The application that is selling you
I just spent a week in beautiful Costa Rica. My family and I swim, sail, dive, communicate with wildlife, and parachute above the Pacific Ocean.
We didn’t see any Pokémon. That’s because, unlike much of the rest of humanity, we weren’t looking for anyone to use the app that has taken the world by storm: Pokémon Go.
Surprisingly, my pre-teen daughter didn’t object to our Pokémon-free existence. To my great satisfaction, he seems to enjoy more cerebral activities … mainly.
But even if he had begged me, I would have refused to give in. There is no Pokémon Go for us. That’s because I don’t feel like turning my family into negotiable data points … and neither should you.
Unfortunately, Pokémon Go is the least of our concerns in this regard …
Pokémon Go: the product is YOU
Veterans like me remember paying for software. Do you remember updating to a new version of Windows or Microsoft Office every year? In those days, getting complex apps for free, like those available for today’s smartphones, was unthinkable.
This is because, until about five years ago, the software itself was the product from which developers made a profit. It was no different from selling cars, refrigerators, or any other complex-made product.
No more. I still pay a nominal fee each year to “subscribe” to updates for some software products, but many of the ones I use every day are completely free.
It is not that they are cheap to develop, quite the opposite. Today’s software is much more complex and powerful than the stuff we used to pay hundreds of dollars for.
This is because current software is not the revenue-generating part of the business model. It is not the main thing that is sold for profit.
Beware of gift-bearing geeks
In recent years, I have repeatedly warned that piracy is only part of the threat of the digital age. Less obvious, and more insidious, is the process by which you become a commodity that the companies whose products they use trade for profit.
The best known examples are the large online groups such as Google and social networks such as Facebook. Both provide their services to the user for free. Both of you, however, spend most of their efforts not on improving those services, but on gathering information about you that can be sold to the highest bidder.
My favorite example is the poor man who Googled “pancreatic cancer” and started seeing online advertisements for funeral homes. Another is the parent who received an email from some business with the words “DAUGHTER DEATH IN A CAR ACCIDENT” printed on the envelope. Some idiot had misconfigured the marketing algorithm and the targeting criteria were being printed on thousands of emails.
Google and Facebook (and many others) started making money selling micro-targeted online ads to third parties like those funeral homes. But they quickly learned that they could make even more money selling the data that advertisers use to microtargeting. Precise figures are hard to come by, but with marketers reporting a 200% to 300% increase in revenue using such data, it’s safe to say that big data collectors are coining it by selling to them.
Pokémon Go takes this one step further. It does not have any ads. To the user, it seems completely ad-free. But advertisers will continue to pay to reach those users … in a much more dangerous way.
Go boldly where no app has gone before
Pokémon Go has been downloaded 20 million times in the US It just launched in Asia and Europe. Nintendo’s share price has skyrocketed by more than 50% in two weeks. Pokémon Go has already surpassed Twitter in daily active users and is even closing in on Facebook.
While the app is free, users can make in-app purchases as lures to attract Pokémon to their location or “cages” to keep them inside. Yet the game is about to unleash one of the most powerful ad campaigns in digital history … all by selling frighteningly detailed information about its users.
For example, the app will soon offer “sponsored placements” to paid partners. Geolocation and geofence technology will allow advertisers to target specific buildings and match that with signals from mobile devices. Advertisers will know exactly where you are and will serve ads based on your precise location, just like the infamous scene from a shopping mall in Minority Report.
By paying Pokémon Go developers a large fee, a brand like McDonald’s (whose logo has already been seen in the Pokémon Go code) will be able to turn their stores into desirable locations in the virtual Pokémon universe. That will draw gamers to those places, where they will be tempted to buy “IRL” stuff, in real life. Advertisers will be charged based on “cost per visit,” similar to the “cost per click” that Google charges advertisers.
Initial reports that Pokémon Go collects detailed information from the Google account, such as the content of emails, appear to have been incorrect.
But the app owners don’t need those things. They are going for something bigger. They want to know your location at all times so they can sell that information to the highest bidder.
Judge Louis Brandeis once defined privacy as “the right to be left alone.” If that’s what you want, it’s up to you to make sure it happens.