Gener8 has received a lot of attention on LinkedIn and Facebook. This is thanks to an excellent pitch by founder Sam Jones on the popular TV show Dragons Den. In this article, we unpack Gener8, cookies, and glance at the not-so-distant future of targeted advertising.
What is Gener8 and why is everyone so interested in it?
Gener8 offers customers the ability to control and be rewarded for their own data (see their blog post for more information)
There are currently two ‘modes’ when you use Gener8.
- Privacy mode: This stops companies from ‘tracking’ you.
- Rewards mode: You monetize your own data through viewing Gener8 adverts.
Earning a reward for simply being you, and sharing your data with companies is a compelling thought. After all, most of us aren’t currently benefiting from our personal data. For those of us who are more privacy-focused, stopping companies from tracking you and serving you targeted adverts sounds equally compelling.
Sounds good, but how does Gener8 work? Cookies apparently.
Hope you weren’t hungry before you read this.
In his pitch on Dragon’s Den, Sam Jones equates cookies to trackers but what are they really? According to the internet security firm, Norton cookies are unaltered data that a computer receives and sends back. This cookie is stored as a file on your internet browser. The purpose of these cookies is to help a website keep track of you. Before you panic and feel like you have already arrived at the dystopian surveillance state from the classic, 1984, Cookies are not all bad.
Imagine you added a lot of nice things to your cart on your favorite online store. Whoops, you close the website by mistake in your relentless search for funny cats on YouTube. Cookies save the day. They help the online store remember what was in your cart when you reload the website. They also do other useful stuff, like ensure you don’t have to remember and keep entering that painfully long, and unique 14-digit alphanumeric password, we all love. These helpful cookies are called first-party cookies. Think of them as your Grandma’s cookies. Mostly, warm and lovely. These cookies belong to the website you are visiting.
What Sam Jones is really talking about is third-party cookies.
As the name suggests, these cookies belong to someone else and not the website you are visiting. Targeted advertising is possible because of the data which these third-party cookies collect. They are the reason why the cool product you just clicked on and added to your cart on that eCommerce shop you love, can be seen as an advert on an unrelated website you visit.
Gener8 also utilizes a form of targeted advertising in ‘rewards mode’, except there are two key differences:
- Choice: You are able to manually select the types of adverts you want to see. This is currently being done automatically by data collectors.
- Money: You get a share of the advertising spend in the form of rewards. Previously data collectors, data brokers and advertising providers were the only ones that benefitted.
Third-party cookies have been under pressure for a while. Gener8 is actually late to the game.
You already need to get active consent for cookies in the European Union. This is a fancy legal term which means they have to ask you directly and make you aware that you are being tracked. In 2019, it was ruled by Europe’s highest court that users in the EU must actively consent to all cookies. Legal intervention is notoriously slow and is frequently outpaced by technological innovation. This means that concerns over how cookies can be used maliciously have been around for a while. More recently, Apple has made a controversial move to limit targeted adverts on their devices. Google is also in the process of phasing out third-party cookies, which is something the browser’s Firefox and Safari have already done. Additionally, tools to stop companies from tracking you have been around for a while (see AdBlock).
Based on this, I think Gener8’s privacy mode isn’t the most compelling thing about the business. Before Gener8 existed, you could limit third-party cookies using tools like AdBlock (if your browser was not already doing so.) It is also unclear how they will generate revenue from the ‘privacy mode’ offering. It seems most of their revenue is reliant on ‘rewards mode’, and taking a cut of the revenue generated by their customers. Instead, I believe Gener8’s rewards mode is the most compelling and game-changing. Consumers can finally start benefiting from an asset they have always owned, their personal data. This misalignment between ownership and benefit has been overdue for a change.
Now that the change is here what does the future look like?
I can imagine two very different futures, as a result of the shake-up in targeted advertising and the birth of innovative companies like Gener8.
Targeted advertising allows businesses to show their adverts to consumers who are likely to generate sales. This was revolutionary. It allowed businesses to segment and target specific customers over the internet. Previously, businesses could not do this and had very little assurance that adverts in magazines, newspapers, and on television were being presented to consumers who could generate sales for their business. This led to businesses placing a higher volume of adverts in a wider variety of places.
If consumers continue to take steps to limit the collection and monetization of their personal data by third parties, businesses may have to readopt this approach. This may unintentionally cause small businesses to suffer, as they will have to compete for less specific audiences at higher costs. Google’s development of a privacy sandbox somewhat supports this view. Google is moving towards tracking groups of people rather than individuals, which de-emphasizes the power of targeting specific user groups (see the announcement here)
I believe better-targeted advertising is also possible in the near future as a result of the shake-up and innovation in the space. Gener8 is so compelling because it allows users to exchange their data for a reward. Imagine that a company provided a bigger reward if you verified the data that you provided was correct (through a government entity like home affairs for instance). This would mean companies and data collectors have more accurate information about you.
This would enable targeted advertising to get better, as businesses can be assured they are targeting a specific customer that they believe will generate sales. This reality is not far-off and a new technology called self-sovereign identity technology may make this a very feasible reality (check out Sovrin for more information on this).
I love seeing businesses like Gener8 emerge and gain wide publicity. Game-changes like Gener8 will redefine old business models, change industries and there will be clear winners and losers. Is your company prepared?
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Matthew Hendricks is a Ph.D. researcher at the University of Cape Town, currently focusing on Blockchain technologies and their intersection with marketing. Matt loves writing about tech. and how it might impact the world we live in.