Observing Thinking

Observing Thinking
Observing Thinking

Friday, May 11, 2018

Whose data is it anyway?

Facebook was recently taken to task at a Senate hearing investigating their (lack of) privacy regulations that allowed a client to place a personality test on the Facebook website that not only used the results to target them with political ads that were (supposedly) based on their personality profile during the 2016 election. Not only that, the questionnaire was automatically shared with all of the subject’s friends, resulting in 87 million people who gave their personality profiles (which another company used to predict their voting inclinations) without any permission to do so by the subjects. So one of the questions raised was: did these targeted ads influence the 2016 election? In theory, Targeted Ads are more effective than random ones.

There was a recent cartoon in the New yorker magazine showing a man missing one shoe sitting in the subway next to a sign that reads, “Shoe for Sale” Now that’s targeted advertising!

For a very nice analysis of this very complex situation, see the graphical explanation at

Vox.com and search there for “cambridge analytica” and select the article that has the words “simple diagram”. Next search on “microtargeting” on the vox website for further exposition and implications.

The root of the problem seems to be that the Facebook business model is built on selling advertisement space through its platform and it can sell more space and make more money if it can provide advertisers with targeting information from a user’s profile (data that most users believe is private). But what wasn’t discussed much at the hearing was that Google’s 2017 ad revenue is estimated at around 95 billion dollars while Facebook’s revenue was (only!) about 40 billion. Together they represent about 60% of the US advertising market. While this is not necessarily a bad thing, it does raise the spectre of a duopoly which while seemingly only half as bad as a monopoly, will stifle free market competition.

Facebook’s strategy is to sell other companies its user profiles so the companies can target their ads more effectively, Google use a different strategy.

Imagine that it’s raining and you’re in a bus shelter waiting for your bus. Notice all the advertisements plastered on the walls. What sort of ads would you expect to see in a bus shelter? Certainly not ads for a Mercedes because most of your bus shelter audience is waiting for a bus and could not possible scrape up the cash for a luxury car. Well, as Investopedia puts it: “Google is the world’s largest bus shelter” and goes on to explain how Google makes money :

“Say you run a small company - a bakery located in Topeka, Kansas, for instance. It's safe to say that people who would Google the words "Topeka" + "bakery" would likely patronize your business. Buy an ad on a page that'd be visited only by people who are looking for a Topeka bakery, and you're targeting about as accurately as it's possible to target a potential clientele. “

This may seem somewhat abstract so let’s take a more concrete example. As an experiment I used Google to search on “tennis” and got a list of the sites you would expect from such a simple search, However, preceding them were four advertisements from businessinsider.com, tennis.com and espn.com and, not unsurprisingly, from Bayside Tennis and Health Spa right here in the good ol’ burgh which lets me know that Google knows where I live --- in a good sense, in a good sense.

But wait, there’s more. Scrolling down some more are four more Plattsburgh-related ads from: Plattsburgh High School, Plattsburgh City Recreation, Fred Villari’s Studios and Plattsburgh YMCA, followed by a cordial invitation to click on a link to “5+ more”. Not to mention pics of “Videos you might like”. Oh ... and two more “From the Web”,

You say you’re not satisfied, you say you want more examples ? Well, above the Business insider ad was the blue text, “This is everything that tennis icon Roger Federer eats and drinks for breakfast, lunch, and dinner” meaning that it was a link to another page. So I clicked on it which took me to another page with (you guessed it) more and newer ads starting with, “Today’s Mortgage Rate was 3.75% (in 48 point font) and inviting me to use its mortgage calculator which I did not click on because I had a pretty good idea where all of this was heading.

If you, dear reader, were to do the same search on “tennis” I would bet that the results would be somewhat different because Google has different profile data on you than it has on me( e.g. my zip code (very useful for targeting voting ads)). Google claims that your private data is not directly linked to you but to various categories that your profile suggests you belong to and they only “know” the IP address for your search source and destination. This is what they say.

So what can be done to insure that users of services like Facebook and Google can protect their privacy or is this the price we all must pay for the “free” service they provide?

Stay tuned.

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