The Web was optimized for information exchange much more so than monetization. In fact, when Bitcoin came to prominence in 2013, one of the big drivers of its notoriety was that it was the best candidate so far for what venture capitalist Chris Dixon called an “economic protocol” long missing from the Web. While the Web can routinely handle documents, photos and other media, payments are a different matter, typically requiring a central service or broker to ensure the validity of any transaction.
The consequences of this design have had far-reaching implications for cybersecurity and commerce. There’s the issue of fraud, which merchants and payments processors have dealt with via lengthy forms that often require a full address and CVV number from the back of a credit/debit card.
These measures have dramatic impact on conversion rates – reducing them by 40 percent according to some estimates – but are necessary for curbing fraud. In recent years, new solutions such as Stripe, Apple Pay and Venmo have all been touted for their potential to address the myriad security and convenience challenges surrounding online payments.
Over the long term, though, one of the more noticeable effects of trying to fit the square peg of elaborate payment systems into the round hole of the Web has been to cement advertising’s status as the Web’s main commercial infrastructure. Rather than require users to pay or subscribe to sites, many site operators instead recoup operating expenses by showing display and/or native ads. No transaction is required, money is made for traffic and the arrangement seems to be convenient for all sides, since direct payment systems are circumvented.
The risk and reward of targeted ads: What users pay for an open Web
Advertising is important to sustaining the Web as it currently is, but it has its drawbacks and limitations. For example, in a bid to serve more relevant ads, giants like Google and Facebook have collected enormous amounts of data on individuals and businesses and failed to always accurately target their ads.
Google+ has been essentially a long-term campaign at indexing the Web’s users. Meanwhile, Facebook has sought the Holy Grail of advertising by trying to use the Atlas platform it acquired from Microsoft to match online behavior with offline purchases by matching names and email addresses.
Still, 90 percent of respondents to a recent STRATA online survey of 675 adults reported that ads were incorrectly targeted at times. If people aren’t receiving the most relevant ads, then what are they getting in return for all the data that they’re supplying, willfully or not, to Web companies? For starters, they’re at growing risk of invasion of privacy, particularly on shared devices.
Imagine doing a few Google searches for shoes on a tablet, and then letting friends or family use it later for Web browsing or their own searching. It’s possible that they would come across targeted ads based on what you had searched for, no matter where they went. Many sites are linked by tracking cookies, so a search engine query could morph into an in-stream Facebook ad or Amazon ads on news sites.
It wouldn’t be difficult to infer what other users had been searching for. Plus, these ads are just the tip of the iceberg. The data behind them can include up to 50 attributes on an individual that are used to create highly specific groups such as indebted small town residents.
Back in September, The Economist compared the future of advertising, with this usage of mobile devices, cookies and social networks, to the 2002 film “The Minority Report,” in which intent can be inferred to such an extent that crime can be prevented. It’s a work of fiction and that example is obviously extreme, but it raises questions about how far organizations that sell ads will go in using data to improve their products.
“Underlying privacy advocates’ concerns is the general move toward selling ads based on user data,” observed Vauhini Vara for The New Yorker. “As advertisers increasingly seek to target their ads based on personal information, the company that will be most successful will inevitably be the one that can gather the most information about its users.”
Web advertising, monetization and staying safe
Consumers can take a few basic steps to keep themselves safe:
- Manage cookies: Some ads, such as those from AdChoices, have an icon that can be clicked to opt-out of future displays. Most Web browsers also have options for blocking cookies.
- Enable “Do Not Track”: This setting can stop websites from following you around the Web, but it’s not a panacea since only compliant websites are affected. Alternatively, there are browsers that can be be routed through Tor for anonymity.
- Update security software: With advertising everywhere, everyone must be on guard against adware that may serve malicious targeted ads. Keeping security software up to date helps on this front.
In addition, some tablets have multi-user settings so that what one person does isn’t seen by anyone else. Given the scope and utility of free, ad-supported Web services, it can certainly be difficult for people to balance convenience with privacy.
All the same, it’s important to at least think about privacy. The accumulation of lots of personally identifiable information by Web companies can amplify the effects of data breaches and misuse down the road.
The Web didn’t have to be predicated on ads – Dixon noted that there were Bitcoin-like placeholders in its original design – and it may someday switch to a different economic infrastructure. But ads are what we have for now and we must do what we can to balance their convenience and risks.