Surprise and privacy (E)

0:00What was in Henry Kissinger's garbage? An interesting question. In 1975, Henry Kissinger was one of the most notorious and controversial people in the country. And he discovered that the National Enquirer was rifling through his garbage, looking for clues. What was in his garbage? And was it okay for the Enquirer to look through it? Konnichiwa. It's Nick in Fukuoka, Japan, and this is a special archived episode of Akimbo.

0:34In 1988, the Supreme Court issued a ruling written by Byron White about whether it was okay for the police to look through someone's garbage without a warrant. In that ruling, White pointed out that Kissinger's garbage had been looked through 13 years earlier. And he basically said, once you put it in the garbage, it's out there and it's no longer in your control. But this, this is not a podcast about garbage. It's a podcast about privacy. And my thesis, just to let you know up front, is that most people don't care about privacy. What we care about is being surprised. Here's the thing. I know a lot about you.

1:19I know that you listen to this podcast. If I wanted to, I could dig a little deeper and find out the IP address of the people who listened to this podcast. And using that IP address, I could find out what other websites people who listen have been to, and deeper and deeper down the rabbit hole, all the way to the point of probably guessing pretty accurately who you voted for in the last election. Of course, I don't know any of those things because I'm not looking, but the data is there. And if you care about privacy, you don't use the internet and you don't have a credit card. Because 30 or 40 or 50 years ago, if you used a credit card, the credit card company knew, in quotation marks, almost everything about your buying habits and your travel habits.

2:11They knew where you flew and who you flew with. They could take that data and add it to all the other data they had. In fact, American Express has been doing this for decades. They could then take that data and sell it, for example, to one of their good customers. They could say to a hotel, would you like to know the zip codes that your competitors, hotels in this neighborhood, attract people from? We will sell you that information so that you can target those zip codes to grow your own hotel base. Was that okay with you? Well, you were doing it whether or not it was okay with you. Or consider Vogue magazine.

2:51If you buy a copy of Vogue magazine on the newsstand, is it okay that there are ads in it for people who read Vogue magazine? Not ads for rototillers. Not ads for ways to do needlepoint. No, there are ads for shoes, blouses, and dresses. Is that okay? Well, I think most of us would agree that we'd prefer it if Vogue magazine cost$8 at the newsstand, not$80, and the way they can sell it for$8, not$80 is because it has ads, and that most people who read Vogue magazine would prefer it if the ads were about the things that are in Vogue, because most of the time they're reading it for the ads. But leaving aside the prefer it part, let's just go back to the surprised part.

3:38All this data, all this garbage about your activities is in the world floating around. But all of a sudden, the phone rings, and it's somebody who says, look, I've been looking through your credit card data, and I've discovered that you've been going for a lot of massages at illicit massage parlors, paying for it with a credit card, not very smart of you, and staying in hourly motels. So I'm calling to see if you'd like a discount on STD testing. Now, if you got that call, my hunch is that you would be incensed because you were surprised because it's not what you signed up for. So let's go back to the commercialization of this industry all the way back to L.L.

4:23Bean in the early 1900s. L.L. Bean went to the government of Maine, a state in the U.S., and said to them, I would like the list of all the men in Maine who have a hunting license. Now, this is a matter of public record. And we can have a discussion about whether public record is okay or not. We could definitely have a discussion about whether public records should be public or not. But once it becomes commercial, then I think that conversation goes away. So he goes to the government of Maine and gets the list of all the men with a hunting license in Maine. Then he goes to the post office. Now, the post office has an open API, meaning anybody with a stamp can send a letter to anyone they want to.

5:09I'm going to argue that most of us are fine with that, that the post office should be an open conduit and it shouldn't be up to the government who can send a letter and who can't. So he sends a letter to all of these hunting license owners and he builds a company called L.L. Bean. So far, so good. I don't think anybody is surprised by this story. Now, L.L. Bean isn't a cutthroat business. Someone else can sell things cheaper than they can. One of the ways they keep their prices low is they rent their list. They rent to somebody who isn't a direct competitor the list of people who, for example, just bought something expensive from L.L.

