somebody’s watching

There’s a certain techno-futurist vision of personalized advertising where constant surveillance leads to complete erosion of privacy, all in the service of targeting advertising to your behavior and tastes.  The most popular picture of this future was in the movie Minority Report, where talking ads creepily enveloped the hero in a wash of ad patter while he ran for his life.

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Despite this dystopian vision, I think the current level of public concern about the privacy invasion of targeted advertising could be described as significantly beneath swine flu and slightly above Lyme-disease bearing ticks.

But this year, the largest online advertisers and ISPs have really begun to show their power over consumer behavioral data.  The New York Times has been utterly obsessed with this topic, to the point where it’s somehow news when a company decides not to use a targeted ad system.  (I wonder if it there could really be such a thing as behavioral tracking so creepy that even advertisers won’t use it.  The cynic in me says that the system probably just didn’t work well enough to justify the cost.)

Consumers who are asked about privacy generally want greater control over their marketing data, but don’t know how they can achieve it.  In sympathy to this consumer demand, the industry’s leading ad networks have banded together to establish best practices for use of consumer data.  (This sympathy was perhaps supplemented by the interested attention of the FTC.)

Industry self-regulation is a time-honored method of appeasing and forestalling government regulation.  There are areas where this works just fine (in terms of industry commercial interest, if not art) – comics, movies and video games – this tends to involve public morality.  And there are areas where greed and the public interest seem destined to cycles of boom and bust and bust – some industries just don’t seem capable of operating without eventual crisis in a deregulated environment.

So will the ad industry’s attempt self-regulation turn out more like the entertainment industry’s successes with the morality police, or the financial industry’s pathological self-destructiveness?

On the one hand, the dynamics of targeted advertising share some characteristics with complex financial instruments:  advanced algorithms, proprietary trading systems, a leveraged financial return from a slight mathematical edge.  On the other hand, consumers are not in bed with advertisers in the way that they were with their bankers and brokers and realtors.  A little willful blindness made everyone happy for a while in finance, but that same blindness in advertising only covers growing consumer unease.

There are startups that tried to give greater consumer control over marketing data, but none really got a lot of traction.  The problem may have been that the problem wasn’t big enough yet.  Until everyone’s singing like Rockwell, it could still be too early.

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