What is the surveillance economy?
The surveillance economy describes the business of collecting and monetizing people’s personal information at scale, and the companies that are involved in this business.
Why is online surveillance such a big business?
The more sites know about their visitors, the better they can target ads to those visitors, and the more they can charge advertisers for that targeted ad space. And “sites” can mean everything from search engines, social media, video and streaming sites, and some of the most widely-used websites on the Internet.
This financial model creates a strong incentive to collect your personal data. Worse, it creates an incentive to collect a wide range of data, and to collect it about…well, everyone. Knowing what someone does on a single website might not be worth much for ad targeting. Knowing what someone does on all the websites they visit is highly valuable—the whole is greater than the sum of its parts.
What companies make up the surveillance economy?
The sector is very complex, and this article is only meant to be a high-level overview. But there are a few broad categories of companies involved in the surveillance economy:
- Advertisers: The companies that sell products and services, and need to show ads to get people to buy.
- Publishers: The generic term for sites that have space on their webpages to show ads. A user goes to a publisher’s site for content (news, videos, and so on) and advertisers are interested in showing ads to that user.
- Ad networks: These are the intermediaries between advertisers and publishers. Publishers generally don’t want to sell ad space directly to individual advertisers, so they instead sell to an ad network. On the other side, advertisers don’t want to shop around with lots of individual publishers to place their ads, so they’ll use an ad network as well.
Note that larger publishers, like major social media sites, function as their own ad networks. They have the sales and technical staff to work with a wide range of advertisers, and they’re big enough that it’s worthwhile for advertisers to work with them directly.
How do these companies collect personal data?
One of the main ways to collect data is with Web trackers. A tracker is a little piece of software, embedded in a website, that records your activity on the site: which pages you look at, what you search for, what you buy, and more. The ads you see on a page typically have trackers embedded in them as well.
The makers of these trackers try to get their tracker placed on many different websites, and they use various techniques (like cookies and fingerprinting) to recognize the same person across different websites. By correlating one person’s browsing activity across the Web, trackers can build a surprisingly complex and complete profile of that person’s interests and habits. And the kinds of ads they might respond to.
People also give up personal information voluntarily, by posting it on social media. Social media posts can reveal a lot about someone: their interests, their location, their income level, and much more. All of that is valuable for ad targeting.
How do these companies monetize personal data?
Publishers can earn money by hosting ads with tracking functionality on their site. Each new tracker placement is another “eye” on the Internet, contributing more data to the tracking company’s collection, and thus more value.
Tracker makers, in turn, can sell their collected data directly. Major advertisers buy datasets from tracking companies, and use them for ad targeting.
Social media sites, and other sites that don’t use ad networks, use personal information for ad targeting. They have exclusive access to information about their users, including things like the topics that users have explicitly expressed interest in. Using that information, they can charge advertisers more for the ability to target ads with greater precision.
Are there other economic models for Web advertising?
There are other models that still support user privacy, advertisers, and publishers. One such model is Brave. The Brave browser blocks trackers and ads by default. But it also includes its own ad space, outside the pages you’re viewing—unobtrusive, privacy-preserving ads built directly into the browser itself. Users can opt in to see these ads (or not) and earn a share of the revenue (via Brave Rewards) if they do. This share can then be contributed back to content publishers (or not). It creates a virtuous, transparent cycle that supports users, advertisers, and publishers.
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