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Everyone will lose in age of big data and free content, author warns

In a world of big data, advertisers are telling themselves that people will trade privacy for good products. And that is a dangerous lie.

That was one of the messages of Andrew Keen's talk to a roomful of ad agency executives and marketers on Wednesday. The entrepreneur and author of The Cult of the Amateur: How Today's Internet Is Killing our Culture spoke at the Institute of Communication Agencies conference, Future Flash.

"You all know what big data is. You all know that the more people go online, the more we know about them … that's what big data is," Mr. Keen said. "It's the ultimate wet dream for marketers. … It's also the ultimate nightmare. Because the more you know about people, the less trust there is. … People don't want to be known."

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This may seem like an ironic point at a time when people are using social media such as Facebook to broadcast details of their lives every day. But the reality is that as people share more of themselves, they also become more aware of how vulnerable they are – and more protective of their privacy.

That's a problem both for marketers and media companies, which are increasingly moving toward experiments in "native advertising" and "branded content" – two terms for advertising that looks more like what people want to watch and read on their own.

For newspaper publishers, this means allowing advertisers to post ads on their websites that look like articles. They are usually labelled clearly as sponsored content, but the erosion of the distinction between content and advertising is a problem, Mr. Keen said – particularly among younger consumers.

"You may like it … but the readers certainly don't. They'll see through it," he said. "Consumers are not that stupid. They wake up to this stuff and they turn off. … This is an increasingly critical generation."

What has given rise to this, partly, is an online economy that has made advertising inventory nearly infinite – and driven the cost of advertising down. For decades, media such as television and print publications have worked on an ad-supported model. That this system does not translate to the Internet is not news to anyone. But it presents a larger problem for society, Mr. Keen argued: It also cheapens content. When people expect everything to be free, advertising creeps in, in ways that consumers will eventually reject.

The solution is that people need to start paying for high-quality content again – which is, of course, no mean trick. Newspapers such as The New York Times and The Globe and Mail, which have introduced digital subscriptions, are attempting to convince readers of that.

But it is also a good idea for advertisers, not just for media companies looking for a better business model, Mr. Keen argued.

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"The old church-state division between advertising and things that were independent – that was the thing of value," he said. "When everything becomes advertising, nothing is advertising."

In other words, advertising doesn't work.

And people will become more skeptical of the social media economy – where in place of paid-for content, people publish content about themselves and advertisers mine it for data to sell messages back to us. No one is paid for creating that content, the people who own the platforms are the ones who get rich, but in the end consumers' trust and openness to messages is annihilated.

"As we are bought and sold by data brokers … I fear that there will be a true reaction," Mr. Keen said. "You guys will lose, and everyone else will too."

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