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What’s Already Hap­pened — Sur­veil­lance, Com­plex­ity, Fraud, and Dis­as­trous Unin­tended Consequences
You could call it the era of the “mega-monop­oly” that siphoned off much of the power and influ­ence of mar­keters world­wide by con­vinc­ing mar­keters to “rent access” to their cus­tomers — and every­body jumped on the “big data, big track­ing, with behav­ioral micro-tar­get­ing cook­ies for dessert.” See the graphic above with the thou­sands of mid­dle­men in the dig­i­tal mar­ket­ing food chain? Mar­keters put their money in one end and what­ever results came out the other — after every­body gets their “cut.”

Sur­veil­lance-based Track­ing (SBT) — after 20+ years, online mar­ket­ing is a $500+ bil­lion indus­try of “sur­veil­lance cap­i­tal­ism,” — accused of mon­e­tiz­ing lying, cheat­ing, steal­ing, manip­u­la­tion, and fraud on a global scale. SBT is sur­veil­lance-based ad tech, behav­ioral manip­u­la­tion, and fil­ter bub­bles that were sup­posed to improve online adver­tis­ing — not gen­er­ate bil­lions for orga­nized crime.

While pro­vid­ing the ben­e­fits of con­ve­nient (sup­pos­edly) “free” ser­vices (search, social, and sell­ing) SBT extracted sig­nif­i­cant indi­rect “costs” from con­sumers, mar­keters, and soci­ety at large in the form of:

Inva­sive Surveillance
Reduced Per­sonal Privacy
Exploita­tion w/o Permission
Destructive/Extractive/Fraudulent Ad Tech Sup­ply Chains
Exploitive Opaque Mega-Monopolies
Value of Per­sonal Data Goes to Third Parties
Increased Sup­ply-Side Manipulation
Increased Infor­ma­tion Asymmetry
Nar­row­ing Choices w/Algo­rith­mic “Echo Chambers”
Increased Cyber Inse­cu­rity (data breaches, hack­ing, ID theft, etc.)
Dis­as­trous Unin­tended Consequences
Pending/Increasing World­wide Regulation

All the com­pa­nies in the top image are mid­dle­men mem­bers of sup­ply chains that feed mainly into two mega-monop­o­lies that take the lion’s share of all global online ad rev­enues. And despite know­ing exactly how would be on con­sumers — noth­ing stood in the way of rev­enue or growth.

SBT is exactly what it says — “sur­veil­lance-based track­ing” where com­pa­nies spy on every­one, every­where, and every­thing, all the time — with­out per­mis­sion, dis­clo­sure, or recourse. Every­thing you do online, every­thing you buy, every­where you go, every­one you talk to or about, is col­lected with the goal of tar­get­ing mil­lions of mov­ing tar­gets and manip­u­lat­ing them into doing some­thing they oth­er­wise would­n’t do. SBT’s stated goal is to elim­i­nate “uncer­tainty” (another word for “choice”).

It sounded log­i­cal enough, and mar­keters bought into the mega-monop­o­lies that unleashed SBT on the world. 21st-cen­tury big tech + 21st-cen­tury big data + 21st-cen­tury AI = more “right per­son, right mes­sage, right time — at the cheap­est cost” — and every­one in the chart was get­ting their “cut” of the new “shiny objects.” (Prin­ci­ple-agent prob­lem.) How­ever, the process remained opaque, its claimed effi­cacy in ques­tion, and it pro­duced some truly . Some believed SBT could cause the destruc­tion of con­sumer choice, pri­vacy, democ­racy, and free mar­kets. “We’re build­ing a dystopia just to make peo­ple click on ads,” with lev­els of com­plex­ity and fraud that mir­ror the 2008 sub­prime mort­gage bubble.

Mar­keters and con­sumers were never told specif­i­cally how the “big data algo­rithms” would be designed or used, nor could any­one have fore­seen the mag­ni­tude of the unin­tended con­se­quences of so much data in so few unac­count­able hands. “Sur­veil­lance Cap­i­tal­ism” had become the default, if not sole, inter­net busi­ness model. Even while experts con­tin­ued to sound the alarm, the mar­keters (the old “Kings”), sur­ren­dered ever more con­sumer influ­ence to the mega-monop­o­lies (the new “Kings”) they funded. (Monop­o­lies are not a good thing if you’re the buyer.)

