For the past 20 years data acquisition has been the domain of just a few companies – ‘FAANG’ (Facebook, Amazon, Apple, Netflix and Google – and Microsoft et al. but they could not find a better acronym). I think the term Mosquito (annoying bloodsuckers) may be apter.
The way these companies have cornered the market for personal data has been well-documented – hell you would have had to be living in a cave not to know. The hard-to-understand privacy agreements these companies use are notorious, and the fact that Google reads your emails is common knowledge.
Other techniques are less well known. Smartphones and apps both access your location data, but these apps are often less up-front about what they do with it. They don’t make it clear, for instance, that a bank loan officer may also use that location data to analyse which stores, cafes and places you frequent. Eat out too often, user Uber-Eats – no loan for you!
Similarly, it’s probably clear to you that someone knows what kind of shoes you’ve been looking to buy because that same advert is now following you around the web. What you might not know is that companies may be recording not just your clicks, but also the exact movements of your mouse. Some companies are even analysing the unique way you tap and fumble with your smartphone.
These techniques have all been developed in the West, and mainly by FAANG. But we’d be remiss if we didn’t mention another huge data collection system: that run by China. Chinese censorship is a given, and less well known are apps like China’s Great Nation, which collects vast amounts of data by claiming to be a (mandatory) educational app.
A New Generation of Mosquitos
Most of us know our data is being collected and sold by the big tech companies. Our job is to make you aware of how much of your data they collect and money they make off it. The next development in data acquisition might make things even worse.
The clearest sign of what is to come is the fact that in 2019 several tech companies went public, most for record sums: Slack, Lyft, Uber, Pinterest, and soon companies like Airbnb and Postmates. Share offerings are a way to generate investment dollars to roll out the next phase of their business plan – taking on FAANG.
In the coming years, we may go from a “big five” to a “big ten”, or even a “big 100”.
The reasons for this increased competition are many. One of them is the rise of “DTC” (direct-to-consumer model), where companies are looking to sell directly to consumers – no middleman taking a percentage.
E-commerce companies like Wayfair and Boxed have spent many years building alternative marketplaces for groups of like-minded customers, and many of the new generations of tech companies are looking to appeal directly to their audiences. Say goodbye to bricks and mortar retail.
Another significant shift in the market for data acquisition is that digital advertising is simply more effective.
Advertising globally is a US$600 billion-a-year business growing at 4.3% (Statistica)
American companies alone spent over $19 billion in 2018, acquiring and analysing consumer data, according to the Interactive Advertising Bureau. This means that even companies not in the advertising business generate huge revenues from it. Apple, which is (or wasn’t) primarily an advertising company, is expected to generate $2bn in search ads in the app store in 2020.
In the old days, advertising was shotgun marketing. You fired a shot and a few pellets hit home (return on investment). The age-old cry of marketers was they spent $X on advertising – the problem is that they did not know what worked and what did not.
Advertising today totally relies on data. Even seemingly benign activities, like staying in and watching a movie generates mountains of information about target audiences, and streaming, media even TV manufacturers collect as much information as they can.
They sell this data to data brokers, another relatively new type of business that does nothing but buys and sells personal information. Then companies like Dominos or Uber-Eats buy that data and market to you during your movie.