Solving the Social Dilemma

I’ve just finished my article on my response to the Netflix documentary, ‘The Social Dilemma’. I ran a small survey to help me in the writing of this and results are still coming in so there may be some further additions and editing to be done but I wanted to get this first version out there and see what people think. Please let me know.

Solving the Social Dilemma

The recent release of Jeff Orlowski’s documentary ‘The Social Dilemma’ on Netflix may prove to be an even bigger deal than their 2016 film ‘The Great Hack’. The latter left you feeling that the villains of the piece were the businesses like Cambridge Analytica who malevolently manipulated social media data to change the political narrative, influence elections and threaten democracy. TSD points the finger squarely at big tech who purposefully design social media to feed their commercial model and in the process fuck up society and the whole of mankind.

 “If you don’t pay for the product, you are the product”.

Social media is not just abusing their tech to sell us stuff, they are selling us – our attention and our behaviour – without us knowing and to our detriment. TSD paints a scary future with overtones of the human batteries in The Matrix and Skynet from Terminator – AI may have started as a technology tool we used but it might become us that are the tools serving the needs of higher artificial intelligence. You think this is fantasy? Watch the documentary.

“Only two industries call their customers ‘users’: illegal drugs and IT” said Yale’s Edward Tufte.

Marketers (who pay for all this with their ad budgets) are trying to wean themselves off calling customers ‘consumers’. (If you drop the ‘m’ consumer is an anagram for ‘con user’). I think ‘people’ would be the best word because it simultaneously captures diversity and common humanity – the ‘we’. But I don’t think the lexicon is the issue and in fact I don’t think marketers or even the titans of big tech are the villains. They are people. A lot of the contributors to TSD, people like Tristan Harris or Justin Rosenstein, are from big tech. They have a conscience and know that many of their former colleagues do too. Marketers are not evil svengalis. They are paid to promote their products but most recognize that this increasingly means doing so in a sustainable and socially responsible way because that is what society wants. It is what will make their customers happy and they like happy customers. So what makes good people in marketing and tech do bad stuff? Two things:-

  1. Not recognizing the unintended consequences
  2. Not having a commercially attractive alternative

On the heels of ‘The Great Hack’, TSD can address the former. As ‘Inconvenient Truth’ was for climate change, this is a tipping point in the debate about social media and the issues around the misuse of the data it generates for the ‘attention extraction’ industry. We all know that something is wrong, we all know this is seriously fucked up and heading in a bad direction – but what is the alternative? What is the antidote? TSD is incredibly powerful and disturbing, very disturbing especially as it leaves you in no doubt things need to change but not much hope they will and no real solutions other than regulation (of some sort not defined) to disrupt the business model on which big tech has thrived.

Just as I concluded in my paper ‘Naked Economics; the new laws of the jungle’ the easy conclusion is that governments need to fix this – ‘they’ need to regulate. Easy but wrong because even if ‘they’ wanted to, ‘they’ can’t. It’s too complex, there is too much vested interest and there is no ‘they’. The legislation would need to be intricately drafted to cover every issue and avoid every unintended consequence. There are $ trillions at stake so expect some resistance and every government would need to act in lock step which they won’t/can’t.

So, as with the new economics, let’s focus on ‘we’ –  what we the people can do about the social dilemma that is social media data harvesting, processing and commercial application. For the wider economic context the macro levers to pull were the attribution of cost and ascribing of value to enable us to make better choices. In the specific area of data the micro levers are platforms that allow us as individuals to own, control and transact our own data.

The solution lies not so much in regulating the current business model, although that might have a role to play, but rather in creating a new business model that empowers people.

At the heart of the current model is data about 3 things:-

  • What you think
  • What you do
  • The connection between these

The tech, the algorithms, the UI and the AI that are all designed to do this can of course then be applied to change what you think and do, to get your attention and to persuade you. The business model is then to monetize this by selling it to people who wish to promote their business. It can also be sold to people wishing to change your politics but that will only ever be a small fraction of the billions social media earns. The big bucks come from big business.

The global industry for advertising and research is roughly $1 Trillion. That is how much business will pay to find out what you think and present the best version of themselves to you at the most opportune time.

What if we just told them? What if we offered the information they want to know and stuck our hand up when they had the best chance to sell something to us? Because if we did, en masse, then the revenues for facebook et al would start to evaporate.

Who would be prepared to do that? We all would. We do it all the time for purchases that are important to us and about which we are unsure. Say we want a haircut, a new car, expensive cosmetics, a new home, a piece of home electronics, a suit for our wedding. We pitch up, tell someone we are interested and then proceed to tell them everything they need to know about our lives, quite often more than they need to know. Yes we may do some research on-line and then purchase on-line but there are still many things where we meet people face to face, people that we know are there to sell us stuff, we tell them we are interested and we answer pretty much any question they care to ask. Why? Because it is in our interest to do so and we get something in return – help in making our best choice.

