I’m an advocate for being rewarded for both my data and my attention by those making massive profits from them. I’m also extremely concerned that my privacy is being abused for unknown agendas and campaigns, much less things that I would support. 

However, as Founder of a media tech start-up, what I believe in and what my customers want and demand aren’t necessarily in alignment. So, when I go ranting about such issues, those with less evolutionary zeal on my Advisory Board remind me that “Convenience Always Trumps Privacy.”

Let’s explore this idea a little bit….

Personalization is Convenience

One thing we have learned from the past two decades of digital marketing is that personalization matters. No matter how invasive the techniques to find out through our online footprints who we are, what we are (currently) doing, and predicting what we are planning to do in the future (travel, shopping, reading), the majority of consumers still want a personalized, contextually relevant advertising experience. In other words, consumers prioritize convenience — and are willing to give up some privacy rights to get it.

In fact, the data shows that 63% of US viewers of ad-supported video don’t mind seeing ads if they are paying nothing (1), while 3-in-5 viewers state that they are more likely to care about a personalized ad (2). Research shows that consumers are willing to tolerate certain types of ads or ad experiences when they are incentivized or when they are expecting them.” (3)

The first thing I find humorous is that 37% of people who are determined to pay nada for their streaming video experience hate all their ads, all the time. What we do about the eternal happiness of these Scrooge McDuck people, I am not sure, but let’s assume these people are blocking ads at a very high rate.

What about the 3 out of 5 people who care more about having a personalized ad experience? This makes intuitive sense, right? If you have given up your vegetarian ways for a Paleo diet, and you are in the market for a set of steak knives, then those steak knife ads are convenient and more readily accepted. If they incentivize you by throwing in the cutting board, even more so. In other words, we have a higher tolerance level for advertising when we perceive there is relevance, convenience and value added.

Ok, so it is generally understood that viewers prefer personalization, but in a world where viewer attitudes on privacy are changing, fines for data breaches are increasing, and regulation is looming on tracking viewers, what happens if we can no longer personalize an ad? 

The Personalization Privacy Dichotomy

In May 2018, personalized marketing automation technology provider Sailthru surveyed 2,000 consumers to better understand shifting sentiment toward security and data privacy (4). More than 60% of respondents believed the US government should regulate how companies use consumer data.

In the wake of the Facebook scandal (sharing their user’s data with Cambridge Analytica) and the many massive data breaches from companies like Yahoo (3 billion user accounts), Marriott International (500 million customers), eBay (145 million users), and Equifax (143 million consumers), viewers are becoming increasingly aware of how their data is being used, abused and stolen– and they want to take control of their data (5). 

As shared by eMarketer, attitudes are shifting (6):

We are also seeing State and Local governments legislating to ensure more consistent protection of consumer and personal data, such as the pending California Consumer Privacy Act (CCPA) that follows the lead of the General Data Protection Regulation (GDPR) in the European Union.

Apple and Google, sensing these changing attitudes, have decided to tighten up “cookie” tracking security within their browsers making it more difficult to both track viewers and personalize the viewer experience.

So here is the dichotomy: it’s clear viewers will trade privacy for convenience, but as personal and government attitudes about privacy harden and advertisers ability to personalize becomes more difficult, advertisers will be forced to deliver more privacy, less convenience, and a lot more of the irrelevant ads viewers will do anything to avoid.

Think about that situation for a second! As this scenario plays out, the value chain for both advertisers and viewers is diminished. Both are going to be less satisfied, yet Apple and Google have decided to make it more difficult for themselves to track viewers.

Huh? Why would they do that?

The squeeze is worth the juice for them, that’s why. Let’s look at why:

Browser Cookies are Crumbling

So what are cookies? How do they impact privacy? Why are they in the news as of late? 

A cookie is a file that your internet browser writes to your local computer and helps keep track of your visits and activity. For example, they remember what’s in your shopping cart between visits (otherwise you would have to start again with your order each time). (7) There are different types of cookies, such as session cookies that only last the session, authentication cookies that track whether a user logged in and what identity they are using, and then there are the long term cookies that are written to your computer and store tracking information.

Given the hardening attitudes to privacy already discussed, it’s not surprising that viewers are increasingly clearing out their browser cookies on a regular basis to hide their online tracks from Brands and Advertisers, but what is more important is that Apple and Google are making changes to their Safari and Chrome browsers, ahead of any legislation, allowing “…users to block, clear, and control their third-party cookies in a much more granular way than what is currently possible through their browser….” (8)

The pressure has risen against technology providers, forcing them to become more responsible in their handling of viewer data. Apple have gone to great lengths to tighten their data privacy stances, issuing multiple updates that prevent any workarounds to third-party ad tracking and changing all default settings to not use cookies. Google are now following in Apple’s anti-tracking footsteps as a means to be seen by consumers as the most responsible carriers for their data.