The mega-monop­o­lies are now pro­duc­ing “smart con­nected devices” that can­not be blocked to observe and report on con­sumers 24/7/365. Con­sumers will be sur­rounded by these “smart-every­thing devices” (includ­ing VAPAs — voice-acti­vated per­sonal assis­tants — Alexa, Siri, Cor­tana, Google, etc.), home secu­rity sys­tems, chil­dren’s toys, smart watches, cell phones, and many more all designed to col­lect per­sonal infor­ma­tion, pack­age that per­sonal infor­ma­tion and rent it to any­one who wants it. All with­out con­sumer knowl­edge, per­mis­sion, con­trol, or recourse. For mar­keters, VAPAs are par­tic­u­larly wor­ri­some, poten­tially cut­ting brands out of the loop when VAPAs select what to buy.

SBT is unsta­ble because it’s an extrac­tive model mon­e­tiz­ing lying, cheat­ing, steal­ing, and manip­u­la­tion of con­sumers. The suc­cess of this model depends on no one find­ing out the real costs, and there is mount­ing evi­dence that SBT does not work nearly as well as claimed.

SBT mar­ket­ing is not con­sumer, mar­keter, or free-mar­ket aligned. By design SBT is extrac­tive, manip­u­la­tive, and depen­dent upon con­sumers being unaware. Include the unin­tended con­se­quences and there is lit­tle upside. Many tech experts, schol­ars, con­sumers, gov­ern­ments, and econ­o­mists believe (The Social Dilemma) that SBT presents an exis­ten­tial threat to democ­racy, free mar­kets, and human rights. And gov­ern­ments are begin­ning to agree by seek­ing to reg­u­late SBT and the asso­ci­ated prac­tices. Here is an arti­cle in the Wall Street Jour­nal about the state of online mar­ket­ing in the 21st cen­tury and one expert’s view of online mar­ket­ing.

As ever more gov­ern­ment reg­u­la­tion and actions against the “mega-monop­o­lies” (Big Tech) increase, mar­keters and con­sumers need some­thing bet­ter — before it’s too late. (“So once again we see a his­toric oppor­tu­nity for an alliance of com­pa­nies to found an alter­na­tive ecosys­tem — one that returns us to the ear­lier promise of the dig­i­tal age as an era of empow­er­ment and the democ­ra­ti­za­tion of knowl­edge.”)

What’s About to Hap­pen — The “Per­fect Storm”
A “Per­fect Storm” is brew­ing of AI, the demise of third-party track­ing cook­ies, and increas­ing gov­ern­ment reg­u­la­tion world­wide — none of which is good news for mar­keters. In order, mar­keters do not have the scale or size to afford a “seat at the AI table” — which will be occu­pied, once again by the mega-monop­o­lies that mar­keters financed in the last go-round (and it won’t be any bet­ter than last time), the true impact of the crum­bling of third-party track­ing cook­ies, is unknown at this time, but it cer­tainly won’t ben­e­fit mar­keters who bought into SBT, and the increas­ing anti-trust and pri­vacy actions by gov­ern­ments world­wide will only add to the uncer­tainty. Mix­ing “unknowns, uncer­tainty, and AI” together with the frenzy that is cur­rently dri­ving AI — what­ever even­tu­ally becomes the real­ity — mar­keters are with­out any alter­na­tives of the scale needed to address the poten­tial out­comes. Until now…

The Only Sen­si­ble Solu­tion — Truth, Credibility and Mar­keters Get Their Power Back
A “credibility opti­miza­tion algo­rithm” gives con­sumers and mar­keters what they both want. Con­sumers get the truth­ful mar­ket­ing infor­ma­tion they want, and mar­keters receive the direct, inten­tional con­sumer con­nec­tion with that truth­ful infor­ma­tion that mar­keters want. A “credibility opti­miza­tion algo­rithm” auto­mat­i­cally max­i­mizes mar­keters’ credibility and mul­ti­plies mar­ket­ing “voice and tone” to amplify all (past, present, and future) mar­ket­ing expo­sures, unlock­ing increased returns from all “past” expo­sures and cre­at­ing a con­sumer “point-of-need” (PON) mar­ket­ing plat­form more pow­er­ful than any “point-of-inter­rup­tion” (POI) ad-based plat­form — where mar­ket­ing is the mes­sage and the media, not the interruption. 

A sim­ple “credibility opti­miza­tion algo­rithm” that auto­mat­i­cally and con­tin­u­ously max­i­mizes a mar­keter’s credibility is the only thing that makes every­thing a mar­keters has done or will do — work bet­ter. Mar­keter gain back the power and con­trol that they have sur­ren­dered to the mega-monop­o­lies over the past two decades and estab­lish a pow­er­ful and per­ma­nent defense against all future “net­work effects” and any AI-dri­ven processes that may reduce mar­keter power and influ­ence. And the only risk is not doing anything.

