Friday, February 20, 2009

Don't Police Privacy, Just Pay People!

In case you've been under a rock the past couple weeks, there's been quite the uproar over online privacy in the press.

On Feb. 4, Facebook announced changes to its terms of service including its data retention policy, which the Consumerist interpreted as Facebook basically saying, "We can do whatever we want with your content. Forever." This prompted some indsutry "watchdogs" to ask, "Is Facebook really using its new terms of service to own your data?"

Sure enough, one week later, Mark Zuckerberg caved to the pressure and reverted back to the old terms while it sorts out this mess.

Meanwhile, the FTC put out a 55-page report on "Self-Regulatory Principles for Online Behavioral Advertising." Many privacy "advocates" say that these guidelines are not sufficient -- Wendy Davis at Media Post has a nice recap of the debate.

Then, a couple days ago, came word that mobile network operators in the UK are going to be selling behavioral data to advertisers. This, no doubt, will set off a firestorm among the populace across the pond.

Why does everyone keep missing the boat here? The way to get consumers comfortable with sharing their data with marketers is not by changing terms of service, imposing self-regulation of opt-in/outs or unilaterally deciding to sell it to advertisers.

As I proved in my Highly Targeted experiment, the best (dare I say, only?) way to get people to part with their beloved data is to pay them for it. There is no quid pro quo in sharing data to receive targeted advertising. People don't want targeted advertising. Sure, if they're going to get bombarded with ads anyway, they'd prefer they be relevant but they'd really rather get no ads at all.

I can think of no better economic stimulus plan than paying consumers for sharing their data. Who needs a one-time tax break when you could be pocketing $20+ a month for looking at targeted ads?

Allow me to show my work...

There are roughly 240 million people over the age of 14 in the U.S. And there is about $3.3 billion spent on advertising each month in the U.S. (for the top 10 categories not including Internet or B2B ad spending). Add in the $1.6 billion spent on online advertising in the U.S. each month and you're looking at $4.9 billion it total U.S. monthly ad spend (again, not including traditional ad dollars from categories outside the top 10 and B2B).

If we cut out the media companies and gave those dollars directly to consumers in exchange for viewing (and rating) ads, every person over the age of 14 in the U.S. could net a minimum of $20 per month in perpetuity.

Forget a CTO, the Obama administration needs a Chief Advertising Officer. Hey Barry, call me!

1 comment:

coffee buzz said...

the fact that Facebook change their TOS back so quickly is an indication that they knew they were wrong in the first place

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