In my new Guardian column, I point out that the big-data-driven surveillance business model is on the rocks.
Once upon a time, you could sell soap with a slogan like “You will be
clean,” but we become resistant to ads. While Big Data initially
generated some promising sell-through results, these days, companies
like Facebook are relying on non-surveillance techniques for their
growth.
Remember when Xynga’s “social games” like Farmville seemed to colonise
the limbic systems of everyone you knew, stealing away their hours with a
fiendishly addictive game-mechanic? In short order, most of Xynga’s
players grew inured to the game’s temptations, leaving behind a rump of
especially susceptible players who were not enough to sustain the game,
nor its makers’ high-flying share price.
Likewise, the “surveillance business model” of building up detailed
electronic dossiers on internet users in order to predict what they want
to buy and how to sell it to them produced some genuinely impressive
results in its early years. The serendipity of seeing an ad for
something you had been thinking about proved very powerful in the early
days of Facebook and the first generation of “retargeting” services.
But a look at Facebook’s ad-card rates shows that the novelty of this
technique wears off fast. Facebook was founded on the premise that it
could use its mounting dossier on your behavior to figure out how to
sell you things faster than your natural defenses would repel its
pitches. If that ideology was borne out, you’d expect to see the
company’s cost-per-thousand ad rates climbing into the stratosphere.
Instead, they’re damned close to the rate you’ll pay for regular,
minimally targeted display advertising elsewhere.