“It’s time for com­pa­nies to accept that con­sumers have become very savvy and very demanding.
Today’s con­sumer (B2B or B2C) does their home­work, is well informed, and buys…they are not sold,”
Mike Myatt, Forbes Mag­a­zine, May 1, 2012.

  • Online mar­ket­ing today bears a strik­ing resem­blance to the sub-prime mort­gage mar­ket prior to 2008. A quote from Dr. Michael Burry from the book and movie, The Big Short, Inside the Dooms­day Machine, by Michael Lewis — about the sub-prime mort­gage and hous­ing col­lapse of 2008:

    “It is ludi­crous to believe that asset bub­bles can only be rec­og­nized in hind­sight,” he wrote. “There are spe­cific iden­ti­fiers that are entirely rec­og­niz­able dur­ing the bubble’s infla­tion. One hall­mark of mania is the rapid rise in the inci­dence and com­plex­ity of fraud.… The FBI reports mort­gage-related fraud is up five­fold since 2000.” Bad behav­ior was no longer on the fringes of an oth­er­wise sound econ­omy; it was its cen­tral fea­ture. “The salient point about the mod­ern vin­tage of hous­ing-related fraud is its inte­gral place within our nation’s insti­tu­tions,” he added.

    Here are the 5 stages of a Bub­ble from Investo­pe­dia, March 11, 2021 — Dis­place­ment, Boom, Eupho­ria, Profit Tak­ing, Panic.

    Other experts con­firm the same “iden­ti­fiers” in online adver­tis­ing — Adver­tis­ing Age, April 5, 2016; CNBC, June 17, 2016; Medi­a­Post, April 17, 2016; Ad Exchanger, July 15, 2014; The Sub­prime Atten­tion Cri­sis: Adver­tis­ing and the Time Bomb at the Heart of the Inter­net, by Tim Whang, pub­lished Novem­ber 1, 2020.

  • The Wall Street Jour­nal reported that dur­ing a 2018 pre­sen­ta­tion -

    A Face­book team had a blunt mes­sage for senior exec­u­tives. The company’s algo­rithms weren’t bring­ing peo­ple together. They were dri­ving peo­ple apart.

    ‘Our algo­rithms exploit the human brain’s attrac­tion to divi­sive­ness,’ read a slide from a 2018 pre­sen­ta­tion. ‘If left unchecked,’ it warned, Face­book would feed users ‘more and more divi­sive con­tent in an effort to gain user atten­tion & increase time on the platform’ […] 

    The high num­ber of extrem­ist groups was con­cern­ing, [an ear­lier] pre­sen­ta­tion says. Worse was Facebook’s real­iza­tion that its algo­rithms were respon­si­ble for their growth, [find­ing] that ‘64% of all extrem­ist group joins are due to our rec­om­men­da­tion tools’ and that most of the activ­ity came from the platform’s ‘Groups You Should Join’ and ‘Dis­cover’ algo­rithms: ‘Our rec­om­men­da­tion sys­tems grow the problem’ […] 

    Face­book had kicked off an inter­nal effort to under­stand how its plat­form shaped user behav­ior and how the com­pany might address poten­tial harms. Chief Exec­u­tive Mark Zucker­berg had in pub­lic and pri­vate expressed con­cern about ‘sen­sa­tion­al­ism and polarization.’

    But in the end, Facebook’s inter­est was fleet­ing. Mr. Zucker­berg and other senior exec­u­tives largely shelved the basic research, accord­ing to pre­vi­ously unre­ported inter­nal doc­u­ments and peo­ple famil­iar with the effort, and weak­ened or blocked efforts to apply its con­clu­sions to Face­book products

  • The movie, The Social Dilemma (Sep­tem­ber 9, 2020) pro­vides back­ground and inter­views with the tech­nol­ogy experts who all played major roles in the cre­ation of SBM — and who now want to warn the world of the dan­gers — before it’s too late. (Tomor­row­land)

    Tris­tan Har­ris of the Cen­ter for Humane Tech­nol­ogy — “If we don’t agree on what is true, or that there is such a thing as truth, we’re toast. This is the prob­lem beneath other prob­lems, because if we can’t agree on what’s true, then we can’t nav­i­gate out of any of our prob­lems.” (video)

    Jaron Lanier, Found­ing Father of Vir­tual Real­ity — “Finan­cial incen­tives kind of run the world, so any solu­tion to this prob­lem has to realign the finan­cial incen­tives.” (video)

