3 reasons surveillance has become the business model of the internet - and here's what's coming next

Every day, billions of tiny data files - so called ‘cookies’ and device identifiers - are monitoring our connected devices all over the world.?

These invisible digital trackers expose deep insights about what people are doing online. What apps they use, how they use them. Where they have been recently, what online content they look at and when.?

They reveal how long app visitors scroll for. What they tap on. When and where they fill out forms (and if they complete them). They reveal detailed information about the customer’s device… the battery status… even their real-time typing behaviour (called ‘keystroke dynamics’).?

My goodness it’s a LOT of data.?And more.

Gathering all this stuff has not only become a business norm,?it’s become core to many business models in our digital economy today.?

Like tiny wiretaps inside our browsers and mobile apps, cookies lie at the heart of today’s data tracking and customer surveillance economy. In 2014, one of the world’s leading security experts?Bruce Schneier?was in the news for saying this:

“Surveillance is the business model of the Internet… We build systems that spy on people in exchange for services. Corporations call it marketing.”

He was right then, and he’s still right now.?

It all started with the simplest of cookies in 1995 - to remember customers when they came back, to remember what page you were on. But tracking personal data has become a global phenomenon, an invisible pillar of our digital economy.?

Perhaps more bluntly: businesses are now addicted to this vast data gathering, surveilling anyone using the internet.

There are 3 reasons why:

1. It’s become really easy

Today it’s relatively straightforward to install software on your website, app or digital channel to track your users. To operate customer surveillance at low cost. To follow a person well beyond your own digital channels - to see a person’s digital footprints all over the internet.?

It’s said that in the future “what can be connected, will be connected…”.

Here’s my take, “what data can be collected, will be collected”.

2. It’s become a business obsession

However, there’s something else going on here. Something much deeper within the digital economy, beyond businesses solving their own problems with customer data.?

Ever since Amazon’s Leadership Principles became public, much has been made of their number 1: being ‘customer obsessed’.?

It’s now become a cultural norm to talk about being obsessed with customer service. To be customer-first. User first. But, as they say,?‘if you can’t measure it, you can’t improve it.’?That means the more data you have about customers, the more you can improve things for them.?

So this data gathering at scale, so businesses argue, has become about better understanding customers. About better serving them.*

The result is that customer surveillance has become a business (and notably a venture capitalist) norm, an obsession. All to help the customer, apparently.

3. It’s become normal to ignore the downsides of data

Many businesses can’t see (and are likely choosing to ignore) the downstream impacts that customer tracking is having on the rest of business. Think about the overheads related to compliance and IT. The costs to manage, secure and clean the data collected. The loss of customer trust when (not if) the personal data are hacked or breached.?

But here’s what’s fascinating:?all this data gathering, this surveillance, is actually changing customer behaviour.

Individuals repeatedly tell businesses they don’t want to be tracked. Yet that’s exactly what then happens. So what are customers doing about it? When asked for their personal information, they simply hand over a bunch of fake data.

“What’s that? You need a full name? Sure: Mickey Mouse. Email: [email protected].”

I wonder how many dates of birth are recorded in CRM systems as 1/1/1990.”

Then consider this: it’s estimated that up to half of shoppers are?deciding not to use a product due to privacy concerns. Unwanted customer tracking is driving an explosion of new customer privacy tools, and why companies like Apple are making privacy a centrepiece of their products and brand marketing.?

But there’s even more afoot here.?

Customer surveillance is starting to attract such a negative image that even technology providers are now helping people block tracking?by default.?Google’s so-called ‘cookie apocalypse’ will apparently wipe out swathes of the digital advertising market.?

Even WhatsApp is now pushing huge advertising campaigns to explain to users that no-one can see the actual messages you send. (Even though they can see to whom, how often and from what device you send things, plus much more - just check out the T&Cs). And Apple has killed-off user device IDs, intent on building their own - they say more private - online advertising experiences.?

There’s definitely more to come from the big brands on privacy and surveillance - likely driven by marketing folks needing to calm nerves.

Put together, these shifts have brought the ‘surveillance economy’ into sharp focus.

And they are sending shockwaves right across the digital economy. Especially for businesses who today rely on customer tracking and a ‘free’ firehose of customer data to fuel their digital growth.?

Case in point: many are pointing to these exact issues as part of Facebook’s recent share price collapse - down well over 70% since Jan 2022.

So what’s next?

We’re not going to see a complete dismantling of the surveillance economy any time soon. Businesses are too dependent on it.

But with new digital tools for customers, we might just see some significant adjustments.?

New digital customer channels and verifiable data flows - especially where the data is received directly from individuals themselves - are going to flip how we think about customer engagement.?

They will challenge how we think about digital advertising. And they will give us new ways to collect all that personal data, in new and trusted ways.

Over time, those billions of tiny tracking files will become less useful. They will become less valuable. They will make way for much more transparent and trusted data sharing.?

Surveillance may be the business model of the internet today. But mark my words: new digital customer tools, if done right, will become the business model of tomorrow.

Now?that’s?something to obsess over.

* Side point: it’s one thing to be passionate about helping customers solve real problems. But quite another to be ‘obsessed’. It conjures up images of excess and addiction. Just think about it: a teacher wouldn’t say they were obsessed with their students; nor a married person obsessed with their spouse. Obsessive individuals often need help and treatment, and are sometimes given restraining orders.

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