Friday 16 April 2021 6:00 am

Data protection: Privacy crackdowns could hand tech giants even greater dominance if we don't tread carefully

Ben Murphy is UK MD at Quantcast

As consumers of online content, we have all grown used to the knowledge that the internet offers an inexhaustible wealth of information from countless sources, ranging from critically acclaimed journalism to user-generated content. Much of it is completely free and accessible to everyone with an internet connection. The principles of an open and free internet are lofty, but the foundation of it rests on advertising not altruism. 

Today, publishers rely on a business model of monetising free content by allowing advertisers access to space on their websites and insights into their audience. The more information a publisher can share about their readers, the more valuable this space, or inventory of data becomes. Advertisers will keep spending so long as they know their advertising budget is being spent in a relevant environment. This value exchange was fundamental to the growth of the online publishing industry.

Now, however, we stand at a critical juncture. Facilitating this value exchange online requires the participation of a range of different types of organization to deliver the right ad at the right time to consumers, and publishers get rewarded. This information flow has long been based on the third-party cookie, which record a user’s activity on a website by a company other than the website they’re visiting.

While the writing has been on the wall for third-party cookies for some time, moves by Apple and Google mean that their time is quickly running out. It will therefore be harder and harder to communicate insights about audience behaviours and interests in a scalable way on the open internet. This devalues publisher inventory and jeopardizing their ability to operate sustainably. 

While the root of this development is a positive one with closer regulation of data protection and user rights inspired by emerging laws like GDPR, the deprecation of third-party cookies in the name of increased privacy creates an unlevel playing field.

Those who stand to win from this scenario are the big technology companies. With their vast amounts of first-party data thanks to all of our log-ins and accounts, the “walled gardens” such as Google and Facebook will see their dominant positions being further strengthened. 

Already, 80 per cent of digital advertising spend goes to these walled gardens.  While they themselves don’t produce content, they profit immensely from distributing content produced by publishers on the open internet. So by blocking cookies, they may control even more advertising spend. 

Quantcast and a number of other members of the value exchange chain on the open internet, including trade bodies such as the Internet Advertising Bureau (IAB), are actively working on alternative solutions. We don’t think that even more power should flow to a few very large companies. To facilitate the open internet’s continued vibrancy and diversity, consumers should be able to fully understand who is accessing their data and why. 

But we are just at the beginning: if the open internet is going to thrive and continue to inspire its nearly five billion users worldwide, advertising spend needs to be redirected from the select few walled gardens to the content producers, the journalists, the storytellers. This is only one way we can help preserve access to a range of information sources, ideas, and news. 

As consumers, we each play a role in the direction the internet takes, and how useful it is to us in the long term. By understanding that power, we can use it. Will the internet become the playground of a few powerful mega-corporations who decide what information we see and when, while knowing every piece of information about us? Or will it be a place where creators, journalists and anyone else with an idea can reach an informed and empowered audience and be rewarded for their work? It’s up to all of us to decide.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.