    “We’ve cre­ated a world in which online con­nec­tion has become pri­mary, espe­cially for younger gen­er­a­tions. And yet, in that world, any­time two peo­ple con­nect, the only way it’s financed is through a sneaky third per­son who’s pay­ing to manip­u­late those two peo­ple. So, we’ve cre­ated an entire global gen­er­a­tion of peo­ple who are raised within a con­text where the very mean­ing of com­mu­ni­ca­tion, the very mean­ing of cul­ture, is manip­u­la­tion. We’ve put deceit and sneak­i­ness at the absolute cen­ter of every­thing we do.” (video)

    Shoshana Zuboff, The Age of Sur­veil­lance Cap­i­tal­ism — “A third arena relates to the oppor­tu­nity for com­pet­i­tive solu­tions. Every sur­vey of inter­net users has shown that once peo­ple become aware of sur­veil­lance cap­i­tal­ists’ back­stage prac­tices, they reject them. That points to a dis­con­nect between sup­ply and demand: a mar­ket fail­ure. So once again we see a his­toric oppor­tu­nity for an alliance of com­pa­nies to found an alter­na­tive ecosys­tem — one that returns us to the ear­lier promise of the dig­i­tal age as an era of empow­er­ment and the democ­ra­ti­za­tion of knowl­edge.“1

    “Break­ing up tech­nol­ogy giants,” says Zuboff, “would do lit­tle to pre­vent their smaller prog­eny from con­tin­u­ing their work.“2

    1 Lai­dler, John. “High Tech is Watch­ing You.” Har­vard Gazette, March 4, 2019.
    2 Bajak, Frank, “Meet the Scholar Who Diag­nosed Sur­veil­lance Cap­i­tal­ism.” Asso­ci­ated Press, Decem­ber 11, 2019.

  • Com­ment: If the SBM com­pa­nies really believe con­sumers are so “fine” with trad­ing sur­veil­lance, pri­vacy, and the indis­crim­i­nate sale of con­sumer’s data — why don’t they tell con­sumers what they are doing, get per­mis­sion to do it and allow con­sumers to con­trol who gets their data?

  • Google Search: “EU actions against Big Tech”

    Google Search: “US actions against Big Tech”

    Google Search: “World actions against Big Tech”

    Sep­tem­ber 12, 2023 — United States takes on Google in biggest tech monop­oly trial of 21st century

    August 22 2023 — Face­book owner Meta asks Nor­way Court to Halt Pri­vacy Fine

    May 18, 2023 — Meta fac­ing third fine of 2023 for mis­han­dling user data under GDPR

    March 29, 2023 — Google India fined Rs 1, 337 Crore for Unfair Practices

    Sep­tem­ber 14, 2022 — Google loses appeal against record $4 bil­lion fine

    Jan­u­ary 26, 2022 — Fed­eral Ban on Tar­geted Adver­tis­ing: Joint Bills Intro­duced in the House and Senate

    Octo­ber 20, 2020 — The DOJ just slammed Google with a land­mark antitrust case…

    July 24, 2019 — FTC Imposes $5 Bil­lion Penalty and Sweep­ing New Pri­vacy Restric­tions on Facebook

    4 out of 5 Amer­i­can con­sumers sup­port a ban on “sur­veil­lance advertising.”

     

     

  • Abstract
    Inter­net adver­tis­ing has been the fastest grow­ing adver­tis­ing chan­nel in recent years with paid search ads com­pris­ing the bulk of this rev­enue. We present results from a series of large-scale field exper­i­ments done at eBay that were designed to mea­sure the causal effec­tive­ness of paid search ads. Because search clicks and pur­chase behav­ior are cor­re­lated, we show that returns from paid search are a frac­tion of con­ven­tional non-exper­i­men­tal esti­mates. As an extreme case, we show that brand-key­word ads have no short-term ben­e­fits. For non-brand key­words we find that new and infre­quent users are pos­i­tively influ­enced by ads but that more fre­quent users whose pur­chas­ing behav­ior is not influ­enced by ads account for most of the adver­tis­ing expenses, result­ing in aver­age returns that are neg­a­tive.
  • Abstract
    Inter­net adver­tis­ing has been the fastest grow­ing adver­tis­ing chan­nel in recent years with paid search ads com­pris­ing the bulk of this rev­enue. We present results from a series of large-scale field exper­i­ments done at eBay that were designed to mea­sure the causal effec­tive­ness of paid search ads. Because search clicks and pur­chase behav­ior are cor­re­lated, we show that returns from paid search are a frac­tion of con­ven­tional non-exper­i­men­tal esti­mates. As an extreme case, we show that brand-key­word ads have no short-term ben­e­fits. For non-brand key­words we find that new and infre­quent users are pos­i­tively influ­enced by ads but that more fre­quent users whose pur­chas­ing behav­ior is not influ­enced by ads account for most of the adver­tis­ing expenses, result­ing in aver­age returns that are neg­a­tive.

