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“Have you heard about Secret?” This was perhaps the most ironic question asked throughout the SXSW Interactive Festival in Austin earlier this week.
New apps such as Secret, Whisper, Glimpse, Omlet.me and Cyber Dust were among the “we’re more safe and private” options that were the center of conversation at SXSW.
Just a year or so ago, Millennials were being scolded for oversharing. Overnight, they've become security conscious. The paranoia was reflected by the lineup: Notable speakers included Julian Assange and Edward Snowden (both appearing via live broadcast) and Mark Cuban (who took time away from promoting the Dallas Mavericks to promote his Cyber Dust app.)
Like it or not, they are the sign of the times.
The Internet has moved from being a carefree place to one where it is clearly understood that consumers' information is vulnerable. Snowden, who declared “mass surveillance is setting fire to the future of the Internet," fanned the flames. So did Assange, who referenced “the military occupation of the Internet space."
That invective played out against a backdrop of recent hacks of Snapchat, Target, Nordstrom and Meetup.com. If you're not convinced the government is out to get you, then how about your garden-variety hackers?
Another question: What does it mean for the ad business?
The answer: Not much — At least, not immediately.
Despite the hue and cry, there's little evidence that users are planning a mass revolt in the name of privacy. In particular, Snowden's protestation that Google and Facebook use customers' information for — gasp! — advertising is likely to amount to very little.
That said, the growing concern about targeted ads and re-targeted ads will gain momentum. If a true backlash ever came to pass, it would have a chilling effect on the ad world. Thanks to behavioral targeting, after several years, Facebook is finally at the point where they're showing users relevant ads in their News Feeds — ads they might welcome and even click on.
Given the huge revenues Facebook and Google pull in from such targeted advertising, their response to Snowden's advice is likely to be "thanks, but no thanks."
It is possible that Facebook and Google won't get to decide. The runaway success of Snapchat and WhatsApp have threatened the way Google and Facebook do business. Still, neither tech giant is hurting right now. Although WhatsApp recently got a huge $19 billion proposed payday from Facebook, it doesn't make anywhere near the kind of money that Facebook does. As Facebook's move (and Google's reported interest) show, though, both are closely monitoring this whole privacy craze.
And that's what this may turn out to be. After all, this is a market of apps that's driven by teens, a capricious demo. More likely, consumers will decide that they like to use a combination of private and public communication platforms.
Of course there is a good chance private apps may not stay private. Evidence suggests that the ad world is already penetrating Snapchat, for one. Snapchat last October introduced Snapchat Stores, a longerlasting (24 hour) format that's perfect for brands. WhatsApp is famously resistant to advertising, but the idea of Facebook introducing ads on the app is not out of the realm of possibility, especially after Instagram.
If that's the case, then some users who fled Facebook and Google specifically to avoid ads will be rattled. That being said, offering consumers a choice of paying a subscription to avoid ads is a viable alternative (after all, the Google’s of the world will still make revenue.) Although many consumers have been hesitant to pay extra for something they can get for free anyway (albeit with the inconvenience of ads.)
So despite the fact that privacy has crept into our consciousness in a big way, very little will likely change in terms of advertising revenue models — no matter how dire the warnings.
Kenneth Hein is the global marketing director for Gyro