What is the Surveillance Economy?

The Surveillance Economy

The Surveillance Economy is the system that forms the basis for how large portions of the Advertising Technology (AdTech) and Marketing Technology (MarTech) industries work. 

The AdTech industry provides technology services to Brand Marketers in order to do targeted advertising.

The MarTech industry also caters to Brand Marketers, but with tools and services associated with other types of marketing and online user experience. Mostly to create tailored, personalized experiences, which most agree are desirable.

The lines between AdTech and Martech are pretty blurry, but there is a common theme: they use your personal data for a bunch of stuff they don’t tell you about. That’s the Surveillance Economy. 

Another important definition are what we call Surveillance Companies. The largest category of these are called Data Brokers, who are solely in the business of amassing consumer data and selling it.

It's a big system. It’s also been called Surveillance Capitalism. Tim Cook, the CEO of Apple, likes to call it the 'Data Industrial Complex'. Check out his video on the topic. That’s a decent name for it too. It’s a huge system. Way bigger than Apple. 

So let’s break it down and try to simplify it as much as we can.

Broadly, the way the system works is:

  1. Surveillance Companies assemble very detailed profiles of all consumers by extensively tracking consumers' every digital move
  2. The Surveillance Companies sell that data to Brands, Publishers, or more nefarious actors such as robo-callers, spammers, and scammers.
  3. Brands and publishers then use these profiles to provide highly personalized experiences while on websites, mobile apps or in other contexts. They will also use the data to find new customers through targeted advertising, based on the personal data they have purchased.

Like many systems, the Surveillance Economy has grown slowly and organically, with no grand plan nor any grand planners. It wasn't designed by anyone and it has no owners. 

But the Surveillance Economy does make a lot of people a lot of money. 

It is an incredibly flawed system. The open secret is that the cost of the system is the loss of our personal privacy. 

There are also lots of very uncomfortable practices with respect to how our personal data is used.

The vast majority of companies who use our data to govern our experiences online don’t tell us what they are doing or how they do it. 

They definitely don’t share that most of the time, our data is used for their best interests, not ours. 

But the system remains, because it generates a lot of wealth for those who run it. Wealth generating systems tend to stick around. And grow. 

Much of the tracking takes place without consumers knowledge or consent. The main Surveillance Companies that track you without asking are typically the Data Brokers. Data Brokers specialize in tracking you or finding data about you from other sources.

  • Tracking you through Cookies, Tracking Pixels, your device identifiers, and through sophisticated techniques such as ‘fingerprinting’ the specific characteristics of the software on your device
  • Scraping data from public databases provided by local, state and federal government
  • Companies and organizations who sell your data
  • Departments of Motor Vehicles
  • Loyalty card and loyalty programs
  • Social media platforms
  • Apps on your phone

Some put the size of the Data Broker industry at over $250 Billion. The data they collect is called 3rd Party Data, because it was harvested through a 3rd party that has no relationship to you. 

Keep in mind that Data Brokers are funded by Brands or companies that want to buy your data. Those are the companies you know- you buy their products and use their services. They are household names. 

The Brands also track you when you are on their website, mobile app or are using their product or service. In theory, you have agreed to their tracking you and taking your data by clicking on the ‘I accept’ button when they present you with ‘Terms & Conditions’ or when they notify you about their use of Cookies. This is called 1st Party Data.

Another open secret that we all share is that no one reads Terms & Conditions or Privacy Policies. The vast majority of people just click on the ‘I Accept’ button without reading a thing. It’s a running joke. 

At Known Privacy, we call these ‘I Accept’ buttons ‘false consent’. In theory, we have consented to the Terms & Conditions. In practice, we have not signed up to allow companies to have complete ownership and control over our data. 

There is also 2nd Party Data, which is when two Brands get together and create a ‘data lake’ or ‘data pool’. Brand 1 might have your transaction history, and Brand 2 might have demographic data about you. If they are not direct competitors, they will share or buy/sell data about you with each other. 

A new category is emerging: Zero Party Data. That’s when companies get data directly from you. That is what the Known Privacy Data Exchange does. It allows you to loan your data out of your Identity Manager and get paid. All under your control, with complete transparency into how the data is used. 

So why do Brands pay so much money to Surveillance companies and Data Brokers for all of this data? Why would they spend so much money on all of the infrastructure to gather, house and manage all that data? 

It is incredibly costly. They need to have large compliance departments to comply with newly emerging privacy laws and regulations. Data breaches happen all the time, creating real brand damage. The security to ensure data isn’t stolen is also expensive.

Why do Brands continue to support this system? 

Because, as consumers, we tell them to. The great irony is that in many ways we as consumers are responsible for our own loss of privacy. 

Well, we don’t actually tell them that we want to lose our privacy. 

We tell them that we want personalized experiences. 

We tell brands that we want them to know what we want and to give us tailored, targeted experiences. 

When we see advertisements, we want them personalized. We only want ads about things we are interested in. 

In fact, we insist on it. In every survey that Brand marketers conduct of its consumers, the same results seem to come back. Here is an example: 

Source: Infutor - 2021-Ultimate-Guide-Managing-Identity-Graph-WP.pdf

Until now, the only way to give consumers what they want was to collect massive amounts of data about them, create incredibly detailed profiles about them, and then use that to personalize their experience. 

With Known Privacy, you have your own copy of your data, and when someone wants to use it to tailor an advertisement or personalize your experience, they just get it from you. They will pay you for it. 

You have control and transparency in how they use your data. 

We can fix the Surveillance Economy. It’s pretty simple. Sign up. 

  1. Opt-Out Machine: tell them they can’t sell or share your data. Get a copy of your data back
  2. Identity Manager - a super handy nifty place for you to manage your own data
  3. Data Exchange: when Brand Marketers want your data, you can charge them for it. Instead of paying Data Brokers, they can pay you

Wow. Get control of our data, get our privacy back, and get paid for it? 

Yeah. That’s why we started Known Privacy.