  • From the Wall Street Jour­nal’s Face­book Files, pub­lished start­ing Sep­tem­ber 13, 2021

    Time and again, the doc­u­ments show, Facebook’s researchers have iden­ti­fied the platform’s ill effects. Time and again, despite con­gres­sional hear­ings, its own pledges and numer­ous media exposés, the com­pany didn’t fix them. The doc­u­ments offer per­haps the clear­est pic­ture thus far of how broadly Facebook’s prob­lems are known inside the com­pany, up to the chief exec­u­tive himself.Time and again, the doc­u­ments show, Facebook’s researchers have iden­ti­fied the platform’s ill effects. Time and again, despite con­gres­sional hear­ings, its own pledges and numer­ous media exposés, the com­pany didn’t fix them. The doc­u­ments offer per­haps the clear­est pic­ture thus far of how broadly Facebook’s prob­lems are known inside the com­pany, up to the chief exec­u­tive himself.

  • 2022 — Data Breaches Break Record in 2021

    2022 — 25+ Alarm­ing Health­care Data Breaches Sta­tis­tics 2021 [And the Largest Health­care Data Breaches]

    2021 — 98 Must-Know Data Breach Sta­tis­tics for 2021

    2021 — Data Breach Num­bers, Costs and Impacts All Rise in 2021

    2019 — Are Data Breaches Increasing?

  • Online Mar­ket­ing — Here’s what’s hap­pen­ing to mar­keters and consumers:

  • Ad Fraud = Orga­nized Crime

  • The Cost-Ben­e­fits

    While pro­vid­ing the “ben­e­fits” of con­ve­nience and lower prices SBT also incurs sig­nif­i­cant “costs” from con­sumers and mar­keters in the form of: 

        • Inva­sive Surveillance
        • Reduced Per­sonal Privacy
        • Exploita­tion w/o Permission
        • Destructive/Extractive/Fraudulent Ad Tech Sup­ply Chains
        • Exploitive Opaque Mega-Monopolies
        • Value of Per­sonal Data Goes to Third Parties
        • Increases Sup­ply-Side Manipulation
        • Increases Infor­ma­tion Asymmetry
        • Nar­rows Choices w/Algorithmic “Echo Chambers”
        • Increased Cyber Inse­cu­rity (data breaches, hack­ing, ID theft, etc.)
        • Dis­as­trous Unin­tended Consequences
        • Pending/Increasing World­wide Regulation

    https://www.cognizant.com/futureofwork/article/the-pros-and-cons-of-surveillance-and-surveillance-capitalism

  • Geoghe­gan, S. (2023, August 8). Data min­i­miza­tion: Reg­u­lat­ing the inef­fec­tive, irrel­e­vant, and inva­sive prac­tice of sur­veil­lance adver­tis­ing. Elec­tronic Pri­vacy Infor­ma­tion Cen­ter. https://epic.org/data-minimization-regulating-the-ineffective-irrelevant-and-invasive-practice-of-surveillance-advertising/

  • Vekaria, Y., Nithyanand, R., & Shafiq, Z. (2022). The Inven­tory is Dark and Full of Mis­in­for­ma­tion: Under­stand­ing the Abuse of Ad Inven­tory Pool­ing in the Ad-Tech Sup­ply Chain. https://arxiv.org/abs/2210.06654

  • Bashir, M., Hayes, C., Lam­bert, A.D., & Kesan, J.P. (2015). Online pri­vacy and informed con­sent: The dilemma of infor­ma­tion asym­me­try. Pro­ceed­ings of the Asso­ci­a­tion for Infor­ma­tion Sci­ence and Tech­nol­ogy, 52, 1–10. https://doi.org/10.1002/pra2.2015.145052010043

  • Andrew, J., Baker, M., & Huang, C. (2021). Data breaches in the age of sur­veil­lance cap­i­tal­ism: Do dis­clo­sures have a new role to play? Crit­i­cal Per­spec­tives on Account­ing, 90, 102396. https://doi.org/10.1016/j.cpa.2021.102396

  • Debatin, B., Love­joy, J.P., Horn, A‑K., & Hughes, B.N. (2009). Face­book and Online Pri­vacy: Atti­tudes, Behav­iors, and Unin­tended Con­se­quences. Jour­nal of Com­puter-Medi­ated Com­mu­ni­ca­tion, 15(1), 83–108. https://doi.org/10.1111/j.1083–6101.2009.01494.x