We are in incongruous times, it would seem. It’s unlikely that digital businesses, built as they are on listening and responding to consumers’ preferences and giving them instantly what they want, would be able endlessly to overstep consumer comfort zones. We’re seeing increasingly that consumers are asking for, demanding even, increased transparency and control, and the market has been responding.
In politics, opportunities for change like this are set into the system with regularly timed elections and a defined process for a balance of powers and a redress of grievances, if necessary. In digital marketing, checks and balances come to the fore every single time a consumer buys something or chooses to use a specific service, like a free, advertising-supported news site. However, it takes a lot of consumers acting similarly to create a swell strong enough for brands to feel the impact of the wave and be impelled to change.
Despite the natural laws tending toward stasis, I believe we are on the cusp of motion having its effects, as we see strong movement toward a pro-consumer course correction.
The proof that we are in a new paradigm is the slew of recent announcements of new privacy initiatives from many of the digital industry’s leaders. Whether it’s Apple or Mozilla or Google or Microsoft or Facebook, these declarations indicate that privacy has risen to the top of the agenda, and many leaders are even calling for tighter government regulation, something they’d long abhorred. Perhaps unsurprisingly though they are doing it in different ways, and it’s going to be up to consumers, and in some cases regulators, to decipher which are the best ways forward, which really protect consumers and their privacy, and their choices, while keeping the web, our most important source of news in this democracy, safe and open.
Consumers are closely watching the news about data breaches, the rise of surveillance states, privacy regulations like the General Data Protection Regulation (GDPR) and the spread of digital technologies throughout their lives. While they might not understand how all of technology works, they are sophisticated enough to know which issues give them enough discomfort to affect their preferences.
Those of us who have been around awhile watching the businesses based on data develop know that every single one of these issues is a result of innovations driven by voracious consumer demands for convenience, social connection and media consumption. Digital companies simply answered consumer desires as quickly as possible to win, and up until recently, it’s been working. But companies are now working to address more than just consumers’ appetite for better products, they are increasingly addressing a call for more respectful use of their data as well.
Just days ago Google, for example, launched a series of new privacy tools and initiatives. Soon Chrome will give users enhanced control of how cookies are used by providing more transparency about how sites are using cookies and how, as well as simpler controls for “cross-site cookies” resulting in the ability for users to clear cross-site cookies but keep those that maintain settings and logins, as stated in a company blog post. In addition, Chrome plans to restrict “fingerprinting” more aggressively, fingerprinting being the term of art of underground tracking mechanisms that cannot be managed by consumers. Beyond Chrome, Google is setting up the means for users to learn what data was used to target an ad to them and what ad tech intermediaries played a part in it.
Apple has been in the midst of a consumer campaign touting its privacy features and even trying to compete on a putative claim to respect consumers’ privacy more than its competitors, under the tagline: “Privacy. That’s iPhone.” It launched the debut video spot of the campaign, which many thought was more about branding than anything else. Later that month it released a follow-up about ad tracking limitations in Safari. In May came the third installment about end-to-end encryption in iMessage.
Then there’s Facebook, which has faced critical revelations about its platform’s manipulation and harsh criticisms. While the company has actively been trying to build its reputation for privacy, it may be especially telling that founder and CEO Mark Zuckerberg felt compelled to include this quote recently in a blog post, “Frankly we don’t currently have a strong reputation for building privacy protective services, and we’ve historically focused on tools for more open sharing. But we’ve repeatedly shown that we can evolve to build the services that people really want, including in private messaging and stories.” From the man who has perhaps the clearest view of consumers in all of history, what do people want? Privacy.
The question then becomes which, if any, of these should be considered the preferred way forward. There’s much debate—and much competition of course. At first glance, Apple’s approach seems to be pro-consumer but it also takes away from the consumer the decision on third-party cookies, and the implications could be significant, for digital ads and especially for those publishers reliant on them. Google, meanwhile, takes the stance that the data it gathers improves user experience, serves the end customer and promotes an open web. In an Op-Ed in The New York Times, Google CEO Sundar Pichai emphasized his company’s strategy is one that makes privacy and access to the web more democratic. Pichai made a clear point that others, probably implicating Apple, are turning privacy into a “luxury good” for the select few and only within their closed systems.
There’s no doubt in my mind that there is a need to balance enhanced user privacy with providing users with choices they make, without dictating them. This is important, especially in a world that depends even more on the web for information and entertainment. If Apple’s Intelligent Tracking Protection (ITP) approach is taken to an extreme, it could create a world where every site is behind a paywall—a fragmented web which implicitly favors those who have the ability to pay for their content. That doesn’t sound very pro-consumer, or pro-publisher, to me.
Last October I wrote about how consumers don’t want browsers to be helicopter parents by taking away the choices they make about how to manage their own cookies. These anti-cookie announcements make companies seem like privacy advocates, but that’s different from being consumer advocates, or even advocates for a free and open web—and press. Consumers want choice, and some people might want personalized, relevant ads compared with an internet full of poorly targeted spam. I also noted that as Safari has cut back on open-web tracking, it has ramped up tracking in apps.
As the industry and regulators take decisions, they must also take care to understand the relationship between privacy and competition. For example, it’s well established that advertising is critical for new competitors, especially smaller emergent ones, to arise, and for existing ones to maintain their ability to stay in business. Privacy regulations should be crafted with an appreciation for their potential effects on competition. Calls on companies to restrict data flows can also have the unintended result of decreasing the effectiveness of advertising and a possible consequent reduction in profits of news publishers, while simultaneously increasing their compliance costs. These dual, interacting effects will have an impact on how many companies, especially the press, can compete in the marketplace. These natural, complex and correlated marketplace consequences of enhanced privacy regulations aren’t easy to predict, but we shouldn’t be surprised at unexpected negative outcomes. Treading thoughtfully, intentionally, should be the strategy.
To compete in the future, businesses need to be pro-consumer inside and out. This means taking an approach that enhances users’ privacy, allows them to enjoy the benefits of the ad-supported internet and protects their choices, and freedom of speech, without making decisions for them that they should make for themselves in a free society. Products should protect consumer privacy and have a sustainable business model. Privacy regulations should be balanced to optimize for both. Indeed, these can be one and the same. Because any business model or regulatory approach that tramples one in favor of the other isn’t sustainable.
Much has been done, but so much more needs to be done to achieve the right, dispassionate and equitable pro-consumer approach.