Pixel Envy

Written by Nick Heer.

Businesses Are Slowly Reducing Their Dependence on Third-Party Targeting Data

Suzanne Vranica, the Wall Street Journal:

New privacy protections put in place by tech giants and governments are threatening the flow of user data that companies rely on to target consumers with online ads.

Great.

As a result, companies are taking matters into their own hands. Across nearly every sector, from brewers to fast-food chains to makers of consumer products, marketers are rushing to collect their own information on consumers, seeking to build millions of detailed customer profiles.

Not so great — but not as worrying for privacy as it sounds, either.

When the New York Times told Axios last year that it would be phasing out the use of third-party data for user targeting and relying on its own, I explained why this is a privacy benefit, even though it made the Times a collector of user data:

I would vastly prefer to revert to a pre-personalized ad world, but I still see this move as a step in the right direction. It may still collect data for targeting, but at least it does not involve the near-universal surveillance of companies like Facebook and Google. Reducing their ability to conduct broad and intrusive behavioural data collection is an important step towards a more private web.

This remains true. As much as I think an advertising marketplace should not target users based specifically on who they are and their activities, the least evil version of that is one where individual businesses leverage their existing relationships with people instead of depending on vast web-wide tracking.

But these companies are not exclusively using first-party data. The Journal is careful to acknowledge that targeting information from Facebook, Google, and other ad tech companies will still be used by businesses alongside their own. Furthermore, these data collection schemes are going beyond the typical granularity of loyalty programs, collecting attributes like device identifiers and tying them to names. Building these databases through QR codes and contest entries is sneaky, but not unique or new.

Make no mistake: this is not a slam-dunk win for privacy. I would like to see a regulatory framework scaling back the collection of this data by prohibiting its use for ad targeting, and banning its sale or sharing. But this is a less bad version of personalized advertising because it leverages existing opt-in relationships, rather than fishing for behavioural data with a Google-sized dragnet.