5:52Bean. So those other people can send a letter to them. 30 years ago, when I discovered that this was possible, I did some research. There are people who sell mailing lists for a living still to this day. And I found that you could buy a list of every woman in New York City who owned a handgun permit. Now, I don't think most of the people on that list were glad that they were on that list, but the list is garbage, the leftovers from an action that they took in the public sphere. And again, back to the idea of the government having the list. Well, Vogue has a list of all the people who are subscribers.

6:31A subscription to Vogue costs a lot less than buying it on the newsstand with cash. But a subscription comes with the fact that Vogue knows that you're a subscriber. Does Vogue sell that list? You bet you. Now, once computers enter the picture, we can start overlapping. So, for example, we now easily know which zip codes in America have the highest income. I think anyone who's okay with a company sending a mailer to everyone in America is probably okay with having those people pick certain zip codes to send their mailers to. But now you can take the list of the best, in quotation marks, zip codes and overlap it with, for example, the people who subscribe to Vogue and overlap that with, for example, the people who are registered Republicans.

7:26Each piece of data compounding, building a dossier, a profile on every single person that the marketer is paying to reach. Notice that at each step along the way, the amount of privacy that someone had has not changed one bit. What's changing is how surprised we are at how granular the information can become. You've probably already guessed where this is going, because like all things, when you add the internet and stir, many zeros get added to it. Because now I don't have to track whether or not you subscribe to Vogue magazine. What I can do instead is say, if someone has visited site A, site B, and site C, I would like to show them an ad on the internet.

8:22So how does that even work? Well, years ago, one of the things that got added to the web browser was something called a cookie. and the purpose of the cookie was to make it easy for a website to know that you'd been there before or not. And everyone was happy with this because why should I have to see all the blah, blah, blah of a website if I'm already a registered user? The cookie simply puts up a flag and it says to the website, hey, this person, he's been here before, she's been here before. Try to imagine how much nicer it would be if you could walk into a retailer and all the people at the store, even the clerks who just got hired, realized that you were a big shot, that you wore size four, that you didn't like the color brown, but really liked the color yellow.

9:13And they instantly rearranged the store just for you. Yes, I am Mr. Hollister, the manager. May I help you? Edward Lewis. Yes, sir. You see this young lady over here? Yes. Do you have anything in this shop as beautiful as she is? Oh, yes. Oh, no. Oh, no. I'm saying we have many things as beautiful as she would want them to be. That's the point I was getting at. We are going to be spending an obscene amount of money in here. So we're going to need a lot more help sucking up to us because that's what we really like. You understand me? Sir, if I may say so, you're in the right store and the right city for that matter.

9:49Mary Pat, Mary Kate, Mary Frances, Tova, let's see it. Come on. Absolutely divine. Exactly how obscene an amount of money were you talking about? Profane or really offensive? Really offensive. I like him so much. That was the original idea behind cookies. And it was very strict that you couldn't share cookie data across sites, which meant that what you did on one site was hidden from what you did on another site. But again, when you add commercialism to the internet and stir, crazy things happen. And now that rule's way gone, that there are universal cookie trackers that know you did something on site A, and then can engage with you in a certain way on site B.

10:36Suddenly, people were getting surprised. Same amount of privacy, way more surprised. because you went shopping one day in a moment of weakness for a miniskirt, and then for the next two weeks, miniskirt ads everywhere you go. At work, when people are looking over your shoulder. At home, when your spouse is like, what are you doing? Surprise, surprise, surprise. Suddenly a sharp point is put onto this idea that we are always being tracked. ever since we put our garbage on the curb when we were a little kid, that all the data is in the world, but the tracking? The tracking is adding up. Two more stories here.

