online advertising

Unless you live in a boot at the bottom of Loon Lake, you know that everything you do online is tracked. When you load a web page, an array of scripts, cookies, and code starts chugging away behind the scenes gleaning information about who you are, where you are, how you got to the site, what you’re clicking on, and where you go next. At least now most websites disclose what they’re up to and ask for your consent – compliments of the new EU General Data Privacy Regulation.

Retargeting consumers as they move from site to site is big business and has become business as usual. It happens to you all the time. You look at an item on Amazon, EBay or Walmart, then see ads for that product on other sites for days, sometimes weeks, to come.

Ads from Google’s Adwords platform are paired with your offline credit card purchase history to gauge effectiveness–anonymously, of course, though researcher Yves-Alexandre de Montjoye and others long ago demonstrated that anonymized data can be re-identified.

Since you almost certainly missed the memo (because there was never a public one), demographic data is gleaned from your browsing history and paired with your social media accounts to form a working biography of your likes and dislikes. This information is then packaged and sold to companies selling all stripe of products and services to presidential campaigns and the state-sponsored attackers who hack presidential campaigns.

While tracking raises many privacy issues, it’s widely regarded as a net positive for businesses with a web presence. If you’re able to overlook the depredation of consumer privacy, it’s great. Google Analytics, the biggest player in the market, offers real-time tracking of visitor behavior, locations, and demographics, and integrates seamlessly with Adwords–this, in turn, tracks users across the web once they’ve left your site. E-commerce sites can refine their strategy to sell more products, content creators can get immediate feedback on what’s resonating with users, and bloggers can get paid a “vig” for sales made from Google or Amazon ads displayed on their sites.

That said, ad tracking isn’t all red sauce, roses and romantic violin music. In the longer term, the privacy issues are arguably worse for those companies that use tracking to increase their metrics than the individuals being tracked. Online advertising is a data free-for-all. A business that uses tracking is tracked and just as much data is grabbed about the company trying to drum up more business than gets snagged in the drag net of online consumer information. Imagine a line of fish in descending order being eaten.

Not many companies would share their information with a market research firm without a non-disclosure agreement in place, yet when a company uses third-party analytics to serve ads based on laser-accurate aggregated data sets, its own data is aggregated. The information is arguably more sensitive since it pertains to what makes a business tick.

Given the ongoing data sprawl associated with Google, Amazon, and Facebook, businesses are handing over their intelligence and data quite literally to the great unknown.

AmazonBasics offers a wide array of products, ranging from batteries to yoga mats to pet supplies at cheaper prices than competitors. A store that does well selling its own branded products is nothing new. However, Amazon is doing so well right now because it has access to the data of every seller and advertiser using its platform. It knows what worked and why. If you’re selling something on Amazon, everything you know about doing that successfully is known to Amazon. With that information it can nudge you out of the equation.

The threat isn’t limited to e-commerce sites: Google’s dominance of the online search market (paid and otherwise) has led to the creation of Google-specific protocols regarding the way a website is coded and structured. A Google-friendly site means higher search engine rankings, cheaper ad clicks and higher all-around traffic. On paper, this makes good sense. After all, Google helped to standardize the technologies and languages of the web.

But the operative phrase here is “all-around.” Google uses these specifications to deliver the content of any given website in its search results in the form of “snippets” (type in a question to try it out). The reward for a  top search result is more traffic and more revenue for Google. In simple terms, Google used the standards it set up to improve SEO as a means of keeping people on Google.

This means that any website providing a service–news, weather, sports, expert blog advice, or information portals like IMDB with revenue models that depend on ad revenue–can have its content extracted and ad revenue disappear. Facebook has employed a similar tactic. Between the two companies, two-thirds of the online advertising market is affected.

The alternative, once again, is no alternative at all since opting out of Google’s or Facebook’s respective orbits amounts to opting out of the internet, or at least the most visible parts of it.

The lesson here for businesses is one that private citizens have already learned the hard way: Once you share your data online, it no longer exclusively belongs to you.

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