MEDIA PERSPECTIVES - February 18, 2015

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Behavioral Targeting: The New Snake Oil
By: Jaffer Ali
(Originally Published: March 12, 2013)

Back in the 19th century, traveling salesmen went from town to town touting "magic elixirs" sure to cure whatever ails you. One such elixir contained a dose of snake oil, championed by its promoters for its eternal essence...after all, snakes had been around since Eve first tempted Adam in the Garden of Eden.

Behavioral Targeting (BT) is the new snake oil, a veritable cure-all for the online marketing industry. There is a difference, however, between BT and 19th-century snake oil; those touting BT actually believe they have a magic elixir while the itinerant salesman in the Conestoga wagon knew full well that he was fleecing the unsuspecting and gullible town folk.

Upon closer examination, the rancid formula of this "BT elixir" should give any and all in the media food chain pause for concern before ingesting. And though the list is long, space considerations compel me to reveal what I consider to be the three most toxic ingredients:

The Creepy, Immoral, Stalking Ingredient

Just so you know what I mean by Behavioral Targeting, let's use the FTC's definition below:

"... the tracking of a consumer's activities online - including the searches the consumer has conducted, the web pages visited, and the content viewed - in order to deliver advertising targeted to the individual consumer's interests."

BT is an invasion of our privacy -- even if we opt-in to the process -- often yielding personal data easily obtainable through government subpoena. The purposely stealth nature of this pseudo science evokes chilling, Big Brother-esque imagery, and defies the notion that something of such questionable moral foundation could proceed this far unchallenged.

The fact that private industry now works in tandem with the government to stalk and track us online may deflect but cannot dilute the moral argument. It seems little considerations like the prohibitions against "unreasonable search and seizure" enshrined in our Bill of Rights never made it onto the BT agenda. The invasion of our privacy is 180-proof pure snake oil.

The Case of Spurious Predictors

Once upon a time, Wall Street hired thousands of learned mathematicians to portend the future of the financial markets. They poured over millions of transactions and developed sophisticated algorithms to predict market trends.

One economist, Myron Scholes, won the Nobel Prize for his algorithm. Science was heralded as a welcome savior capable of taming the chaos of the stock market. The underlying principles of the subject mathematics were developed by another Nobel Prize winner, John Nash. According to Nash's game theory, there was an underlying predictive order to minute human interactions.

The mission was clear: Amass enough data and the PhD's could ferret out the predictive variables. The triumph of science!

Only one problem: THEY WERE ALL WRONG!

John Nash recanted his earlier theories with the disclaimer that he was a schizophrenic paranoid during the years he developed them, and that their underlying assumption of inherently rational human behavior was flawed and incorrect.

None of the models that identified predictive variables envisioned the bus careening off the cliff because all of these models were conceived through the rearview mirror. The flawed variables derived from past, irrational behavior did not (COULD NOT) predict the devastating financial collapse that ensued.

Thousands of suddenly unemployed PhD's left Wall Street. Where did they end up?

Next stop: Madison Avenue; Google and BT shops.

The underlying mathematical ingredient of BT is snake oil, but with a spoon full of sugar to help the medicine go down.* As instability increases, mathematical reductionism, with its penchant irrépressible for viewing behavior through the rearview mirror, renders predictions of future behavior untenable. Simply put again for emphasis, driving by looking in the rearview mirror is a sure recipe for disaster.

The Mythical Relevancy Ingredient

The main ingredient in this serpentine concoction is relevancy, the composition of which comprises "getting the right ad in front of the right person at the right time." It sounds so logical and reasonable.

Of course, witch trials were also considered logical and reasonable once upon a time.

What the relevancy ingredient assumes is that people want relevant ads. In truth, the data suggests just the opposite. They don't want ANY ads at all! But by asking questions in a subjective, self-serving manner, you can pervert the Socratic method to get the answer you want. Former FBI director Louis Freeh said:

Ask the American public if they want an FBI wiretap and they'll say, "no." If you ask them do they want a feature on their phone that helps the FBI find their missing child they'll say, "Yes."

If audiences are asked, "Do you want more ads?" all data suggest they will answer with a resounding NO! But if they are first asked, "Do you prefer relevant ads over irrelevant ads?" they may reasonably, albeit reluctantly, say yes. Ask a stupid question, get a stupid answer.

In an on-demand world, nobody demands more advertising. An audience so empowered makes advertising a challenging endeavor, especially when all this snake oil leaves such a bad taste in our mouths.

* For a thorough examination of the mathematical nonsense, I refer you to Nassim Taleb's two books; Fooled by Randomness and The Black Swan

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Original Article: Behavioral Targeting: The New Snake Oil

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