I’ve been following the “Do Not Track” discussion with interest. I’m not sure I have any particularly strong feelings about the proposed implementations, but I’m curious to see what happens. And of course it’s been hilarious, as always, to see some of the knee-jerk pro-corporate responses that the policy proposal has prompted.
There’s an aspect of the debate that I briefly tweeted at Harlan Yu, and I guess it might be worth expanding on a bit. Consider an excerpt from this post over at TLF:
The FTC’s report calls for a “uniform and comprehensive” way for consumers to decide whether they want their activities tracked. The Commission points to a Do Not Track system consisting of browser settings that would be respected by web tracking services. A user could select one setting in Firefox, for example, to opt out of all tracking online. The FTC wrongly calls this “universal choice.”
Really, it’s a universal response. It’s a single response to an overly-simplified set of choices we encounter on the web. This single response means that tracking for the purpose of tailored advertising is either “on” or “off.” There is no middle setting. But it is the “middle” where we want consumers to be. The middle setting would represent an educated setting where consumers understand the tradeoffs of interest-based advertising – in return for tracking your preferences and using them to target ads to you, you get free content/services. But an on/off switch is too blunt and not, err, targeted enough. There is no incentive for consumers to learn about the positives, they’ll only fear the worst-case scenarios and will opt-out. In return they’ll also opt-out of the benefits. [more on the “middle” below].
(Aside: can we please stop with the transparent attempts to frame the debate in a self-serving way through use of the word “nuclear”? Everyone knows what you’re doing, dude.)
Let me quibble with the free content/services bit embedded here. Implicit in this assertion is the idea that advertisers’ ability to possess better information about consumer behavior allows ads to be more precisely targeted, making the ads more valuable to the businesses that place them. This increases the revenue available to ad-supported industries, many of which provide valuable content or services through what is a de facto tax on businesses.
I think the evidence for this dynamic is weaker than a lot of people suspect. As far as I can tell, it’s all based on Google. GOOG showed up and provided contextualized ads to consumers and a model that allowed advertisers to only pay for purchases that were “working”. This is pretty much the only way they make money, and they make a lot of it.
But Google’s a huge success in a landscape of failure. Online ads sell for pathetic rates relative to broadcast or print. This is because by all accounts online advertising doesn’t work very well. You can measure whether someone clicks on an ad, and often whether they buy something after that click. But it turns out they rarely do those things. So businesses aren’t willing to pay very much for ad space on websites.
Is it really a coincidence that the advertising medium with the best instrumentation also appears to be the least effective? I suspect it’s not. It may be that ads never worked as well as the industry had told us; or it may be that the eyeballs/clicks/conversions funnel is a naive conceptualization of how the system works. Either way, Google has succeeded by giving advertisers what they think they want, which is analytic tools that seem to reveal that the whole enterprise is horribly ineffective.
I think the push for better tools and more efficient ads is basically a race to the bottom. In fact, less perfect instrumentation might allow the ad industry to capture a bit more revenue from business thanks to decreased efficiency. If I’m right, those in the business of selling ads should be excited about initiatives like Do Not Track. I don’t think it’s conceivable that the market will cease pursuing greater efficiencies unless this kind of regulatory intervention occurs.
It might sound a little strange to hear me sign off on the government propping up an industry I detest. Honestly, advertising is a big reason I find myself on the liberal side of the corporate/state distrust spectrum. There aren’t many things I find more odious than cynical attempts to manipulate people’s thoughts and desires — especially when it’s done using quirks of biology and psychology. Our anti-propaganda norms make it quite clear that we don’t tolerate such manipulation from government; when examples of it are revealed, they’re harshly criticized and punished. Yet we accept as perfectly normal the idea of such manipulations being pursued by private entities, who are free to try to cajole us into doing things contrary to our own interests, and without any mechanisms for controlling them other than the adeliberate market and (viciously resisted) regulation.
It’s a bit weird. Distressingly weird! So I think preserving personal privacy is probably worth the introduction of this kind of inefficiency. And I think the preservation of the media creation business is desirable, and I don’t really believe in any models for accomplishing this except some sort of (probably convoluted) public subsidy. If I’m right, decreasing the efficiency of advertising will act as a de facto tax on businesses which choose to advertise. We’ll consequently pay slightly more for products sold by such businesses, and the difference will help pay for our magazines and newspapers and web videos and music. I think that’d be an okay deal.