You are not an eyeball: Why tracking is the ad biz’s last gasp

Marketers are following you around on the Internet. They don’t know your name but they know what you do, what you buy, where you buy it, what you’re interested in, and more. The sites you visit collect this information on behalf of networks that then roll you up with other like-minded people in packages, as if you were a subprime mortgage, and sell your eyeballs to advertisers.

People inside the Web industry generally know all this and take it for granted. People outside mostly don’t. That explains some of the wide variation in reaction to a big package the Wall Street Journal published Saturday that chronicles how advertisers track users online.

I found it fascinating that two of the smarter Web veterans I know — Jeff Jarvis and Doc Searls — arrived at opposite perspectives on the Journal coverage. How did that happen? Let’s climb what I’ll call the ladder of reaction to this story, and we can see.

At the bottom rung, we have a simple everyday reader’s freakout. OMG They’re spying on us! This, it seems to me, is the level at which the Journal’s coverage was pitched. It’s full of loaded language: A headline that refers to “your secrets.” References to “surveillance” and “surreptitious” practices. Repeated use of the phrase “sophisticated software” to describe run-of-the-mill stuff that we’ve lived with for years, like the cookie files invented at the dawn of the Web by Lou Montulli (and that anyone can easily delete from their browser).

On the next rung up the ladder we have what I predict will be the response of the punditocracy, the editorial page writers and columnists. They will weigh in early this week, shake their heads in disapproval and demand that the government step in and pile more privacy regulations on the Internet advertising industry.

This will drive the Web industry insiders — up on the ladder’s third rung — even crazier than the Journal feature itself did. For them, the activities the Journal describes are simply old news. This is where we find Jeff Jarvis, who described the Journal feature as “the Reefer Madness of the digital age”: “I don’t understand how the Journal could be so breathlessly naive, unsophisticated, and anachronistic about the basics of the modern media business.” Similarly, Terry Heaton found the Journal’s coverage biased and behind the curve: “It’s like somebody at the paper had been sleeping for ten years and woke up to discover it’s the year 2010!”

Insiders will worry that an anti-tracking backlash might throttle the Web advertising industry at just the moment when big media institutions are praying that online ad revenue might help them make up for all the ad income they’re losing in their offline businesses.

Even more important, they will argue that tracking isn’t an invasion of privacy at all, since the advertisers mostly don’t know you by name or personal identity. Instead, they see you as a bundle of demographic traits and acquisitive tendencies. We owe the maintenance of this important distinction to an ad-tracking scare of a previous era, the great DoubleClick/Abacus controversy of 1999. Yes, this issue has been with us since 1999, which does make you wonder about the Journal’s breathless tone today.

The most important argument the insiders make is the very simple one that tracking, done right, actually performs a useful service: It helps reduce your exposure to ads you don’t care about and shows you more ads that you actually want to see.

This brings us up high to rung number four, where we meet Doc Searls, who is sitting on his own little platform that he’s built over the years, and inviting us to sit down with him and listen.

And he’s saying to the Web insiders: You guys are missing two points. The first is that “most real people are creeped out by this stuff,” even if it is old hat to you. The second is that you aren’t thinking big enough if you think that tracking users’ behavior is the best the Web can do.

You think the Web is all about making inefficient advertising more efficient, when it’s really about eliminating advertising as we have known it entirely, by giving us “better ways for demand and supply to meet — ways that don’t involve tracking or the guesswork called advertising.”

Searls has been elaborating this argument from the early days of the Cluetrain Manifesto to his current work at Project VRM. He’s saying: We know ourselves and our needs better than any third party’s guesswork. The Internet can enable us to speak directly to the marketplace about what we want. We can have a direct conversation with vendors of the things we are thinking about purchasing:

if I had exposed every possible action in my life this past week, including every word I wrote, every click I made, everything I ate and smelled and heard and looked at, the guesswork engine has not been built that can tell any seller the next thing I’ll actually want… Meanwhile I have money ready to spend on about eight things, right now, that I’d be glad to let the right sellers know, provided that information is confined to my relationship with those sellers, and that it doesn’t feed into anybody’s guesswork mill.

I find Searls’ vision appealing, even as I recognize the disruption it portends. The end of advertising also means the end of the business of delivering eyeballs to advertisers. It means that creative people and journalists and other “content creators” will need to abandon the old media’s compromised triangle trade (with creators ferrying consumers to advertisers) and learn how to fill public needs directly. That means we’ll need new ways to fund public-good information (foreign news, accountability journalism, investigations) once we can no longer pay for it with the overflow from advertising-monopoly profits.

That’s the future. Today, I actually think the Journal is doing a public service by writing about stuff industry insiders already know about — even if the paper went over the top in its intimations of dark marketing conspiracies. But it would be so much more of a service to look beyond the desperate thrashings of the badly wounded ad industry — and toward the better model that is struggling to be born.