As long as we feel in control of the exchange of our information, our attention, our data, and this has material benefit to us we are happy to give business what they want.

I have been thinking about this for the last 5 years and I have ideas for two potential tech based platforms that would allow people at scale to exchange their ideas and their data – on their terms – with businesses and brands. These could divert a big chunk of the revenue Social Media generates directly into the hands of us, we the people, and offer what business wants quicker, cheaper and more effectively.

It would not stop the potential of big tech to produce addictive, manipulative social  platforms with the power to affect peoples’ physical and mental health, to undermine truth with fake news, to divide society and swing elections but it would take away their incentive to do so. They would eventually be left with only one option which is to make you pay for their service – and if we pay for it then we control it. It becomes the product, not us.

Let me know if anyone is interested to know more……..

Solving the facebook problem

Facebook are in the firing line yet again. Several large advertisers are boycotting them for publishing hate speech – these are big names like Unilever, Diageo, Pepsi, Starbucks. It will concern facebook, they will probably dial up their investment still further in an effort to stamp this out and their spokespeople will double down on on their well crafted defence based on that. “We are making every effort we can, it’s a tiny minority but while there is hate in the world there will be hate on facebook” I heard one say today. After all ‘we’re just a platform not a publisher per se’. There is one obvious solution which is to declare them to be a platform that publishes and impose the same kind of legal restrictions that apply to other media platforms/publishers/broadcasters. Admittedly these restrictions are not perfect. They differ from country to country, some are exercised through government watchdogs and others through a licensing system. If we go down this route the licensing option is the most effective – break the rules and you lose your license to trade, it is awarded to someone else. Can this be operated for the web – of course it can. Not every country or territory would sign up but if enough did it would flush out very quickly whether facebook were “doing everything we can”. But I think there is a better solution which takes the advertiser boycott to its logical conclusion. Reduce facebook ad revenue to zero by making it redundant as an advertising platform and forcing it to charge for its service. Facebook generates $70 billion in revenues from advertising and its costs are roughly $46 billion. But of course a great deal of its costs are incurred to generate the ad revenue. How much would they be if they focused purely on running a really good social media platform? Let’s take a stab – half? So how much would they have to generate from user subscriptions? About $7.50 per user per year. At $10 p.a. they’d be making a very decent $7 billion operating profit. It’s not quite as simple as that but the point is valid – there is a different business model available to facebook or other competing social media platforms. The challenge is how to force them to look for it. Well that is simple – take away their data advantage by creating platforms that allow people to transact their own data.

It has been estimated that your personal data – what you like, where you go, what you buy, what you watch/read/listen to etc – just as much as you want to share is worth $7,600 p.a. on average to you. Much more for high nett worth people, less for the less well-off but arguably more important. If you only earn $25,000 a year then an extra $2,500 for your data is very attractive (this has been proved – people in emerging markets and students are far more willing to sell their data or attention or opinions). Facebook’s model is based on them taking the commercial advantage for having thousands upon thousands of data points on you. The technology exists to allow you to cut them out the loop and transact your own data with whosoever you choose for your own gain.

With no – or at least much lower – ad revenue facebook and their ilk would have to find a better business model, one where people only hand over their money if they appreciate both the service and the ethics of the business. Would you renew your subscription for a business that allows hate speech or pushes content to you in irresponsible ways? No need for government intervention or business boycott’s – problem solved by giving people the rights to their own data and the means to transact it however they choose.

Hand in the Cookie Jar

Readers familiar with my blogs (how are you both?) will know just how much I dislike ‘digital advertising’. I know it works because advertisers continue to invest in it which must mean it has a ROI of a few percentage points. But that in turn implies that for the vast majority of us, most of the time it is nothing but an irritation. I pay for a few on-line subscriptions to papers and magazines – should I have to look at ads? No different to the physical publications you might say. The model has always been that content is delivered free or heavily subsidised because of ads. In the new model the content may be on-line and it might be the services of a search engine or social media platform but the deal is the same. Ad revenue keeps the cost of your on-line content down and in the case of google and facebook the ads pay for the whole thing. On that basis we should extend the model to include churches, museums, art galleries – why not hospitals? You can go to church for free as long as you are prepared to let someone sell you life insurance. By all means look at the Monet but right next to it, in your eye-line, is an ad for french cologne. While you are waiting for your test results who would object to looking at some ads for a betting company – hey, life’s a gamble. NO, there are just some places and some occasions when I don’t want to have to see ads. And I particularly don’t want to see ads put there because someone’s been sneakily following me around all day watching my every move. So in my case at church, or the museum or in the doctor’s waiting room I get an ad for a car just because I happened to mention to a friend that I liked it or paused to look in a showroom window. That is beyond irritating, it’s plain rude.

