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# E-spending Dips, AI-Content Spam, 'Surveillance Capitalism' in FTC Sights
- URL: https://www.nearmedia.co/e-spending-dips-ai-content-spam-surveillance-capitalism-in-ftc-sights/
- Published: 2022-04-18T17:10:23.000Z
- Updated: 2022-05-05T14:41:42.000Z
- Author: Greg Sterling
- Tags: News

### Stores Come Roaring Back 

During 2020 and the phenomenal growth of e-commerce, the question arose: has consumer shopping forever changed? The answer it turns out is yes *and* no. According to US government [data](https://www.census.gov/retail/mrts/www/data/pdf/ec%5Fcurrent.pdf?ref=nearmedia.co) (Q4 2020), non-seasonally adjusted e-commerce was \~15% of total retail sales. Adjusted data made it 13.6%. (Figures can be [pushed higher](https://www.digitalcommerce360.com/article/quarterly-online-sales/?ref=nearmedia.co) by excluding categories such as restaurants, bars, autos, gas stations.) In Q4 2021, e-commerce was 14.5% (non-adjusted) or 12.9% (adjusted) of total retail – in other words: down. In Q1 2022, online sales again fell year over year. According to Mastercard ([via](https://www.wsj.com/articles/the-pandemic-was-supposed-to-push-all-shopping-online-it-didnt-11650081652?ref=nearmedia.co) WSJ), online spending saw the first annual decline (3.3%) since 2013\. And physical retail store spending was up 11.2%. US consumers have returned to stores and pulled back on e-commerce, which was driven by necessity during the COVID lockdowns. 

![](https://storage.ghost.io/c/03/80/0380d96d-ef7e-450e-96b3-2963e18aaab5/content/images/2022/04/Screen-Shot-2022-04-18-at-7.25.23-AM.png)

Source: US Census Bureau data, WSJ Chart

**Our take:** 

- The simple opposition of stores and e-commerce has never been accurate. Consumers want and use both, based on situational and cost considerations.
- Post-COVID, there's an imperative to more deeply integrate physical and digital capabilities for a better UX. In addition, consumers are now willing to buy a much wider range of things online than pre-pandemic.
- As we've argued, stores support e-commerce. And with CAC up almost 50% over five years, stores offer a less-expensive way to brand build and attract customers.

### Can Google Hold Back AI Content Spam? 

There are amazing leaps happening in AI. As one example, we've focused on Google's [understanding of images](https://www.nearmedia.co/google-and-the-visual-future-of-local-search-part-1/). Google's [use of AI to understand search queries](https://www.nearmedia.co/google-i-o-mums-the-word-maps-shopping-graph/) is another, as are its [new auto-generated summaries](https://ai.googleblog.com/2022/03/auto-generated-summaries-in-google-docs.html?ref=nearmedia.co) in Google Docs. A very (very) long [article](https://www.nytimes.com/2022/04/15/magazine/ai-language.html?ref=nearmedia.co) in the NY Times Magazine chronicles the advances AI has made – specifically OpenAI’s GPT-3 – in "understanding" and replicating human language. GPT-3 can generate content at the level of a proficient high-school student. This is either exciting or scary depending on your perspective. Considerable coverage was triggered by a recent comment from Google’s John Mueller, who [said](https://www.youtube.com/watch?v=Yx997SsiYlw&t=1334s&ref=nearmedia.co) that machine-learning-generated content violates Google [webmaster guidelines](https://developers.google.com/search/docs/advanced/guidelines/auto-gen-content?ref=nearmedia.co). While Mueller's remarks appear unequivocal, Google's guidelines are a bit more gray, and would seem to allow AI-written content in some situations -- if it was coherent and perhaps human-edited.

![](https://storage.ghost.io/c/03/80/0380d96d-ef7e-450e-96b3-2963e18aaab5/content/images/2022/04/Screen-Shot-2022-04-18-at-9.01.19-AM.png)

Source: OpenAI's DALL E2 image generator

**Our take:** 

- AI-generated content, combined with language understanding is going to have a massive impact on multiple fields – for better and worse.
- Does it matter if AI or a person generates the content on a website, provided it's useful and offers the desired information? Maybe not.
- What happens if SERPs get flooded with auto-generated content? This is potentially analogous to what happened with "[content farms](https://www.zdnet.com/article/google-overhauls-algorithm-content-farms-potentially-screwed/?ref=nearmedia.co)" in the late-00s until Google [killed them with an algorithm change](https://googleblog.blogspot.com/2011/02/finding-more-high-quality-sites-in.html?ref=nearmedia.co) in February, 2011\.

