started to assume that people are okay with it. The majority of people don’t care about targeting, even worse for brands: they don’t care about advertising because we still try to play a guessing game. All the data we collect is distilled into assumptions of people. The assumption somebody else has of my identity is not the real me. We collect more data points about a person than any data aggregation technology when we talk to them for 1 minute. Would you base your marketing spend on that one minute?

The waste in advertising dollars on false assumptions will lead to a real contract. People will share their data and intentions with brands, leading to a much more efficient and effective marketplace. We can talk about privacy, regulations and laws all day long. It won’t change the structure of our business. A mind-blowing ROI will.

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A site that takes privacy seriously

October 20, 2010 //

More and more people are getting interested in the concept of VRM, owning and managing your data on your own terms, connecting to brands when you want it. Not when they decide to disrupt you.

During the Breakthrough Summit I met an investor into a new car site: CarWoo! The site allows potential buyers to receive competitive offers from several dealers while preserving their privacy. Using an asynchronous messaging system embedded in the CarWoo website, the buyer can engage with multiple dealers anonymously, ask questions and negotiate. Interestingly, all conversations between the parties is visible to other dealers, turning the interaction between buyers and dealers into a very competitive environment. CarWoo! claims that it will never send spam or unsolicited email to buyers, it doesn’t take any money from dealers. According to CarWoo, 3000 dealers signed up so far and 50-100 dealers are added each week.

In my opinion, CarWoo! falls short when it comes to monetization: It costs buyers $19 to get 2-3 dealers to compete for offers, for $49 3-5 dealers will compete for your business. The reason is clear: Dealers want to communicate with qualified leads, people that are serious about their purchase. This initial hurdle of $19 or $49 will weed out the window shoppers. However, this is very seller-centric.

To get qualified leads in the system costs automotive companies a lot of money and I find it curious that CarWoo! doesn’t have a way for buyers to get reimbursed for their initial investment in the site. At the minimum, CarWoo! should work with dealers to offer easy refunds for test drives or the actual purchase of the car.

As many VRM pundits said before, VRM is beneficial for buyers AND sellers. Whether people decide the service is worth the fee remains to be seen. I like the overall concept of CarWoo! and I wish them well.

Much more to come.

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Facebook – The Next Chapter in Targeting Failure

June 2, 2010 //

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Image: Courtesy of Music Philosophy

This post appeared first on MediaBizBloggers.com

A friend of mine lost his job last year, his mother was diagnosed with cancer and he had to fight off foreclosure threats. A very rough year. What did I see on his Facebook page? Motivational quotes, pictures of smiling people on the beach, pictures of home-cooked food. The occasional negative expression “That was a rough day.” with 5 ‘likes’ and 2 supportive comments of his social graph.

We live a 2.0 version of “The Stepford Wives” on Facebook. Everything is so colorful, so friendly, and so motivational. We’re all just friends, ‘liking’ everything we see and busy creating an identity outside of our real lives. Nobody reveals their real self on Facebook. Actually, nobody reveals their real self on Social Networks. We play a part in this theater we call Social Networking.

Have you ever seen anyone posting “Unemployed and looking for a job” on LinkedIn? Of course not, people are becoming consultants or come up with other fancy titles to protect their personal brand. Most people understand how to shield their real self from the outside and control their own brand.

Mark Zuckerberg’s declaration that privacy is dead, is just another sales pitch. Privacy is alive and kicking. It’s being redefined as we speak. Not from Facebook. Each one of us is redefining privacy. We select what to share. We select who to share it with. We define our own brand. And we like brands that bolster our image, give us more personal brand juice. I might watch each episode of “The Bachelor” and tune into “Charlie Rose” once a year. As a 40ish entrepreneur, what will I “Like” to protect my brand image?

The media industry loves to put people into boxes aka segments. Behavioral Targeting 1.0 promised to deliver relevant messages to targeted audiences. I’ve tested these campaigns for years and they never delivered on their promise. Facebook’s Behavioral Targeting 2.0 will fail even more miserably. At least, Behavioral Targeting 1.0 is based on real user behavior, amassing data about sites I visited, trying to find a common denominator (segments) and communicating with them through relevant messages. Facebook believes what people express in their social graph is what people really think, who they really are. And that my friend, is just not true.

As an industry, we have to come to grips that the end of advertising as we know it is near. Human beings are unpredictable. We don’t want to be put into boxes. We don’t want to be targets, segments, boxes. We are individuals. Most of the time, we don’t want to hear from advertisers. However, there are times when I can’t wait to hear from brands.

Imagine this scenario: I want to go to Europe with my wife for a week. London, Paris and Amsterdam. I want to fly non-stop , stay in 3+ star hotels, eat in one of the 50 best restaurants in the world, celebrate my wedding anniversary with a special evening and my budget is $5,000 for two. Currently, it will take me at least 20 hours to gather all the necessary information through branded sites, review sites and connection with my Social Graph. What do you think is more effective?

