In a world where digital and real-life are every more closely entwined, what is a better Internet? Simply put, it’s a place I can go and trust that I can lead a digital life that is as free as my real life is. However our digital freedoms, and consequentially our real world freedoms, are undermined by one simple thing, the commercial reality of funding the Internet.
“We need a new business model for the Internet.”
If we take a small step back in time, a mere 30 years, to the birth of the Internet, visionaries in Silicon Valley and elsewhere saw its awesome potential. But the sheer scale of the opportunity had to be funded somehow. It was recognized data was the key, and personal data in particular could be a new tradable asset. But who would buy it? The simple answer – advertisers. They spent $0.5 Trillion in 2016 and this is expected to be $0.73 Trillion by 2020! Of course this is just the tip of the personal data value iceberg, with Apple and Amazon combining this data value into shopping and device service of equivalent revenue scale. Apple + Amazon + Google + Facebook 2016 revenue, when combined, is greater today than the GDP (Gross Domestic Product) of 88% of countries, that’s more than 176 of the world’s 196 countries! These digital entities dominate in their various spaces and operate near monopolies over our personal data and through that our digital lives and thus our forming digital society. I would argue this advertising (and thus personal profiling based) business model was a necessity 30 years ago, even 20 years ago, because no-one was personally willing to pay directly for services for which they had no comprehension of the value. Yet now we cannot conceive of living our lives without them. Try committing to not use just 2 of these 4 companies products ever again – its virtually impossible for the average person on the street to imagine.
The problem is that these services, and thus our personal data, now power entire economies. Governments are unwilling or unable to challenge these dominants because they’d have to undermine digital service to the voting citizen. In short they are stuck and have to engage in the process of harvesting our personal data, or at least participate indirectly, by directly funding advertising through these entities in order stay in or gain power – the recent debates on Brexit and Trump campaigns, show how paid for digital influence by governments is suborning democracy, raising serious cause for concern for our freedoms as citizens.
The problem with advertising as an Internet funding model is that it’s highly competitive. The only way for one digital agency to succeed over another is to provide greater targeting – which in turn requires ever more detailed profiles of who we are, where we are, when we are there and even better, predictive analytics of what we’ll do next. Facebook now profiles its users in over 52,000 different ways! The advertising model can only grow by delving ever deeper into our personal data. The digital dominants sustain their position by knowing more about you than anyone else in their sphere of business. This means your social lives (Facebook), your purchasing power/habits (Amazon), your interests (Google search) and your physical movements (Google Android and Apple iOS) and a lot more.
“Advertising drives a commercial and economic need to digitally model every aspect of the real world and our real lives.”
The initial advertising funding model was developed to solve a problem, that problem has now been solved. Everyone ‘gets’ the value of the Internet. So why do we persist in pursuing the same old commercial model when the harms to our freedoms are becoming so apparent? All this data stored in the cloud is fundamentally insecure, no one can assure you or me that it can be maintained for the rest of our lives, yet this is what Apple, Facebook, Amazon and Google would have you believe, despite the daily insecurity evidence to the contrary. Even if it was secured 100%, you and I as citizens have no idea who has it or for what purpose it’s being used, fundamentally undermining our privacy, and through that our very trust in Internet service provision which is demonstrably declining every year.
So what has changed that can allow a new business model to develop? Perversely, it’s the very success of the Internet. Digital is everywhere, in some countries more people have a smartphone than have a toilet or access to running water. Digital has become integral to our daily lives, it’s almost a necessity, certainly for a functioning economically progressive society able to compete in the global market.
In some parts of the world (the EU especially taking a global lead) digital businesses are facing a tsunami of legislation. We at Krowdthink are big fans of the GDPR and have great hopes for the E-Privacy regulation in development, as well as standards like eIDAS and other regulations. Not because regulation is good, but because they are trying to inculcate trust and freedoms into digital society. It has also become necessary to curb the slide towards distrust in digital services, but with a stick not a carrot. Business won’t ‘really’ change unless it sees commercial value and opportunity in changing – there are too many businesses that have faced certain demise if they don’t change and yet persisted with the same old models. In short the Internet itself is ripe for disruption – and disruption won’t come from technology, it’ll come from a change in business model and digital market organization.
I have worked in real-time control systems for over 25 years and what we at Krowdthink see is that the Internet, and indeed the burgeoning Internet of Things, has moved from a transactional IT style infrastructure towards a real-time system of systems. Data is flowing continuously everywhere – personal data is often referred to as our digital exhaust – as we leave trails everywhere we go and in everything we do. But an exhaust is not a left-over to be stored and processed, its live information that can facilitate business opportunity. Through research and real world application we have a fundamental understanding of how people interact. The Internet has given us this understanding. Safely executed research can give us the analytical tools to use data in real-time without the advertisers need to subsequently track and profile all we do.
“What has been missed is the opportunity to build a new business model for the Internet based on real-time information flow. We don’t need to profile, track and model every single person on the Internet in order to deliver them digital value.”
Collating historic profiling data puts people at risk to the nefarious criminal element that are showing their strength vs the weakness of the Internet. The criminals’ goal is access to personal data for subsequent fraudulent activities, or the denial of access to data for service denial. Our data is both the strength and weakness of the Internet. What if we did not collect data? what if we minimized what was stored to almost insignificant levels? What if we built transactional value on real-time data – information volunteered and made available at a point in time in order to gain access to digital value? What if we re-invented existing services using this model? We at Krowdthink believe strongly that many (not all), internet services can be re-invented this way – and by doing so, by making the data attack surface smaller, we will end up with a better more trustworthy Internet, an internet where we’ll all engage more confidently and actually share more.
“Let’s monetise the engagement opportunity – not people’s personal data”