Why do contextual ads fail?

Companies like Google, Facebook and Amazon violate our privacy in order to show us relevant ads. So why do their ads miss the mark?

The issue of the decade is privacy.

We used to have it. We still expect it. But everyone keeps taking it away.

Hackers take our privacy away when they breach the companies we do business with.

Governments take our privacy away when they conduct mass surveillance or industrial espionage.

And companies like Google, Facebook and Amazon take our privacy away when they harvest our personal data and monitor our online and offline actions to serve contextual ads and content to us.

Ironically, of these three major categories of privacy-violating organizations, people are generally most vexed by the third -- tech companies that track us in order to serve up more relevant ads and content -- even though it is, or should be, the least harmful.

Companies whose business models don't depend on algorithmic filtering shamelessly exploit anxiety about companies that do rely on algorithmic filtering.

Apple CEO Tim Cook told Charlie Rose: "Our business is not based on having information about you. You're not our product.... If [other companies] are making money mainly by collecting gobs of personal data, I think you have a right to be worried."

A newish social network called Ello has a "manifesto" that reads in part: "Every post you share, every friend you make, and every link you follow is tracked, recorded, and converted into data. Advertisers buy your data so they can show you more ads. You are the product that's bought and sold."

"You're the product." I'll admit that I've used that line myself. But I've come to believe that it's pretty clearly a misleading and unsophisticated view.

With contextual advertising, you're not the product. Advertisers don't own you. They usually don't even get to know who you are. The companies selling the advertising theoretically (and algorithmically) display ads to you if you meet the advertiser's criteria.

Personal data harvesting for contextual ads and content should be a beautiful thing. Companies monitor what you do, where you go, who you interact with and what your interests are. They do it privately and securely, and it's all automated so that no human being actually learns anything about you. And then the online world becomes customized, just for you. The ads are always the things you want to buy. The services are just what you're looking for. The content is exactly the stuff you enjoy.

It doesn't always work that way, but that's how it's supposed to work.

What's wrong with the public anxiety about this scenario? People are mostly concerned about the privacy violation. But it could be argued that there is no such violation, in most cases. It's really a philosophical question as to whether your privacy has been violated if no human being sees your data.

The real problem with this scenario is that is we're paying for contextual ads and content with our personal data, but we're not getting what we pay for.

That's true of most supposedly contextual advertising. And it's true of most personalized content.

I crowdsourced some questions about contextual advertising and contextual content on Google+. It was an unscientific survey, of course. But several strong consensuses formed that perfectly matched my own observations.

The strongest consensus was that Facebook advertising is off target and almost completely irrelevant.

The question is: Why? Facebook has a database of our explicitly stated interests, which many users fill out voluntarily. Facebook sees what we post about. It knows who we interact with. It counts our likes, monitors our comments and even follows us around the Web. Yet, while the degree of personal data collection is extreme, the advertising seems totally random.

What is Facebook doing with all that personal data?

When I go to Facebook, I never see an ad that demonstrates the company's intimate knowledge of me and what products I might want to buy.

Google search sometimes gets it right, as do a few other Google services. But those experiences are rare. More often, the ads miss the mark. When I go to YouTube, I see ads for cars (which I'm not in the market for and have no interest in). Google's privacy policy lets it take what it learns about me via one Google product and use that information to serve up ads on another Google venue.

Advertising on Google Search and in Google Ads on Amazon and other websites mostly seems to promote things that I've looked at or already purchased. For example, if I buy a wallet, I see hundreds of ads for wallets for months afterward -- the one thing I definitely don't need.

But seeing that I was shopping for a wallet, then serving up ads based on that behavior is hardly sophisticated contextual advertising. Where does the endless list of personal data and signals go? Google and Amazon both know what I read, what TV and movies I like, where I live, how old I am, my gender, my interests, my professional interactions, and so much more. What are they doing with that information? It's clearly not doing me any good on the advertising front.

And it's not just advertising, but content, too. Google and Facebook algorithmically filter what you see in your Circle Streams or News Feed, respectively. They show you some of what your family and friends post, but not all of it. We're supposed to trust their algorithms to show us what we want, based on our personal data and activity. Yet in both cases, they fail miserably.

Everyone on Google+ has a Notifications view. In my experience, half of my notifications are relevant -- showing the kind of content I want -- and half of them couldn't possibly be relevant to anyone.

How is that even possible? I use Google services every day, from Google+ and YouTube to Google News and Google Search and much more. How could Google possibly have no idea what I'm interested in?

Facebook seems fine, until you learn what it's holding back from your News Feed. Here's something to try: Pick any close family member who you know is on Facebook and go look at their posts. You'll notice lots of posts you've never seen before -- the ones that Facebook's algorithms have filtered out from your News Feed. Did it do a good job of knowing which posts you wanted? Or did it filter out as "noise" posts that you actually wanted to see. Now compare those against the posts Facebook did deliver. Astonishing, isn't it?

The ugly reality is that we have granted permission for companies like Google, Facebook and Amazon to have access to countless points of personal data, from our location and our actions to our relationships and our interests. And we did it in exchange for relevant advertising and content.

We're doing our part. Why can't the personal-data-harvesting companies do theirs?

The problem isn't that we're giving up all our personal data. The problem is that we're giving it up for nothing.

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