I didn’t really go looking for this particular constellation of ideas,
but several good pieces really got me connecting the dots and this
month’s letter represents an effort to spell things out with regard to
surveillance.
1) The Economist published one of its special reports on September 13 on
online advertising. Entitled “Little Brother,” the report argues that
mobile devices combined with social networks are providing advertisers —
and more importantly, a complex ecosystem
of trackers, brokers, and aggregators illustrated in Luma Partners’ now-famous eye-chart slides —
with unprecedented targeting information. One prominently quoted survey
asserts that marketers have seen more change in the past two years than
in the previous 50. Among the biggest of these shifts: programmatic ad
buying now works much like algorithmic trading
on Wall Street, with automated ad bidding and fulfillment occurring in
the 150 milliseconds between website arrival and page load on the
consumer device.
[As I type this, Facebook announced that the firm made $3.2 billion in
one quarter, mostly from ads, nearly $2 billion of it from mobile.]
Given that surveillance pays dividends in the form of more precise
targeting — one broker sells a segment called “burdened by debt:
small-town singles” — it is no surprise that literally hundreds of
companies are harvesting user information to fuel the bidding
process: online ad inventory is effectively infinite, so user
information is the scarce commodity and thus valued. This marks a
radical reversal from the days of broadcast media, when audience
aggregators such as NBC or the New York Times sold ad availability
that was constrained by time or space. Thus the scarcity has shifted
from publishers to ad brokers who possess the targeting information
gleaned from Facebook, GPS, Twitter, Google searches, etc. Oh, and
anyone who does even rudimentary research on the supposedly
“anonymous” nature of this data knows it isn’t, really: Ed Felten, a
respected computer scientist at Princeton, and others have repeatedly
shown how easy de-anonymization is. (Here’s one widely cited example.)
2) In another sign that surveillance is a very big deal, not only for
advertising, the always-astute security guru Bruce Schneier announced
that his next book Data and Goliath, due out in March, addresses this
issue.
3) Robots, which for our purposes can be defined as sensor platforms,
are getting better — fast — and Google has acquired expertise in several
forms of the discipline:
-the self-driving car (that has severe real-world limitations)
-Internet of Things (Nest and Waze)
-autonomous military and rescue robots (Boston Dynamics and Schaft).
4) A September 28 post by Steve Cheney
raised the prospect of Google moving some or all of the aforementioned
robot platforms onto some version of Android. While he predicted that
“everything around you will feel like an app,” I’m more concerned that
every interaction with any computing-driven
platform will be a form of surveillance. From garage-door openers and
thermostats to watches to tablets to “robots” (like the one Lowes is prototyping for store assistance)
to cars, the prospect of a Google-powered panopticon feels plausible.
(I looked for any mention of robotics in the Google annual report but
all the major acquisitions
were made in this fiscal year, so next year's 10-K will bear watching
on this topic.)
5) Hence Apple’s recent positioning makes competitive sense. When Tim Cook said “A few years ago, users of Internet services began to realize
that when an online service is free, you’re not the customer. You’re the
product.” he was ahead of the curve, I believe:
according to the Economist report, only .00015% of people use those
little triangle things to opt out of online ad tracking. In Cook’s and
Apple’s narrative, premium prices implicitly become more reasonable to
those who value privacy insofar as there is no
“audience commodity” as at eBay, Amazon, Google Twitter, or Facebook.
6) One other thing to consider here is how that information is being
processed at unprecedented scale. When The Economist noted the likeness
of ad-buying to algo trading, we enter the world of artificial
intelligence, something Google counts as a core competency,
with 391 papers published not to mention untold portions of secret
sauce.
Some very smart people are urging caution here. Elon Musk was at MIT for
a fascinating (if you’re a nerd) discussion of rockets, Tesla, the
hyperloop, and space exploration. Thus for someone serious about a Mars
space base to warn against opening an AI Pandora’s box was quite revealing:
“I think we should be very careful about artificial intelligence. If I
were to guess like what our biggest existential threat is, it’s
probably that. So we need to be very careful with the
artificial intelligence. Increasingly scientists think there should
be some regulatory oversight maybe at the national and international
level, just to make sure that we don’t do something very foolish. With
artificial intelligence we are summoning the demon. In all those stories
where there’s the guy with the pentagram and
the holy water, it’s like yeah he’s sure he can control the demon.
Didn’t work out.”
(The complete MIT talk is here)
Musk is not alone. The University of Oxford’s Nick Bostrom recently
wrote Superintelligence (maybe best thought of as an alternative
excursion into Kurzweil-land), a book that quite evidently is grappling
with the unknown unknowns we are bumping up against.
He knows of what he speaks, but the book is, by his own admission, a
frustrating read: no generation of earth’s population has ever had to
ask these questions before. The book’s incompleteness and tentativeness,
while making for a suboptimal read, are at the
same time reassuring: someone, both informed and set in a broad
context, is asking the questions many of us want on the table but lack
the ability, vocabulary, and credibility to raise ourselves.
********
In a nutshell, there it is: mobile devices and social networks generate
data points that supercomputing and sophisticated analytical tools turn
into ad (or terrorist, or tax-cheat) profiling data. Computing liberated
from desktop boxes and data centers moves
in, and acts on, the physical world, extending surveillance further.
Apple positions itself as a self-contained entity selling consumers
stuff they pay for, not selling eyeballs/purchase histories/log-in
fields/expressed and implied preferences to advertisers.
In sharp contrast, Google has repeatedly shown — with Streetview, wi-fi
access point mapping, Buzz, and Google+ — a desire to collect more
information about individuals than many of those individuals would
voluntarily reveal. With AI in the picture, the prospect
of surveillance producing some very scary scenario — it may not
accurately be called a breach, just as the flash crash wasn’t illegal —
grows far more likely. Human safeguards didn’t work at the NSA; why
should they work in less secure organizations? Like
Bostrom, I have no ready answers other than to lead a relatively
careful digital existence and hope that the wisdom of caution and
respect for privacy will edge out the commercial pressures in the
opposite direction.
Next month: unexpected consequences of a surveillance state.