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Why do contextual ads fail?

Mike Elgan | Oct. 7, 2014
Companies like Google, Facebook and Amazon violate our privacy in order to show us relevant ads. So why do their ads miss the mark?

Businessman shooting arrows at a target and failing
Credit: Thinkstock

The issue of the decade is privacy.

We used to have it. We still expect it. But everyone keeps taking it away.

Hackers take our privacy away when they breach the companies we do business with.

Governments take our privacy away when they conduct mass surveillance or industrial espionage.

And companies like Google, Facebook and Amazon take our privacy away when they harvest our personal data and monitor our online and offline actions to serve contextual ads and content to us.

Ironically, of these three major categories of privacy-violating organizations, people are generally most vexed by the third -- tech companies that track us in order to serve up more relevant ads and content -- even though it is, or should be, the least harmful.

Companies whose business models don't depend on algorithmic filtering shamelessly exploit anxiety about companies that do rely on algorithmic filtering.

Apple CEO Tim Cook told Charlie Rose: "Our business is not based on having information about you. You're not our product.... If [other companies] are making money mainly by collecting gobs of personal data, I think you have a right to be worried."

A newish social network called Ello has a "manifesto" that reads in part: "Every post you share, every friend you make, and every link you follow is tracked, recorded, and converted into data. Advertisers buy your data so they can show you more ads. You are the product that's bought and sold."

"You're the product." I'll admit that I've used that line myself. But I've come to believe that it's pretty clearly a misleading and unsophisticated view.

With contextual advertising, you're not the product. Advertisers don't own you. They usually don't even get to know who you are. The companies selling the advertising theoretically (and algorithmically) display ads to you if you meet the advertiser's criteria.

Personal data harvesting for contextual ads and content should be a beautiful thing. Companies monitor what you do, where you go, who you interact with and what your interests are. They do it privately and securely, and it's all automated so that no human being actually learns anything about you. And then the online world becomes customized, just for you. The ads are always the things you want to buy. The services are just what you're looking for. The content is exactly the stuff you enjoy.

It doesn't always work that way, but that's how it's supposed to work.

What's wrong with the public anxiety about this scenario? People are mostly concerned about the privacy violation. But it could be argued that there is no such violation, in most cases. It's really a philosophical question as to whether your privacy has been violated if no human being sees your data.


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