Give and take

You know how those online ads seem to follow you everywhere?

One day you’re looking at woks on Amazon. The next day, every website you visit has wok adverts down the side.

This is because of tracking cookies.

Tracking cookies are basically a store of information about your browsing history that follows you around.

They are stored in your internet browser and advertisers can access them to target relevant ads at you.

Websites force you to allow these cookies if you want to see their pages. They have always done it. But since last year they now have to tell you they are doing it.

This is the reason you now have to click “I accept” on almost every website you visit before you can see its contents.

There is no getting around it. This is one of the many prices you pay for the “free” internet.

Regulators thought that by introducing new regulations it would help people avoid this spying and leeching of data. But all it did was make our browsing experiences worse.

Like I said, because of those new regulations we now have to jump through hoops whenever we visit a new website. We must consent to it doing with our data as it wishes.

I have covered this issue in detail, and written about a possible solution to it in issue five of Crypto Wire. If you’re not a subscriber you can take out a trial here.
But online tracking cookies are not the subject of today’s piece. “Real-life tracking cookies” are.

Real-life tracking cookies are advertising’s latest weapon against your free will

Advertising runs on your personal data. Heck, most of the words “big tech” companies do.

This should not be news to anyone, especially any regular readers of Exponential Investor. It’s a topic I covered many times last year.

Up until now there was an easy way to escape all this online advertising. Close your laptop. Turn off your computer. Put away your mobile phone.

The advertisers can only get at you when you are staring at one of your screens. At least, that’s the way it used to be.

But like a horror movie monster that steps out of your TV set, or an evil spirit that attacks you from beyond the grave, advertisers now have a new weapon: real life.

Those tracking cookies I talked about? Well, they are no longer limited to your internet browser, they have morphed into something stored inside you.

Your own individual identity can now act as a tracking cookie. And there’s no way to turn that off.

From Yael Grauer on Medium:

We’ve been on the path here since at least a decade ago when the New York Times reported that some digital billboards were equipped with small cameras that could analyze a pedestrian’s facial features to serve targeted ads based on gender and approximate age. Things have progressed as you’d expect: In 2016, another Times report described how Clear Channel Outdoor Americas had partnered with companies including AT&T to track people via their mobile phones. The ads could determine the gender and average age of people passing different billboards and determine whether they visited a store after seeing an ad.

Mobile advertising IDs aren’t exactly anonymous. “Only a few data points are necessary to identify individuals. Our activity in our social life and where we were are at least as identifiable as a name,” said Sean O’Brien, lead researcher at Yale Privacy Lab, a program within the university’s law school.

Though a mobile ID might be “anonymous,” an advertiser could combine that data with additional information obtained elsewhere to profile individuals, effectively marrying online shopping profiles with brick-and-mortar retail to see if someone visited a store after seeing an ad.

The ad that follows you through your day is a popular trope of the sci-fi genre.

In the film Minority Report there are cameras by each billboard that scan your face and personalise the video adverts they display. Here’s a clip.

As you can see from the excerpt above, we are very close to this reality now.

It’s all about give and take

Author Brian Hoffman is quoted in Grauer’s article saying: “Advertising used to be about imparting information, and it’s more and more now about collecting information.”

I think that’s a great way to sum up where we’re at.

When the main things to sell were physical products, showing us the benefits of these products was important.  If no one knows how great your product is, no one can buy it.

Now the world has turned. The most valuable things are no longer things at all. The most valuable things are data.

Sure, many successful companies still exist that supply physical goods. They always will.

But many of the biggest and most powerful companies today make most of their money from data. That’s’ essentially what “big tech” is.

These companies no longer need us to buy into them, they simply take what they need from us – our data.

The most valuable thing we can give them is not our money but our habits, hopes and dreams.

They can then bundle all this humanity up and sell it to the highest bidder, over and over and over again.

Because of its digital nature, this data is not a “one and done” kind of thing. It can be sold many different times to many different entities.

These advertising entities can then analyse it, and twist it back against us so we will buy what they are selling.

They can use this data to make adverts so precise and personalised that we won’t be able to resist.

Only, it doesn’t really work like that, does it?

Why then, is almost all advertising so woefully bad?

It’s a convincing narrative, isn’t it?

The tech giants that take our data… the advertisers who decipher it all and mould it into irresistible adverts… us, the helpless citizens who fall prey to it all and throw money at them.

The question I’m then left with is why is advertising so universally terrible?

You’d have thought with all that data, all that tech, all that computer power that ads would be scarily hard to resist by now.

Yet every year they seem to get worse and worse.

2013’s trend was for animals, people or animations singing and dancing well-known songs in “hilarious ways” in an attempt to “go viral. Think Three and its moonwalking pony.

Did any of these adverts make you buy anything?

2016’s trend was for nostalgia. Big companies would pay to licence old cartoon characters or well-loved film icons to sell their ware. Think Halifax and its Flintstones adverts.

Did any of these adverts make you buy anything?

2017’s trend was a combination of the two. He-man’s Skeletor dancing along to Fame.

Did any of these adverts make you buy anything?

Do any of those terrible adverts that clog up our mobile phone apps convince you to buy anything?

Would a billboard that said your name – a la Minority Report – convince you to buy anything?

I guess the question I am asking is, as bad as all that I have written about today sounds, and arguably is, who are the real winners and losers here?

We are getting services that 20 years ago people could not have dreamed would exist – at any price. And we are getting them for free.

Advertisers are convinced that they can make enough money from tracking us using these free services that they can sustain their businesses and persuade is into buying more stuff.

But, what if these advertisers are deluded.

What if it’s not these advertising parasites that are winning here, what if it’s us?

What if ultimately the joke is on them?

We get amazing free services and they get the 21st century equivalent of magic beans – “data that will make their adverts perform to perfection”.

It’s an interesting idea, isn’t it?

I don’t really know if I believe it, but I do think it’s an interesting idea nonetheless.

It’s definitely something to think about.

Let me know your thoughts: harry@southbankresearch.com.

Until next time,

Harry Hamburg
Editor, Exponential Investor

PS If you haven’t claimed your “jump-start your portfolio for 2019” package, you still have time, if you’re quick. This package includes seven free gifts aimed at helping you make 2019 the most profitable year of your life. Claim yours here before 11.59pm tonight.

Category: Artificial Intelligence

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