To be clear, there is a difference between Apple’s and Google’s stances here. Apple is known for blocking any FBI access requests to their phones and is constantly improving hardware, software encryption, and security features on their devices. Considering Apple does not earn any advertising revenue, they can strengthen their “Champion of Privacy” brand by removing cookies, get in the good graces of regulators, and paint Google as the bad guys, all the while doing damage to Google’s ad supported business model.

So – if this damages Google’s ad supported business model, why is Google following in Apple’s footsteps and banning and blocking cookies by default?

The reason is that the damage is small compared to the upside, because Google have billions of User ID’s and can therefore track most users without cookies. The kicker for Google taking this stance is:

1. They get to virtue signal to regulators about privacy, and
2. They will earn more money from publishers who will be forced to advertise more and more within the Google ecosystem if they want the personalization and associated higher CPM rates that only Google IDs can deliver.

“If demand-side platforms can no longer leverage third-party cookies on their supply, buyers won’t be prepared to pay the same CPMs given they won’t be able to match users or to execute basic controls around areas such as reach, frequency or attribution,” added Paul Gubbins, programmatic lead at Unruly. “If the open internet can’t provide some sort of universal and holistic ID, the buy side will be forced to work with those that can: Google, Apple, Facebook, Amazon,” added Gubbins. (9)

 “Data privacy has become an arms race for the browsers,” said Dan Wilson, CEO of London Media Exchange.

As regulatory and user pressure mounts, the big technology companies are at once virtue signaling and playing to their strengths — their grip on identity within their respective ecosystems. They will continue to personalize and offer convenience at the expense of their competition, who will have no choice but to run into the arms of platforms who have a monopoly on identity.

The identity wars have started, and the privacy maneuverings have begun. The first casualties are the same casualties we have seen to date — traditional publishers, attempting to monetize outside of FAANG (Facebook, Apple, Amazon, Netflix and Google) and viewers’ increasing needs for privacy and convenience, which won’t improve at all but will see more and more transferred over to FAANG.

Until regulators or participants in the broader industry understand the importance of separating identity away from big tech, more of the same and worse is how the cookie is crumbling for publishers and viewers.

The Future Attention Economy

What is the solution for a rapidly changing identity and personalization story? Although its early days in this journey, at revealit we see a future attention economy where the viewer is rewarded for their data and attention and we are preparing for it now. We have embedded a digital block chain into our video player that allows us to make fee free fractional payments to viewers whenever they make a contribution to the advertising value chain with their data and attention.

We also believe that the ultimate form of personalization and convenience is to let the user be self-directed and contextual, earning those incentives.

Rather than relying on invasive inference data and questionable data privacy practices, we allow viewers to consume advertising based on their individual preferences and context.

“If personalized targeting goes, then what’s left is contextual. Contextual targeting was neglected long enough in the digital space due to personalization. Now, however, it’s getting more attention both in the media and at trade shows. Regardless of whether cookie-less targeting becomes a major issue, advertisers should put more emphasis on contextual. We’ve done so in other media channels for years. In digital, the crux of anything that tends to do well follows the user.” (9)

Context and viewer centricity are core tenets of the revealit feature set and experience, and its why we’re dedicated to building a new viewer-centric video solution that makes anything viewers see within video shoppable, 100% private (unless viewers opt-in for rewards) and completely cookie-less by default.

It’s going to take a little while to repair the damage that has been done to privacy but I have no doubt this is how the cookie will eventually crumble for viewers.

References

1. Interactive Advertising Bureau, Maru/Matchbox, SpotX https://www.emarketer.com/content/consumer-attitudes-on-marketing-2019
2. OpenX, Harris Poll https://www.emarketer.com/content/consumer-attitudes-on-marketing-2019
3. eMarketer https://www.emarketer.com/content/us-consumers-tolerate-ads-if-theyre-expecting-them-or-theyre-incentivized?ecid=NL1001 
4. Sailthru 2018 Data Privacy Report https://engage.sailthru.com/Organic—Q218—Data-Privacy-Report_Download-LP.html
5. Data breach stats from CSO Online https://www.csoonline.com/article/2130877/the-biggest-data-breaches-of-the-21st-century.html
6. eMarketer https://www.emarketer.com/content/consumer-attitudes-on-marketing-2019
7. What are cookies? https://us.norton.com/internetsecurity-how-to-what-are-cookies.html
8. Safari ITP 2.2 & Chrome Privacy Tools: Sun Setting on the Third-Party Cookie https://www.exchangewire.com/blog/2019/05/20/safari-itp-2-2-chrome-privacy-tools-sun-setting-on-the-third-party-cookie/
9. What Firefox’s anti-tracking update signals about wider pivot-to-privacy trend https://digiday.com/uk/what-firefoxs-anti-tracking-update-signals-about-wider-pivot-to-privacy-trend/