12/17/2010 03:04 pm ET Updated May 25, 2011

Privacy Is Not Free; Consumers Are Not Cheap

Corey Kronengold raises several important points in a post at DIGIDAY where, in essence, he argues a point made by others that privacy is not free: if consumers want content that is free they need to relinquish some privacy in order to enable the advertising that will pay for the content. Otherwise, last one out turn off the lights.

Maybe. Maybe not.

Consider this: maybe consumers should argue that they are not free, nor are they cheap, and if advertisers want to reach them they will have to pay the full value of the connection that comes through their publisher proxies.

Research that Burst Media released this week documents that consumers are well aware advertisers are following them around the internet based upon their observed media behavior (visits to travel and food sites, etc). No surprise, most of them don't like it or don't care. This would be the group of consumers that advocates of "privacy is not free" would like to reach with the message that audience tracking is good for them.

The economics behind that message, however, is broken. The value of an audience erodes very quickly when it is separated from the content that helped define it -- equivalent to driving a car off the dealer lot. Typical third-party audience prices online confirm this. Accordingly, the full value of the Internet marketplace as it relates to consumer, publisher and advertiser is being smothered today by audience targeting, itself confirmed by the fact that the internet meets or exceeds every media metric set by its competitors offline except for ad spending. This is why. Look no further. Media value is a prisoner online, cut-off from its roots, which are content.

Corey writes:

"Our ability to create or identify the value of those [independent of content] audiences sustains the long tail of the web where the inherent value of the content might not support its own existence."

Like the Great Wall of China, the only observable feature of the Internet from space is the long tail. If, as Corey proposes, the value of content in the long tail is incapable of supporting its own existence the internet has a problem, worth billions. In actual fact, however, there was a long tail and content and consumers of that content before there was advertising; meaning, as usual, that advertising is really the weak force in the media equation. The strong force is the connection between content and audiences. It is strong enough, in fact, to radiate energy worth a $1.00-$2.00 CPM even after audiences have spun-off from one destination to another in internet space.

Agreed. Privacy is not free. But privacy is not part of the media value equation, as in, media value = audience reach -- audience privacy. If it were, TV would have been dead a long time ago. If it were, magazines would have converted subscription information into a vital, renewable resource. Sadly, we know, the opposite is true: renewals are down.

Renewals are down because content is free and content is the binding and disruptive media agent. Splitting the privacy atom online releases a puff of smoke, a bag of audience marbles that ricochet across the floor and a rash of consternation. Splitting the content atom releases - well, so far, Google is a pretty good example.