In The Big Short, investor Michael Burry says “One hallmark of mania is the rapid rise in the incidence and complexity of fraud.” (Burry shorted the mania- and fraud-filled subprime mortgage market and made a mint in the process.)
One would be equally smart to bet against the mania for the tracking-based form of advertising called adtech.
Since tracking people took off in the late ’00s, adtech has grown to become a four-dimensional shell game played by hundreds (or, if you include martech, thousands) of companies, none of which can see the whole mess, or can control the fraud, malware and other forms of bad acting that thrive in the midst of it.
And that’s on top of the main problem: tracking people without their knowledge, approval or a court order is just flat-out wrong. The fact that it can be done is no excuse. Nor is the monstrous sum of money made by it.
“Sunrise day” for the GDPR is 25 May. That’s when the EU can start smacking fines on violators.
Simply put, your site or service is a violator if it extracts or processes personal data without personal permission. Real permission, that is. You know, where you specifically say “Hell yeah, I wanna be tracked everywhere.”
Of course what I just said greatly simplifies what the GDPR actually utters, in bureaucratic legalese. The GDPR is also full of loopholes only snakes can thread; but the spirit of the law is clear, and the snakes will be easy to shame, even if they don’t get fined. (And legitimate interest—an actual loophole in the GDPR, may prove hard to claim.)
Toward the aftermath, the main question is What will be left of advertising—and what it supports—after the adtech bubble pops?
Answers require knowing the differences between advertising and adtech, which I liken to wheat and chaff.
- Advertising isn’t personal, and doesn’t have to be. In fact, knowing it’s not personal is an advantage for advertisers. Consumers don’t wonder what the hell an ad is doing where it is, who put it there, or why.
- Advertising makes brands. Nearly all the brands you know were burned into your brain by advertising. In fact the term branding was borrowed by advertising from the cattle business. (Specifically by Procter and Gamble in the early 1930s.)
- Advertising carries an economic signal. Meaning that it shows a company can afford to advertise. Tracking-based advertising can’t do that. (For more on this, read Don Marti, starting here.)
- Advertising sponsors media, and those paid by media. All the big pro sports salaries are paid by advertising that sponsors game broadcasts. For lack of sponsorship, media—especially publishers—are hurting. @WaltMossberg learned why on a conference stage when an ad agency guy said the agency’s ads wouldn’t sponsor Walt’s new publication, recode. Walt: “I asked him if that meant he’d be placing ads on our fledgling site. He said yes, he’d do that for a little while. And then, after the cookies he placed on Recode helped him to track our desirable audience around the web, his agency would begin removing the ads and placing them on cheaper sites our readers also happened to visit. In other words, our quality journalism was, to him, nothing more than a lead generator for target-rich readers, and would ultimately benefit sites that might care less about quality.” With friends like that, who needs enemies?