### FTC Takes On 'Surveillance Capitalism'

There's evidence that privacy legislation in Congress is [inching forward](https://www.washingtonpost.com/politics/2022/04/13/debate-over-privacy-bill-is-inching-forward-capitol-hill/?ref=nearmedia.co). Whether it will become law is uncertain. But regulators in Europe and the US are moving ahead with tighter privacy controls. Europe's [Digital Market's Act](m) requires opt-in permission for use of personal data for ad targeting. And recently, FTC Chair Lina Khan forcefully spoke at the IAPP conference ([remarks](https://www.ftc.gov/system/files/ftc%5Fgov/pdf/Remarks%20of%20Chair%20Lina%20M.%20Khan%20at%20IAPP%20Global%20Privacy%20Summit%202022%20-%20Final%20Version.pdf?ref=nearmedia.co), [video](https://www.youtube.com/watch?v=DpMrfsTDmP8&ref=nearmedia.co)) about the dangers of unregulated data collection. She observed, users have little choice but to use digital platforms as a practical matter. So "procedural protections" (i.e., "notice and consent") are outdated and insufficient. "Going forward, I believe we should approach data privacy and security protections by considering substantive limits rather than just procedural protections." Meaning: some data collection should simply be off limits. 

![](https://storage.ghost.io/c/03/80/0380d96d-ef7e-450e-96b3-2963e18aaab5/content/images/2022/04/lianhao-qu-LfaN1gswV5c-unsplash.jpg)

Photo by [Lianhao Qu](https://unsplash.com/@lianhao?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)/[Unsplash](https://unsplash.com/s/photos/privacy?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)

**Our take:** 

- FTC Chair Khan's remarks go to the heart of the most-common internet business model: free services for data. Let's see what the FTC does.
- A judiciary (SCOTUS) increasingly hostile to government regulation could decide some of this, if pursued, is beyond the scope of FTC authority.
- AI-based [modeling](https://www.thinkwithgoogle.com/marketing-strategies/data-and-measurement/debunking-marketing-measurement-myths/??ref=nearmedia.co) can potentially compensate for the loss of data for marketers. But the digital-data paradigm is now irrevocably shifting.

## Recent Analysis

- **Near Memo episode 60**: [Paid-search domination, "self-updating" (Google) maps, Mobile SERPs are becoming image SERPs](https://www.nearmedia.co/ep-60/).
- ICYMI: **Google Review Growth Is Down**, [by Mike Blumenthal](https://www.nearmedia.co/google-review-growth-slowing/).

## Short Takes

- **Pinterest** for WooCommerce [makes product catalogs shoppable](https://business.pinterest.com/en/blog/introducing-pinterest-for-woocommerce/?ref=nearmedia.co) Pins.
- Houston Astros [installing](https://www.adweek.com/commerce/checkout-free-mlb-stadium-experience-amason/?ref=nearmedia.co) **Amazon's cashierless tech** in their stadium.
- First [look](https://9to5google.com/2022/04/16/this-is-probably-what-twitters-long-awaited-edit-button-will-look-like-gallery/?ref=nearmedia.co) at **Twitter's edit button** for Twitter Blue subscribers.
- Usual suspects: [2016 speculation](https://www.vox.com/2016/9/14/12876560/twitter-acquisition-options-google-facebook-apple?ref=nearmedia.co) on who might buy **Twitter** and why.
- Opinion: **Elon Musk** [doesn't understand](https://www.techdirt.com/2022/04/15/elon-musk-demonstrates-how-little-he-understands-about-content-moderation/?ref=nearmedia.co) content moderation.
- Confirmation bias: Unforeseen social [consequences](https://www.theatlantic.com/magazine/archive/2022/05/social-media-democracy-trust-babel/629369/??ref=nearmedia.co) of **social media**.
- **Facial rec.** of war dead used to generate dissent in Russia ([WaPo](https://www.washingtonpost.com/technology/2022/04/15/ukraine-facial-recognition-warfare/?ref=nearmedia.co)).
- Tech company [lobbyists coopting](https://www.protocol.com/policy/state-privacy-utah-spsc?ref=nearmedia.co) **privacy legislation** in multiple states.
- **Salary disclosure** law in WA state could spawn others, [change tech](https://www.geekwire.com/2022/new-salary-disclosure-law-in-washington-state-could-spell-big-changes-for-tech-companies/?ref=nearmedia.co).
- **AR glasses** B2B [use cases are emerging](https://www.techradar.com/news/heres-what-a-pair-of-ar-sports-glasses-taught-me-about-the-future-of-work?ref=nearmedia.co), B2C not as much.
- **AR** [expected to change mobile marketing](https://streetfightmag.com/2022/04/18/how-will-ar-glasses-impact-mobile-marketing/??ref=nearmedia.co), will take longer than expected.
- AI [monitors](https://www.protocol.com/enterprise/emotion-ai-school-intel-edutech?ref=nearmedia.co) student **expressions** on video to determine engagement.
- **Videoconferencing apps** [reportedly listening](https://news.wisc.edu/youre-muted-or-are-you-videoconferencing-apps-may-listen-even-when-mic-is-off/?ref=nearmedia.co) even when mic is muted.
- **GoPuff** trying to win in the dubious "instant delivery" market ([NYT](https://www.nytimes.com/2022/04/14/technology/gopuff-delivery.html?ref=nearmedia.co)).
- CA [planning to ban](https://www.protocol.com/bulletins/california-clean-cars-2035?ref=nearmedia.co) the sale of new **gas-powered cars** by 2035\.

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