Sat 05 Jan 2013 07:17:20 AM PST
Where's all the legit spam?
Remember CAN-SPAM? This was the US Federal law that overruled state laws on email spam, some of which were strict, and cleared the way for advertisers to send all the spam they wanted, as long as they followed a few basic rules. It was a huge lobbying victory for the Direct Marketing Association.
Today, the data, the tools, and even the law are all there for advertisers to take full advantage of email spam. The CAN-SPAM debate is over. The Internet privacy nerds lost, and database marketing won.
So where is all the CAN-SPAM compliant spam?
After all, it seems like it should be a no-brainer. Spam has everything that's promising about adtech. Web ads promise targeting, but spam has been able to deliver it for a long time. Why aren't advertisers using it?
Let's go back and look at the potential
of adtech. In Ad Age, Adam
Lehman, COO and General Manager at Lotame, writes,
With the enormous variety of information available
through the Internet, I am able to do research on
running shoes across diverse sources. Based on the
interests I express through my research, I may be
presented with downstream advertising offers, which
I can take or leave.
The key word here is "downstream." Lehman goes to a running site and somehow expresses interest in shoes. Later, while he's browsing some other, possibly unrelated, site, an advertiser "retargets" him with a shoe ad. The "downstream" site can be running whatever the hell is the cheapest content that Lehman is willing to look at at all, because adtech magick will stalk, sorry, retarget him. That's the adtech Holy Grail. Instead of having to place ads on relevant content, an advertiser can chase the user onto cheaper and cheaper sites. (An example of this effect is the problem of ads showing up on infringing sites. When technology starts automatically searching for cheaper and cheaper places to run an ad, it inevitably connects with the Internet's bottom-feeders. But that's another story. If you're in adtech and not reading Chris Castle, the webmasters of skeevy rip-off sites are so far inside your OODA loop that you might as well not bother.)
Anyway, back to spam. What if you took adtech and turned all of its qualities up to 11? Exact user targeting? Sure. Email addresses are in marketing databases already. Save money on content? Can't get cheaper than free. Take every adtech concept and max it out, and you get email spam.
But what's wrong with that? John Battelle writes,
It’s actually a good thing that we as consumers
are waking up to the fact that marketers know a
lot about us – because we also know a lot about
ourselves, and about what we want. Only when we can
exchange value for value will advertising move to a
new level, and begin to drive commercial experiences
that begin to feel right. That will take an informed
public that isn’t “creeped out” or dismissive of
marketing, but rather engaged and expectant – soon,
we will demand that marketers pay for our attention
and our data – by providing us better deals, better
experiences, and better service. This can only be
done via a marketing ecosystem that leverages data,
algorithms, and insight at scale.
As they say on the Internet, d00d wtf? The first step
in me getting a better deal is for the other side
to have more information about me, and for
me to be
engaged and expectant about that?
If that's true, advertisers should be able to (1)
Dump the company accounting database as CSV (2)
Upload it to Wikileaks (3) PROFIT!
Information asymmetries work in favor of the side with more information, and no hippy-dippy talk about "engagement" and "ecosystem" is going to change that. If you know enough about individuals, you can give better offers and service to the high-Whuffie customers, and rip off the rest. Or discriminate in other ways.
IBM is already offering a social analytics package for mobile carriers that will let them see how influential a customer is over the carrier choices of others. From there, carriers can easily partition the support tree into customers worth paying attention to and others. The open question is how close is the relationship between customer-available social metrics such as Klout and the internal scores. "I have to call support...better get my Klout above 50 or I'll be wasting my time."
But back to email spam. Which is the digital version of direct mail, which is the paper version of a cold call. The problem with that whole kind of communication is that it's based on extremely fine-grained data on the seller's side, and none on the buyer's.
An advertisement that's tied to content, in a clearly expensive way, sends a signal from the advertiser to the buyer. The extreme example here is an ad in a glossy magazine. It'll still be on that magazine years later, and every subscriber gets the same one. Almost ideal from a signaling point of view. The other extreme is a cold call, which carries no "proof of work" or signaling value. All the information is on the seller's side, so the cold call is of no value to the recipient.
Which is why users block email spam. It's worthless. Even spam that complies with CAN-SPAM is worthless.
Now look at web advertising. A web ad is neither magazine ad nor cold call, but somewhere in the middle. The key problem with adtech is that it's moving web ads further and further away from magazine-style, with signaling value, toward spam-style, with no signaling value.
It's no coincidence that as adtech gets "better," users are blocking more ads. If you crank up the targeting far enough, the ads start to carry so little signaling value that the web will become a refuge for bottom-feeder advertisers, the way email spam is today. Adtech's success would be a failure for advertising.
There is a better way, though. And print has it. Fine Homebuilding magazine is actually much more valuable to me because of the ads. I can skip or view them as I choose, and, more importantly, they convey valuable information to me about sellers' intentions to sell and support products. I'd prefer the magazine with the ads to the magazine without them.
We need to start making a distinction between adtech, which is creepy and wrong, and advertising in general. We seem to be going down the path that advertising on the Internet == creepy adtech. But advertising on the Internet in combination with technology and norms that respect privacy can be a good thing. After all, advertising is good for both buyers and sellers when it acts as a public signal of a seller's intentions. This has always been true but will become increasingly obvious as buyer-driven search improves.
So the hard part is making web advertising work more like print advertising. That's going to take good design and UX, and effective sales as well as privacy tech. It's past time to revisit some of the browser design decisions that affect privacy and cross-site tracking. During the dot-com frenzy, the industry made some bad decisions on how to handle third-party cookies and scripts in the browser. Today's browsers are a wretched hive of scum and villainy, privacy-wise. But that's starting to change. Tracking Protection Lists from MSIE are a promising start, and the Firefox scene has a confusing selection of extensions that implement some good privacy improvements that are looking increasingly likely to make it into the mainstream browser.
Online advertising will be worth a lot more when we outgrow creepy adtech. The question is how to allocate the costs of the privacy work—all advertisers will benefit, so it's a classic free rider problem. All advertisers would benefit by raising online advertising's signaling power, which reducing targeting capabilities would do, but a specific ad can perform better if user-targeted.
And even if de-creepifying advertising is the right
thing to do, people aren't economically rational.
So they don't value each other's freedom even when
it's in their best interest economically to do so.
The pride of man makes him love
to domineer, and nothing mortifies him so much
as to be obliged to condescend to persuade his
inferiors. Wherever the law allows it, and the
nature of the work can afford it, therefore, he
will generally prefer the service of slaves to that
of freemen. This comes in The Wealth of
Nations right after a long explanation of
how free labor is preferable to slave labor from the
POV of the employer/owner. We have to be realistic
when thinking about adtech's appeal to conventional
marketing decision-makers, who could easily prefer
a tracked or locked-in customer to one with which
the vendor might have a more profitable equitable
Anyway, that creepy feeling you get from adtech? That's your inner Homo economicus talking—listen up.