Facebook logoThe Associated Press
In the digital economy, people are asked to trade their privacy for services – but it's a bargain that many are making without real consent, because they don't know the scope of how companies are hoarding and profiting from their personal information.
That's one argument Bob Hoffman makes in his latest book, BadMen: How Advertising Went from a Minor Annoyance to a Major Menace. The former U.S. advertising executive – who has worked with brands including McDonald's, Toyota, and PepsiCo among others – has used the freedom of retirement from the industry to deliver scathing indictments of its worst practices through his Ad Contrarian blog. Now, he is taking aim at the web of tracking that props up digital advertising.
You call online tracking "surveillance marketing" and advertising technology a "three-headed monster." Why?
They are dangerous for us as individuals and dangerous for democratic societies as a whole. I don't think most people – even within the advertising industry, and certainly not in the public – realize how widespread the practice is, as far as collecting personal information about us, selling it and exploiting it for business purposes.
But people understand things like ad targeting, they know they're being tracked and advertised to online.
I don't think they realize the scope. For example, there's a company in the U.K. called Cambridge Analytica that says they have a file on every adult in the U.S. with 4,000 to 5,000 data points on every individual. … In The Guardian, a woman wrote that she asked Tinder for all the data they had on her. After arm-wrestling to get it, she got 800 pages of information. That's the equivalent of War and Peace. If Tinder has that much, can you imagine what Google and Facebook have on us? We have no way of knowing what that information is, who they're sharing it with or selling it to. We have always been warned about totalitarian governments. Now, we have totalitarian marketing – they're collecting secret files on us. There's no precedent for knowing where this leads.
That has political ramifications, too.
Here in the U.S., take the Facebook scandal with Russian interference in the election. With the information that Facebook has on everyone, they know what our hot buttons are. That's what makes it so dangerous: that foreign powers and other individuals can target people so specifically. That's all due to their ability to track us – to know who we're talking to, what we're talking about, what our interests are, and what our behaviours are.
The entire internet is built on making money from consumer data. Is it possible to put the genie back in the bottle?
Yes. The EU is trying to come up with a model that might be effective and workable. They have two regulations in the pipeline, which may go into effect in May of 2018, called the GDPR [General Data Protection Regulation] and ePrivacy Regulation. They will give consumers far more control over what information can be collected and shared.
Did you spot the dangers of this when you were still in the industry?
I've been out of the business four years now. When I left, I knew that tracking was going on but I didn't realize how pervasive it was. Nonetheless I was not happy with what was happening in online advertising: We were under tremendous pressure from our clients to get more digital, regardless of whether we really believed it was effective. Otherwise we were labelled Luddites or dinosaurs.
What are the consequences?
I don't think there's any question that we have rushed into stuff and we don't really know what the ramifications of it could be. The fraud is out of control. Ad fraud has grown more than 100 per cent in the last year, it is projected to be $16.4-billion (U.S.) this year, up from $7.2-billion last year. The World Federation of Advertisers says that in the next 10 years it could be the second-biggest source of criminal revenue in the world after drug trafficking. The other issue is waste. Dollars are wasted on non-viewable ads, fraud, and ad tech middlemen who are scraping tremendous amounts of money out of it. And the public is disgusted with online advertising. There are over 600 million web-enabled devices equipped with ad blockers. People hate online advertising, and they're showing it with blocking. And there's the issue of effectiveness – P&G cut $100-million in digital advertising in one quarter, and found it had no effect on sales. Then of course there's the issue of brand safety. Because of programmatic [automated] ad buys, marketers can't control where their ads run. Fake news, we think it's about political operators, but it's also largely about the idiotic ad tech system that gives money to people who can propagate the most sensationalistic and fraudulent rubbish. They get people to go to their websites … and ad tech takes money from quality publishers and follows people to crappy websites. If you pick up the rock of ad tech, all these issues are crawling around underneath. Tracking is a factor in all of these issues.
So what can people actually do, save for setting their digital devices alight and moving to a shack in the woods?
Consumers should have at least as much power as marketers have online. We all have a different tolerance for privacy. Some people care more than others. I want us to be able to control how our information is used. It's not that difficult. You can have my credit card when I buy something from you, but I should be able to dictate that I don't want you selling that to third parties, I don't want you using it for advertising purposes.
Companies like Facebook and Google say you can already control that information – it's right there in your account settings.
My response is that it's way too complicated for the average person to understand. If they were really serious about it, they would make it clear. They would make it easy. They wouldn't hide it behind pages and pages of vague language and incomprehensible terminology. It's really hard for an individual to comprehend the vast web of how this stuff is sold and shared and gathered.
Do we need legislation in order to make that happen?
Absolutely. I'm not heavily in favour of regulators or bureaucracy. But in this particular case it's essential that somebody step in and do something about this, because it's getting far too dangerous. It's more than just online advertising now. There are so many gadgets collecting information about us. We have smart thermostats, smart cars. It's only going to get worse if we don't do something about it.
This interview has been edited and condensed.
Susan Krashinsky Robertson