A few weeks ago Aaron Gustafson wrote a post explaining how third-party widgets can compromise user privacy by tracking users’ browsing activity. It’s something many developers are familiar with but Aaron took the additional step of detailing a roll-your-own solution for popular third-party widgets. It’s good. If you make websites you should check it out.
The shadowy transmission of user data that Aaron mentions raises concerns for multiple reasons. For one, end users have an interest in protecting their own privacy. Two, people who make websites have an obligation to protect user privacy for the benefit of their users (to what degree they are obliged is of course the subject of much debate).
There’s a third case that gets less attention, and it has to do with the interest that audience-monetized websites have in protecting user data for their own benefit. And I don’t mean it in the sense that honorable websites that look out for their users will be rewarded by appreciative customers. I’m referring to the importance of not letting valuable audience data escape to your competitors’ servers. That’s what this post is about.
First, I’ll restate the problem and concerned parties so you can decide if this is something you’re interested in.
Problem: Adding third-party widgets like Facebook’s Like button and Twitter’s Tweet button to your site opens up a one-way channel of data transmission between your site and the widget provider. This data allows the widget provider to know which pages on your site their users view.
Who should care about this: In the broadest sense, anyone who works on digital products. In particular, digital products with revenue streams dependent on providing third parties access to audiences. More particularly, products that generate revenue from advertising. Most particularly, the publishing industry, who, having spent the better part of the last decade hoping the internet would go away, is most vulnerable as it tries to wobble up off the mat.
What’s the big deal if Facebook knows that one of their users viewed certain pages on your site? Let’s get into it.
Free content cannot be monetized
First off let’s agree that free content is never monetized. Content you give away for free has no exchange value. That’s why it’s free. You can, of course, make lots of money offering free content by monetizing the audience that consumes your content.
Niche media markets provide an easy way to illustrate how this works. Imagine you’re in the business of selling vintage gumball machines to gumball machine enthusiasts. How do you get exposure to the small group of people interested in your product?
Ten years ago you would buy an ad in a print publication aimed at gumball machine enthusiasts. The publication would contain all sorts of interesting content for people who love antique gumball machines but the person paying for this whole operation—you, the advertiser—would obviously not be paying for the content but for access to a particular audience. And access to that audience would be worth a lot because how the hell else are you going to find those people?
For the publisher this is all good until someone else slithers into the market with a competing publication and offers access to the same audience for less.
OK, so this is Publishing 101, Advertising 101, nothing new, you already know this, everyone who works in the industry already knows it. And yet…
Who are we competing with?
Last year a financial institution invited a handful of media companies to their offices to talk about an upcoming rebranding campaign. I was in attendance and the list of invitees was made up of standard players like The Economist, Dow Jones, and Time. But there was one name that stood out from the others: LinkedIn.
I was delighted because LinkedIn’s name on the schedule was proof of something that I and one of my tech colleagues had been trying to impress upon others for awhile—that social networks like LinkedIn and Facebook are not partners with media companies, but competitors.
At first the response from some of my colleagues was one of confusion. “LinkedIn? Why are they here?” What was surprising was how quickly the confusion was dismissed and the threat shrugged off. Here we were competing for the same advertising budget on the same afternoon and yet they could still not see a social media company as a competitor. Now I was confused.
After a little discussion the answer emerged: “Yeah, but LinkedIn doesn’t write news.” Right. So as long as LinkedIn doesn’t start writing news we’re all good. Hmmm.
One of the very best pieces I’ve read on the state of online journalism is a recent article by Stijn Debrouwere titled Fungible. If you’re unfamiliar with the term, a fungible object is one that can be exchanged for another object of identical substance and value.
The article’s thesis is that “…journalism is not being disrupted by better journalism but by things that are hardly recognizable as journalism at all.” Stijn writes about how sites like Quora, Wikipedia, IMDB, and EveryBlock now fulfill many of the needs that people used to turn to journalism for. Audiences are exchanging journalism for non-journalism. And the thing is that they’re not exchanging it for something else, but for something that amounts to the same thing. (That’s the fungible part.)
So again, it’s audience and not content that is the true business asset. Your audience, whether it’s a literal database of registered users or a free-roaming anonymous swarm of eyeballs (as is the case with most free content sites) is the thing to guard.
Mark Twain said, “Put all of your eggs in one basket—and watch that basket!” Media companies already have all the eggs in the audience basket. How well are they watching it?
Take the gumball machine example again but fast forward to the present and swap roles. Now you’re the publisher of GumballGuru.com and companies buy advertising on your site to gain access to your audience. On each of the pages on your site you have a Facebook Like button that reports back to Facebook which of their users are regular visitors to your site. This allows Facebook to build a database of people interested in gumball machines. The like button earns you some traffic from Facebook. Woot. But in exchange, you hand over your users. You squander your eggs.
Now your advertisers have another way to reach their target audience. Instead of buying ads on GumballGuru.com—as well as on your competitor GumballManiac.com—they can go to Facebook and purchase ads targeted at both users who like GumballGuru and GumballManiac. And they can do this at a much better cost.
By the way, if you don’t know, this is a real thing. You can go to Facebook today and purchase advertising exactly this way.
The sad thing is that publishers have been an accomplice to a heist they don’t yet realize they’re the victim of. It’s true that Facebook can collect this sort of data in other ways but they could never gather it so quickly and in such detail without cooperation from sites that did the hard work of building the audiences in the first place.
It’s not the end of the world
I’ve painted a stark picture and admittedly reached out to extremes in an effort to clearly illustrate the problem. Not all media outfits are critically exposed to this threat. Advertisers and media agencies are not shifting their entire budgets to Facebook and LinkedIn tomorrow. There’s still question about the value of social network advertising. Journalism still has value and publishers are still more than capable of cultivating important relationships with their audiences. Facebook is not going to replace The New York Times (although it may replace GumballGuru).
The goal of this post was to draw attention to two ideas. One, that in a digital world, data about your audience IS your audience. And two, that data on the web is incredibly exposed and prone to being shared in ways even the people building the websites aren’t aware of.
What’s the solution? I have no idea. Building a fence around your product isn’t the answer. Probably the best thing to do is to continue to focus on building products that solve problems for people. Products that people will pull into their lives. While at the same time being aware of who you’re competing with and who you’re sharing data with.
That should make for a good start.