I reached a tipping point this week. As I was reading on-line I was being bombarded with ads for backgammon boards – and I mean bombarded. They were not just there, they were flashing and rotating and popping up in the middle of the articles. I knew why – I’d been on a couple of sites looking to buy a backgammon board. I’d done my research, made my choice and the board had been purchased. I wasn’t really in the market for another backgammon board, you really only need one, but yet here I was getting hit by ad after ad all over the sites I visit. I know why, it is because Criteo, the French Ad tech business use 3rd party cookies to track me and sell that information to advertisers and their agencies. They profit from this transaction but I don’t. Turns out it is actually possible to disable them, which I did and the pushy creepy ads disappeared . Some algorithms are doubtless still at work but there at least seems to be some randomness to the ads. If they happen to be for something that interests me I’ll click. I did that recently for ‘Forever Spin’. I have a childish fascination with spinning tops and often spin coins or rings to see how long I can get them to keep going. ‘Forever Spin’ tops go on for ages (but not forever) and actually I might buy one. However, before I switched off Criteo I was going off them as a company due to the incessant ads they were targeting at me. Do you, like me, walk out of a shop if a sales assistant just won’t leave you alone? Normally you can tell them that you’re just browsing and they will back off. I have been known to tell them that if they don’t back off I’m leaving. Hard to do with digital advertisers. Not so easy to tell them to fuck off and leave you alone as long as they have their hands in the cookie jar. And they will even if you manage to disable 3rd party cookies. All the times we accept that the web sites use cookies and give them our permission to download them onto our hard drives, we are saying it is OK to track our browsing history, analyse the data and make commercial use of it. We can’t see it happening, we get a very small share of the commercial benefit, if any, and we have to put up with digital ads that are mostly pointless and very rarely entertaining. The only solution, as I have outlined before, is to use block chain technology to allow us to transact our own data as individuals. Then they would have to fuck off and leave us alone.

The seedy sleuths stealing YOUR data (and your money)

For most of us e-marketing/on-line/digital advertising, call it what you want, is irritating. Ads pop up and do their best to distract you from what you’re trying to read or do on-line. If you do a bit of research about something you might be thinking of buying, and most of us do, suddenly all those ads start to target what you were just thinking about. Helpful? No, spooky, pushy, like someone following you around a store and every time you look at something they get right in your face with the hard sell. Not a store you’d want to go back to, but on-line you don’t have a choice. You want the content, the social media platform, you accept the irritation.

Most people either don’t know or don’t want to think about how this actually works, what’s really going on. If they did they would be really angry and not enough people are which tells me it’s not been properly exposed. What’s happening is a bunch of companies like Equifax or Experian are literally stalking you on-line. Without your knowledge and in reality without your permission (unless you think hitting the ‘I agree’ button equates to cognizant, informed permission) they watch where you go, where you linger, what you click and like some low-rent private investigator they package up your personal information and sell it to someone who intends to flog you something or to some credit agency who will sit in judgement on you.  You don’t know what they know about you, you don’t know who they’ve sold your data to or when or how it’s used. They make a lot of money doing this, Equifax have a market cap of $21 billion, and they keep it all to themselves. You get nothing, just ads.

And if you looked at the Cambridge Analytica scandal, you’d realise it’s gone beyond irritation, beyond just greed, your data is being used to undermine your most fundamental freedoms, the freedom of thought. The thousands upon thousands of bits of data about you are manipulated using algorithms and AI to influence not just what you buy but how you vote. They’re used to manipulate what you think.

It’s bad now and it will only get worse – you’re generating more and more data about yourself and the technology is getting better and better at using it.

But we – if enough of us acted – could not just stop this if we wanted to, we could earn an estimated $7,600 per year on average. The higher nett worth could earn a lot more, the lower income less but probably enough to make a real difference. If the technology and the platform existed to enable us to transact our data direct to the organizations willing to pay for it (with restrictions on how they use and safeguard it) we could put the equifax and Experian’s of this world out of business. We could force the social media platforms to find a different business model other than digital snitching. We would take away a lot of the ad agency revenue and force them to get back to ‘truth well told’ based on ideas.

Well guess what, the technology does exist. It’s Block Chain. And there is one platform, Datawallet, using it to give people the chance to make money from their own data. There are limitations, issues to be resolved as this excellent article in Investopedia outlines. Please read it.

This is what I was writing about in my eBook ‘What’s wrong with marketing(?)’. People owning their personal data with the power to transact it will transform marketing and improve society. It will get rid of the greedy, seedy sleuths (pimps) in the digital shadows.