11:21The first one's about Paco Underhill. Paco, considered a guru of retail shopping environments, Paco and his team looked at 10 ,000 hours of security camera footage from places like Macy's and other big department stores. And what they discovered, for example, is that when the shelves are too close to one another and people are squeezing by, women tend to stop shopping. So he came up with the idea of spreading out the shelves and they saw sales go up. Did the system break down? Is it okay for Macy's to have security cameras? Is it okay to use those cameras to figure out how to make the shopping experience more viable?

12:06Or consider the new tools on the internet that allow a web designer to sit at her desk and watch one person at a time tracking the mouse movements of someone who is visiting her website. It's not a big leap to hook that up to the IP address of the person who is visiting the website. And suddenly, your experience on a website is no more anonymous than your experience at Macy's. So now the question. The question is, what should we do about our rage about the surprise? Because we've already decided what sort of economy we work in and live in. We've already decided that we are willing to trade almost anything for convenience and to save a few bucks.

12:56So Netflix. Netflix knows that you only watch that show for a minute and then next week for another minute. by knowing that, they're not going to make another episode of that show. Or if they do, they're not going to tell you about it because it's not in their interest to do so. A lot of people say, that's great. I am glad that websites change what they offer based on how people interact with websites. If there's a clunky product and you put it on your homepage and it doesn't sell, you take it off your homepage. That is the evolution of ideas online. The ones that work get done more. But then we start to chunk it up.

13:36We don't have one homepage. We have 400 homepages. If it's working well on homepage number 72, we keep it on 72. But if it's not working well on homepage 144, we take it off that homepage. Again, so far so good. We like the fact that products are optimized. We like the fact that prices are lower. In fact, we insist on it. The people who don't do these things, the media companies or the catalogers or the creators who don't do these things, we generally walk away from them because their products aren't convenient, because their products aren't customized, because their products cost too much. and so we are stuck with this bargain and now the question is as it gets weaponized and digitized and optimized what are we going to do about it where do we draw the line so consider this podcast this podcast has ads sometimes from non-profits which i do for free sometimes through a partner i run the ads because it's an interesting experiment for me to understand how a new medium is being monetized.

14:50But if you want podcasts and you don't want to pay Audible for audiobooks, how are you going to get them for free? You're going to get them for free because they're going to be ads because the creators of the podcasts would like to get paid. Okay, so if they're going to be ads, what sort of ads? Well, at the beginning, they were ads the way Vogue magazine would have ads. So the advertiser, with a crude amount of data at her disposal, would say, oh, I want a podcast that reaches the kind of people that read Vogue magazine. I'll put an ad in that one. And most people say, well, sure, because by listening to the podcast, I engaged in a bargain and that bargain involved me saying, I'm the kind of person who's interested in X and it's okay to run ads about X.

15:38And we sort of get annoyed if there are ads about Y, because we say the marketer and the podcaster are wasting my time by running ads about something I cannot, will not, or should not buy. So far, so good. But when you subscribe to a podcast, your RSS reader or other device pinged the server to get the next episode. And when it did, it told it your IP address. Okay, so now we know which sort of person is listening. Because once I know your IP address, I know lots of other things about how you've used the web. Next thing, it used to be that an ad on a podcast was permanently embedded into the podcast, that when the podcast went out, the ad went out with it.

16:26But once digitized, we don't have to do it that way. We can swap an ad in or out. So now the advertiser, evolving as we insist and demand they evolve, says, wait a minute. I can tell from IP addresses that these people live in Germany. My product isn't for sale in Germany. I don't want to pay to run my ad in front of those people. On the other hand, there's another product only for sale in Germany. It's going to pay a premium to reach just those people. So we divide and we atomize. And deeper and deeper and deeper the advertisers go. Now, where the surprise turns to outrage is when we read about a snooping firm, a dossier firm that has figured out every one of your foibles and proclivities.

