As ad cookies crumble, can data unions rise?
Future News 101
The digital advertising industry is facing its own Y2K moment. Following in the online footsteps of Apple’s Safari and Mozilla’s Firefox, Google is planning to stop using third-party cookies, small text files which track users across the web, on its Chrome browser by 2022.
The significant move (Chrome accounts for two thirds of the browser market) is a win for privacy campaigners. But there are concerns among publishers and Google’s peers and competitors that such a shift could further boost the company’s market power.
A 2020 report from the UK’s Competition and Markets Authority (CMA), for example, revealed that the demise of third-party cookies could have a dramatic financial impact on news media outlets:
Using data from a Google experiment, we have estimated that UK publishers earned around 70% less revenue overall when they were unable to use third party cookies to sell personalised advertising but competed against others who could.
Google, meanwhile, has unveiled its own plans for the post-third party cookie world. Its ‘Privacy Sandbox’ initiative will create cohorts of individuals, the idea being that individuals are hidden in the crowd.
With an “open mind”, the CMA has launched an investigation into the project, noting the potential impacts on news outlets and the digital advertising industry at-large.
Elsewhere, trade body the Interactive Advertising Bureau has responded by launching its Project Rearc. The initiative is a “global call-to-action” to re-think and re-architect digital marketing as the end of the third party cookie looms. The US-based body has noted:
The removal of third-party cookies and identifiers will have a profound impact on digital advertising stakeholders, and we encourage you to participate in laying the foundation for tomorrow’s solutions for ad targeting, measurement, and optimization, driven by the need to enhance consumer transparency and industry accountability.
Another way forward could be the rise of data unions or data cooperatives. The idea is that individual consumers/members combine their data together to boost their selling power. These data sets can then be purchased by data buyers. The trouble here is how do you quickly and easily distribute that money and how do you avoid centralisation?
According to Jilted Generation co-author and former journalist Shiv Malik, the answer lies with blockchain technology. To be exact, the best place for this decentralised peer-to-peer network for real-time data (as opposed to static data) is on the Streamr Network, the data infrastructure start-up he has been working on for more than three years and an enterprise helping enable a “fully consensual and ethical way” of acquiring data sets.
How does it work in practice though? Consumers/members can download the Swash browser plug-in, which has some similarities to the Honey plug-in, and they will get a slice of the profits via DATA tokens (now on a Ethereum sidechain, xDai, to significantly reduce transaction costs) sent into their crypto wallets (Streamr is working on a product to collect all revenues from all data unions in one place).
So far more than 15,000 people have joined the union, providing so-called “zero-party” data pooled at scale. There are more than a dozen different unions like Swash currently operating or in the works, including a financial transaction union, a fitness data union, which crowdsources Fitbit user data, as well as one for Spotify users.
“There is a graveyard of data union projects, it’s not an original idea – the problem has always been a technical one,” Malik told FN. “[But] we are now in a position where we have a good number of data unions being built.”
As to how old the idea is, Chris Downs, the CEO of Normally, wrote about trying to sell his own data in 2000. In short, the experience was “clumsy, frustrating and disorganised”. Beyond the technical advances since then, there is also some regulation on the way which will help the drive towards data unions.
Just over two years after its landmark General Data Protection Regulation came into force, the EU proposed a Data Governance Act. If passed, the legislation will create a new regulatory regime for data sharing and force data brokers to have fiduciary duties of care (like lawyers, doctors or accountants).
For Malik that means the whole business of data broking will become “less sordid”, whilst helping establish the importance of data unions/cooperatives at a time when personal data is allegedly becoming the “new oil” of the internet.
So, what’s next? Malik expects there to be several ways to join a data union in the very near future, including smartphone apps, hardware-linked devices (hooking up your fridge, car or washing machine, for example) and more browser plugins like Swash.
“For members there won’t be huge amounts of money to begin with.” he said, estimating potential revenues of $4 to $5 per month from the exercise. “The idea is that this is passive income that you make. But you don’t have to keep doing something, just occasionally check-in with your wallet.”
For economies, though, data unions and the embrace of real-time personal data portability, as opposed to the status quo of digitised information being “locked” in organisational silos, could be transformative.
The UK could increase its GDP by £27.8bn by championing data mobility, according to a 2018 report commissioned by the Department for Digital, Culture, Media and Sport.
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