Scenario A: The first thing I decide on is a flight. I go to Bing, check out individual airlines (KLM, Virgin Atlantic, British Airways). I decide to go with Virgin Atlantic. Because I visited KLM and BA but didn’t convert, both brands will continue to message me even though my flight is booked and I’m not interested in any offers anymore.

Scenario B: I send out a personal RFP to the world, expressing my specific intent to travel to Europe, including all details mentioned above. Nobody has to guess if I’m still in-market for European flights and accommodation. They don’t have to target me with sneaky tactics or amass data to improve their guessing work. All brands have to do is to develop customized proposals that deliver on my parameters.

Another example: Many think the future of location-based advertising is conquest advertising. I check into a bar and the competition sends me an offer trying to lure me to their establishment. How about I declare my intent to brands (“Lunch for two in 15 minutes”) and for the next 15 minutes restaurants can send me offers? More powerful? Absolutely.

A growing concern with privacy and data protection will speed up the development of tools that will allow people to engage brands on their terms. The targeting guesswork will disappear and advertising will retreat from its brute tactics of the last decades and return to its roots: Being charming, being entertaining, persuading people into changing their behavior.

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Update: Great comment by Jim McCarthy. Social

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Advertising – from battleground back to the persuasion lounge

May 18, 2010 //

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Image: Courtesy of 10.media.tumblr.com

While the Facebook Privacy debate rages on, we have to accept a few facts:

  • Facebook is making a play to own identity on the web.
  • Not only that: Facebook is making a play to own everything associated with identity on the web.
  • Facebook is banking on a value exchange between sites and their own database: We give you site traffic and data, we keep all the data to build a semantic map of the Web.
  • We are entrusting personal data to a company that has a problematic record of dealing with user privacy.
  • The majority of Facebook will continue to share information. Why? Because we want to share information.

Does this mean Facebook will continue to be the de facto Social Web? Absolutely not.

Facebook presents a huge opportunity and promise for brands: A data pile of personal information that should enable marketers to deliver more relevant and targeted advertising. Sounds like Behavioral Targeting 2.0. This model implies that people want to receive more targeted and relevant messages. And that’s where the whole model falls apart.

Most of the day, people want to be invisible to advertisers. They want to read or entertain themselves without any disruption of the advertisers. And there are times when I want to hear from advertisers or would love to have a comprehensive profile I want to share with companies. During that limited amount of time, I would love for Acura to know what kind of car I’m looking for and have an insight into my purchase history to develop a personal proposal for me. I would love for Travelocity to know that I’m looking for a hotel close to Heathrow Airport.

We just don’t want this information stockpiled, used against our wishes and used against us during a time when we don’t want to hear from brands. We don’t want information that we shared with one company sold to another company to deliver more disruptive messages.

What we want is to share our digital DNA on our terms. Not on the terms of data mining companies and marketers. On our terms.

Which leads me to the second reason why this model won’t work: My Facebook profile is not the real me. Nobody is the real self on Facebook. We’re revealing a very small part of our real self. Nothing more. Most people stay away from politics or religious topics. We never hear from major conflicts in anybody’s lives. Facebook reminds me of kid shows like Cailou or Berenstein Bears. Sure, there are some minor conflicts but, overall, we’re doing great and everything is awesome. We’re all playing a part in the Facebook world, just like the avatars in Second Life. How do you expect to deliver relevant messages to me if you don’t know the real me?

Last but not least, if Facebook becomes the Social Graph, innovation will stop. Imagine Internet Explorer as the only game in town. No Chrome, no Firefox. Only IE allows you to access the web. If that’s scary, think about Facebook being the only Social Graph in town. No innovation. Stagnation. The Social Web would end before it even really started.

That’s why we need for people to claim ownership of their data. Allow them to store their personal data in a safe and secure space. Share any data on their terms:

  • Dental records with their periodontist and general dentist, avoiding lengthy approval cycles and wasteful document exchanges.
  • The intent to purchase a car with preferred brands. Allow them to send personal proposals. Eliminating the guesswork and sneaky, behavioral tactics of marketers.
  • Their food preferences and budget with restaurants through a location-based application. Allow restaurants to send time-sensitive offers based on personal profile.

Advertising, as defined by Wikipedia, is a non-personal form of communication intended to persuade an audience to purchase or take some action upon products, ideals or services. The current landscape of advertising feels more like a battleground and not a persuasion lounge. We have done the same thing over and over again. More efficient. More relevant. More targeted. It’s still not working.

I don’t know about you, but I don’t really see the benefits of living in a world where brands constantly have to fight for and with customers. I’d rather live in a world where brands and people co-create and collaborate. And people share what they really need. On their terms. And advertising could get back to its core business: charming and persuading people.

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