17:15It turns out advertisers don't know this, don't care about this, and haven't actually invaded your privacy. One day the government might, one day an enemy of yours might. But advertisers, they're just short-term greedy narcissists who are trying to run the ads that'll make them the most money in the shortest period of time. They have a computer talking to another computer buying the best data they can find. Which is small solace if you are somebody who has been targeted by a Facebook ad that was built just to reach three people. Yes, you can do that without too much trouble. Suddenly, we're like, wait a minute.

17:55What's happening here? Do I have no expectation of privacy? And as we learned from Byron White, no. You have no expectation of privacy. Now on the internet, you can protect yourself by installing a VPN, by installing all sorts of filters between you and the internet. Eternal vigilance will get you 99 % of the way to living in a world that isn't like the world the rest of us live in. But in that world, you will see everything in its most generic sense. and that in that world, you will over time pay more for the things you interact with because the subsidies that made it so that it was cheaper or more convenient are going to go away.

18:37And advertisers don't really worry about this. They don't worry about this because people are lazy, people seek convenience, and because the world shifts often enough that it's quite likely that the large mass of people aren't going to mind. So the idea of permission marketing from 20 years ago was that people want anticipated personal and relevant messages that they want to get. They don't want to be spammed. Being spammed is a form of being surprised. Being spammed means getting something you didn't want or expect. And what's happening as these media evolve is we are resetting the standard for what privacy even means.

19:20If you got a note from Amazon that said, we lost all of your information, we don't know what you like, we don't know how to customize things for you, we don't have your credit card or your address or the addresses of all the people you mail stuff to, you're going to have to start over. My guess is that most people would be annoyed by that. On the other hand, if we have the chance to take all of our data out of Facebook and start over with a social network that's a little bit more kind and rational, I think many people would take that choice. And so we have a paradox and a puzzle because on one hand, we like all the treats.

19:58On the other hand, every once in a while, someone points out to us just how many calories we're consuming. There isn't a hard and fast line here. I don't know anybody who is living a completely anonymous life. I don't know anybody who wants the internet to know everything they do all the time. Back when I was running Yo-Yo Dine, when we invented permission marketing, there was something called JennyCam. JennyCam was a sensation. It was a woman who had set up a webcam in her home.

20:36And you could watch her 24 hours a day doing whatever she wanted to do. Of course, the prurient people showed up immediately and wanted to know if there was a camera in the bedroom, and that varied depending on how much traffic she wanted. But Jenny Cam was the beginning of an interesting experiment that we are now all part of. Because Nest and Alexa and Google and the rest of them, they're watching. They're watching all the time. They don't know you because they're computers. It's all going into a vast data bank. And that data bank, because it's digital, is going to get ever sharper and more personal.

21:21And sooner or later, you will be surprised. And my bet is the surprise will wear off and you will go back to business as usual because the ratchet of capitalism is inexorable. Over and over it turns, usually in one direction, and it's not the direction toward, I see you as a human. I treat you with respect and dignity and you in return do the same for me. No, we're in such a hurry to save a minute or save a dollar. We're in such a hurry to click on that thing we want, even if we know that we are rewarding a marketer who is doing something we don't approve of, that we keep doing it. So if I'm going to wrap this up in a tidy bow, what Byron White said to Henry Kissinger is, we're going to snoop your garbage, get over it, buy a shredder if you care.

22:15Well, the internet is saying to each of us, guess what? You are putting your activity on the curb just like garbage every day. And we are going to do our best to not surprise you because that's bad for business. But we're also going to be really focused on what works and we're going to do that more. And as long as it works, count on marketers to keep doing it more. That's my rant for today. Go make your ruckus. Hey Seth, it's Maria. Hey Seth, my name's Kyle. Greetings Seth. This is Stephen out in Madison, Wisconsin. Hi, Seth. Alicia from Charleston here. Hi, Seth. This is Anupam. Hi, this is Caitlin.

