Privacy versus Paid Content: What Are We Willing to Sacrifice?
For many years, users’ data and privacy were a mere afterthought in the online ecosystem. We are now living in a time where privacy is front and center, and that is a good thing … right?
For the past few years, the big privacy stories in advertising were Apple’s ITP and Google phasing out third-party cookies. Recently, Google released a timeline that detailed concrete steps, with a promise that it would be updated every month.
Furthermore, Apple announced a few additional initiatives such as Private Relay (a VPN-like feature) and Hide My Email (a feature that helps users obfuscate their email for logins). These solutions are intended to address concerns people have about their privacy but have also created a few consumer questions, such as ‘Can Apple see my data? And if so, what will they do with it?’
These are uncertain times and the future of privacy is taking a new shape and form in front of us. This is driven both by tech giants and privacy laws and regulations on the federal and state level. California, Virginia, and Colorado currently have comprehensive privacy laws that give consumers more power over what personal information they share, and other states are on track to follow suit.
The question is whether we are moving in the right direction.
A Brave New (and Private) World
To the naked eye, technologies and laws allowing consumers more control are absolutely and unequivocally good. Who would oppose privacy protection laws and self-imposed regulations apart from those who are exploiting the lack of privacy, right? But what is the end goal we are trying to achieve, and what is the price we are “paying” in the process?
The reality of this discussion is much more nuanced than simply labeling tracking as ‘bad’ and privacy as ‘good,’ especially when we think both about the economic value that we get from ad-supported models, as well as what each of us would choose to share if we saw the actual value exchange.
Consumers’ data is valuable to all kinds of companies, allowing them to improve their products for better consumer use, combat illegal activities and yes, also target ads to audiences. In return, we, as consumers, get better, cheaper, and sometimes even free products and content. So, are we willing to give this up?
The Unintended Consequences of the New Privacy Paradigm
Perhaps the larger issue is that consumers aren’t being exposed to the bigger picture. We are all used to content being free, but many consumers don’t realize that one of the few things keeping it this way is the data exchange.
Ads on news sites have long been a large part of publishers’ monetization strategies. But with stricter privacy laws making ad targeting more difficult, publishers will need to look for other ways to recoup that money. And the obvious, but least desired solution for consumers, is to put up paywalls.
Since consumers expect content to continue being free, the idea that it can be restricted so that only those who can afford it or are willing to pay for it is a dangerous, unintended consequence of the privacy paradigm. We need to find a way to protect consumers’ privacy while also preserving some semblance of the advertising ecosystem that allows for free access to important information.
But what does that new world look like? Here’s how to start figuring it out.
Educating Consumers
The first step should be educating consumers on the data exchange so they understand the information that companies have and what exactly they do with it. The term ‘tracking’ sounds scary, but in reality most tracking does not allow a large number of companies to discover granular details about individual people.
In addition, targeted ads can help consumers — for example, by improving the customer experience and allowing more opportunity for free and accessible content. But transparency is key.
Offering Multiple Solutions
Right now, companies like Apple are giving consumers a choice — either opt-in to tracking and targeting or don’t—- but this one-pronged approach misses a lot of nuance. If you ask 10 different people how they define ‘privacy,’ ‘tracking,’ and ‘data,’ you would get 10 different answers. And the same rings true if you ask them what personal information they’re comfortable sharing with companies.
In the same way that some people prefer to keep their social media profiles private while others are happy to share Instagram photos or tweets for the world to see, there are varying comfort levels when it comes to sharing personal data for targeted advertising. Some people may prefer to pay for content in order to keep all of their information private, while others may be willing to give some, or even all, of their data in exchange for free access.
The best way forward will include multiple options with varying levels of access in exchange for data.
Implementing acceptable industry standards
Whether or not a company uses consumer data, they will still find ways to advertise. So it’s important to establish new privacy standards that still allow for the value exchange that advertisers, publishers, and consumers want, but in a different way.
Just like HIPAA laws allow personal information to be shared between doctors, we need regulations on the types of data companies are allowed to gather and the ways that they can share it. And to do this, we need to start by identifying where we draw the line. What is the minimum amount of information advertisers and publishers need to continue the targeted advertising that pays for free content? And as consumers, what are we willing to share?
The next year will be pivotal in dictating the direction of data and privacy on the internet and what both companies and consumers will have to sacrifice. Paywalls may go up, or data collection may go down, but no matter what, all parties must work together to ensure the best outcome for everyone.
Gil Sommer is VP of Product at Connatix.
