Carl MortishedNick Ray
You can always rely on a James Bond movie to reinforce an urban myth. In the recently launched Spectre, Britain's security agencies, MI5 and MI6, have been infiltrated by an evil genius bent on world domination using digital surveillance; once again we are reminded that government is out to get us and only a rebellious superhero can save the day.
Back in the real world that most of us inhabit, government remains ignorant and mainly ineffective. Commercial organizations, on the other hand, have become remarkably good at monitoring and logging our behaviour, amassing terabytes of data which can be manipulated for the purpose of corporate aggrandizement: that is to say, acquiring even greater market share, eliminating competition and accumulating profit.
For Apple, Google, Facebook and their brethren, the game is nothing less than world domination and these organizations have a better chance of succeeding than any national security agency you could mention. The Internet barons understand that channels of communication are levers of power. Control the channels and you control access to the customer.
Instead of telling us what to do, Facebook and Google ask us what we would like to do. Then, they watch us do it and carefully log what we do, storing the data in huge server banks in secret locations around the world. Then, they strike commercial deals with other organizations which have an interest in what we like to do. Not since before the Industrial Age has commerce been able to focus so intently on the minutiae of the individual customer's quirks and tastes.
However, there is a curious flaw in the business model which could wreck or at least stymie their plans for global domination. It is digital advertising, the prime revenue source for companies like Google and Facebook.
Suppose you want to buy a new vacuum cleaner. Your search of the websites of a few electrical goods suppliers and price comparison sites is carefully noted and stored in the "cloud." This knowledge can be mined by advertisers and you will henceforth be bombarded with vacuum cleaner ads.
It's called programmatic advertising. Space on a newspaper Web page or on Google search pages is sold at digital auctions on automated exchanges where advertisers can bid for ads that target very specific audiences – teenagers interested in hip running shoes, young singles interested in beach holidays in the Caribbean, retired people who like gardening. It's what chief marketing officers in consumer companies have always wanted – intimate conversation with an interested customer rather than a roadside billboard or a TV commercial's 30-second lecture to a random audience.
There are no foolproof ways to measure the effectiveness of advertising and Internet click rates just add to the confusion. Facebook encourages you to "like" things but it doesn't mean you will pay money for them. Meanwhile, technology is adding confusion and the potential for fraud; Google was recently forced to admit that it was charging advertisers for clicks on YouTube videos even when its systems had identified that the viewer was a robot.
Finally, and this may be the nail to seal the coffin: ad blocking software that allows you filter out annoying advertising or even all advertising. Its arrival was at first greeted with nervous dismissal by the media and advertising fraternity but the volume of users is soaring and the advertisers have noticed. According to Unilever, ad blocking has put advertising into crisis: "Consumers have the ability to skip ads, and given the option, they will"
So self-adoring is the media and Internet fraternity that its members fail to notice the irony. Consumers are demanding that the power that was promised by the Internet is restored to them. Social media companies promote their channels with the promise that it is all about you, your profile and your friends. They can hardly complain when the users block the intruders.
Moreover, it is becoming apparent that even if the Internet is a great medium for finding and communicating data, it is a lousy channel for promoting big ideas, like brands. You need space, a big stage and a large audience to generate the goodwill to promote a new car; television is still the medium that matters. What you get on the Internet is a lot of isolated and anxious people worried about how they appear in their Facebook profile.
Of course, the Internet barons won't tolerate this rebellion without putting up a fight. Martin Sorrell, the chairman of ad agency WPP, suggested that Google could simply put an end to ad-block software by stopping its users from gaining access to YouTube. However, I suspect they will do something more canny and, in the end, more sinister. Indeed, it is already happening and it is all about aggregating and colonizing the places we like to go and the things we like to do. Facebook and Apple have both developed news services that feed stories from media organizations, tailored to the user, anticipating content preferences and subject matter that appeal to the user. In the end, big media organizations will have little choice but to throw in the towel and collaborate with the social media channel controllers in generating and sharing revenue from advertisers and users.
You don't need a government security agency to achieve world domination; you just need to control access to the things we like to do. And there is nothing that James Bond can do about it.
Carl Mortished is a Canadian financial journalist based in the U.K.
Carl Mortished