22:52Hi, Seth. Warm greetings from Curacao. Hey, Seth. My name is Nick Ryan from Pittsburgh, Pennsylvania. Hey, Seth. This is Rex. Hey, Seth. Hi, this is Vasilis from Greece. Hi, this is Roberta Perry. My question is... And that completes my question. As always, I love to hear from you. To ask a question, just visit akimbo.link. That's A-K-I-M-B-O dot L-I-N-K. and press the appropriate button. Two juicy questions this week. Here we go. Hi, Seth. My question's about nonprofits and scarcity. I'm endeavoring to create an organization based around the idea people need to be outside more. The connection to nature and the benefits it provides have been documented over and over again.

23:44And the only hitch in the giddy-up, as Kramer would say, is that we do not have a scarce model. How do we create enrollment in our organization when most of our products are free to use? Thank you for highlighting this issue of scarcity. Scarcity creates tension, tension creates value, and it also creates action. But what to do if the thing we are offering has no apparent scarcity? In your case, the outdoors, or for example, marketing a search engine. A search engine is all about ubiquity. Anyone can use it. It's not going to have a line. It's going to work whenever you show up. So where is the scarcity?

24:35Well, there are many forms of scarcity in our culture that don't have anything to do with access. Access to experiences, access to tools. For example, the scarcity of connection, the scarcity of being seen, the scarcity of status. If you're looking to celebrate people who participate in something, give them a badge. There is no scarcity when it comes to the ability to donate blood, but there is a scarcity of the status that you get from wearing a pin saying you just donated blood. That status roles are created by marketers who seek to cause action to occur. So in the case of an outdoor cause like yours, you could have people who are voluntary rangers.

25:25You could have people who volunteer to clean up parts of the parks. They could get special parking spaces, bumper stickers, badges, hats, all sorts of ways that they could indicate to the others that they care just a little bit more. You could create environments where circles of people would be able to see each other, insiders and outsiders. You could create walks where there's limited availability to go with a guide, etc., etc. Creating scarcity is not cruel. Creating scarcity in the service of causing action is a generous act. Hi Seth, Jason Kugler from San Diego. My question is related to your rant on paint by numbers.

26:12Basically, you're saying if there's an instruction sheet telling you exactly how to create a work of art and you just follow the step-by-step guide, there's not much value in that. So my question is related to my eight-year-old son who loves Legos. He can't wait to get the next box of Legos and create the creation that is shown on the front cover. And he'll spend a whole day building it, getting it just right, and then showing it to me or showing it to my wife. And of course we say, great job. Are we encouraging the right thing? Should we be encouraging him to instead create something from scratch?

26:54What are your thoughts on that? Sounds like your kid is lucky to have you. I have ranted about Lego before, but for those of you who might have missed it, here's the deal. The Lego company, many, many years old, based on some very principled principles, including the idea that every piece of Lego has to have multiple purposes, was facing bankruptcy. In the world of video games, in the world of the internet, it was really hard to get a kid to turn off a screen and start playing with general purpose Lego blocks. And what saved Lego was their understanding that the culture has shifted and that giving kids a kit, a kit with a right answer, a kit with a method, a kit that is designed to be done and then discarded, fit what many parents and many kids were looking for, an assignment.

27:49And so the Lego company was saved by an endless series of licensed or simply interesting kits. And at first, I look at that and I go, that's great because they are interesting. They are clever. They do challenge the kid to visualize things in three dimensions and to get good at finishing something. However, if that's all they get out of it, it's basically compliance practice. it's practice for doing what your boss is going to tell you that what I would say to my kid who is so proud of this is all right now that we've finished the kit how do we make it better how do we reassemble it using pieces from another kit to build something even better than the people at Lego created and I'd go ahead and post those pictures share them widely express pride in the fact that a creative act occurred without a manual, without a step-by-step instruction, that somehow you and your kid figured out how to take a Jedi fighter and the London Bridge and put them together into something new, something that no one else has ever built before.

29:06So no, I wouldn't take away the joy of building a kit from anybody, but I think we can go further than that. Thanks again for listening. We'll see you next time.