Our digital fingerprints are all over the internet. Photo / Getty Images
OPINION:
Data has become a dirty word, but it isn't going anywhere any time soon.
Over the last few years, we've seen scandal after scandal plague the online data collection industry, leading to lawsuits, new legislation and changes in the rules governing data collection.
While this has rattled the industry, the business of online personalised ads continues chugging along on the promise that it's offering consumers something that's more relevant than the wide net cast by broadcast media.
Data professionals Qassem Naim and Laura Goldie have just launched creative data agency FCB/Six in the local market and tell the Herald that they've seen an industry grow up before their eyes in the past few years.
"The collection of data about people is coming under great scrutiny, there's no doubt about that," says Naim.
"A lot of people in the industry were taking the piss. They were taking advantage of a situation that was complex and unclear to the average consumer and to most lawmakers and exploited that to drive profits. Then on the other side, there is this abject lack of understanding about what it entails."
This created a dangerous cocktail that allowed a free-for-all of online data collection, often without the consent of those involved.
Legislative changes the past year have moved to put an end to some of this, by blocking so-called third-party trackers that follow you around websites without your knowledge.
"The important thing here is that it's the third-party cookie that's dying, it's not first-party," says Naim.
"If you've ever used an ad-blocker and go on to a major US-based news publication, you'll notice that it blocks about 250 tracker requests. There are the random little companies that are picking up these random fingerprints or signatures of your data. That was exhaustive, unnecessary and poorly maintained."
The onus has now shifted to businesses taking ownership of their own first-party data rather than relying on these largely unethical tracking companies that gather information on web users.
Until now, much of the data being collected was just used to create personalised banner ads published around the world. Numerous research studies have since shown these types of ads to be considered creepy and intrusive, with many users questioning where the data came from.
Anecdotally, it turns out targeting a media columnist with hair shampoo for prematurely greying hair isn't a good way to get him onside. It just leads to questions about where the data came from.
Goldie says that when corporates collect data responsibly and then use it in a meaningful way, customers will respond better to what they're seeing.
"If you're an airline and you're using data to supply flight discounts for a destination that you know a customer wants to go to because they go there every June, then that's okay," says Goldie.
This is a tricky balance to strike. There's always a line when it comes to the data game – and any business that plays in this space is at risk of crossing it at any given moment. It's a case of being relevant, but also ensuring that the person doesn't feel as though you've been peering over their shoulder secretly.
Naim says businesses don't need to snoop surreptitiously to acquire information that is useful to reach customers.
"There's all this data that's available on a weekly rolling basis: everything from retail card transactions to the national happiness index. There's a broad set of data that you can use without getting creepy down to that individual level."
When businesses are looking to acquire more personalised data, they should be doing it directly with customers in a way that they're comfortable with.
To explain this, Naim uses the example of Spotify's annual wrap of every user's favourite songs at the end of the year. That level of personalisation at scale across millions of users has all the characteristics of something that could be creepy, but few complain.
"Spotify stays in its lane," says Naim.
"They're just telling me about the music I'm listening to. If Spotify was telling me about other stuff that I've bought or telling me about stuff they shouldn't know about, that would be weird to me because it's outside of their lane.
"I trust Spotify with music and I'm giving them consent, so they can give me all these cool recommended playlists."
The idea of consent is integral – and one that's going to fall under greater and greater scrutiny in the coming years. When the customer consent seems absent or there's no clear indication of when it was given, this has the potential to provoke that eerie feeling of being watched by some omniscient presence who is quietly taking notes.
"I was recently sitting at lunch with a mate and he was telling me about TransferWise, and then I opened up Facebook two seconds later and TransferWise was one of the first ads there," says Naim.
"Now, the data practitioner in me is inclined to say that that's just confirmation bias and the only reason I've noticed it is because I was just thinking about it ... but that's definitely something to be wary of.
"If it's unexpected, if I'm surprised by the information that a business knows about me, especially if they're then using it in a way that I'm not particularly fond of, then those two things can create a recipe for people getting really uncomfortable with the use of data."
Naim says that once you lose trust in a business, getting it back is almost impossible.
He explains one of the biggest mistakes businesses make in this context is trying to acquire vast quantities of data they don't need and that they don't end up using.
"Many companies are inclined to ask [30 questions on a customer's preferences], because they want to know that information. But how is that going to change the way you show up for the consumer? It's not.
"You need to strip that right back and go for the minimum you need to deliver the highest amount of value to the consumer."
The point in all this is that the use of data isn't going to disappear all of sudden. What we are instead seeing is a shift in the weight of responsibility to businesses that want to offer personalised experiences to their customers.
What we are seeing here is the first stepping stones to an internet that is more personalised to the person actually using it.
Already, when you log into your Countdown shopping account, you can access your favourite items or shopping lists of your previous visits. The Countdown web experience I see is markedly different from that which my neighbour sees.
As businesses take greater control of their data, we'll see personalisation like this appearing across numerous sectors and affecting the way we see and experience the online world.
What repercussions this might hold is still unclear.
But it's becoming increasingly apparent that the stepping stones to the metaverse will be paved in your data.
BGH's tilt at Tourism Holdings has sparked more merger and acquisition speculation.