By Chris Dannen

Blame Gmail for our collective identity crisis: Is it better to be yourself online or to stay anonymous?

In 2005, interest in Google’s new email app Gmail began to spike. As a way of controlling growth, Google allowed users to issue a handful of invites to friends. After clamoring for an invitation new users found something odd going on behind the gates: people on Gmail used their real names. Perhaps because the program was an outgrowth of Google’s internal mail system where many used the “firstname.lastname@gmail.com” formula, it made the handle, or online pseudonym, seem quaint. We all felt a little like Googlers bouncing around a safe, ostensibly spam-free safe zone, throwing around surnames as we never would anywhere else.

Were this AOL Instant Messenger, we might have been “lazyguy113.” On MySpace we would have been “fairy_princess99.” But on Gmail we were ourselves. Facebook arrived almost concurrently but its walled-garden approach kept growth and news coverage even more restrained than Gmail’s. In 2006, when Facebook began opening to more colleges, many of the students who adopted it were already on Gmail. Perhaps because Facebook, like Gmail, had grown out of another real life community — the Ivy League — the real-name convention was in place there too. Crossover from Gmail cemented it and a new online convention was born: the anonymous handle was no longer cool.

What’s the benefit of being honest?

Just this year, Mark Zuckerberg told an audience at f8, Facebook’s developer conference, that using a fake handle online was an example of a “lack of integrity.” In this new social graph, the use of your real ID online has apparently become an issue of moral uprightness — after all, don’t we all want accountability and reliability for every citizen of the social graph? And doesn’t Facebook want the advertising premium that comes with rich data tied to real individuals?

The subject of privacy serves as ammunition on both sides of the debate. Advocates of using your real identity online would say that with proper privacy controls in place there’s very little downside to using your real name. They point out that the benefits can be considerable: you can connect easily with real-life friends, network for your career, and claim attribution for things you create online. Advocates of anonymity, like Christopher Poole, founder of the web’s arcane, hilarious, and often-filthy message board, 4chan.org, has said that the use of real names encourages self-censorship and muzzled discourse. Web coders would argue that anonymity is also an elegant solution to the privacy problem; many of the engineers who build these online tools have said that anonymity would preclude them from having to construct elaborate lines of defense against identity theft. Politicians might counter that having real online IDs helps grassroots activity. But it’s in the online advertising industry, where data anonymization has been the lamented norm for decades, that the most severe disruption is primed to take place.

The ability to collect real information about real consumers had once seemed impossible online; without names, all a website can clean it's visitors is their IP address — strings of numbers that contain no meaningful information about the people behind the screen. Meanwhile, magazine and newspaper publishers were making billions selling their treasure troves of subscriber names and addresses to merchandisers and advertisers

Advertisers know everything about you. Is it freaky or convenient?

That world once seemed closed to online publishers. But with the boon of real identification online, more and more web companies are finding ways to exceed the dreams of even the most ambitious print publishers, by collecting detailed, individualized data on what John Smith is buying — plus when he is buying it, and with whom. E-commerce and social web companies are harvesting some of the most valuable consumer data in history: Amazon, Mint, eBay and Facebook (with its “like” button) are all eager to guzzle information about their users’ buying habits, which they can then sell off to advertisers at a premium. The popularization of the smartphone has allowed those sites to add geographical context to this data on purchasing, which makes it even more valuable.

Well-backed startups have also entered the field, including Swipely and Blippy, two sites which allow users to share their credit-card purchases with Facebook friends; Milo, which allows customers to view brick-and-mortar stores’ inventories online; and Groupon, which gives users group discounts on high-ticket items. Retailers and advertisers would argue that more detailed data about what you want to buy will lead to more relevant advertising for users. It also allows stores to adjust inventory on the fly, lets suppliers measure real-time supply and demand by region, and helps marketers understand consumer purchasing habits.

People like Zuckerberg argue that if their companies can deliver hard information on actual or intended purchases, advertising metrics will be revolutionized. The revolution: measuring ads in dollars spent — not just ad “impressions” or “page views.”

What’s really at stake? Untold billions for the company with the right data to sell. Here’s one potential benefit to consumers: pricier advertising could fund higher-quality online content that could rival the kind we now expect from print publications and cable television. But the cost to consumers is, so far, an unknown externality.

[Banner image by Timon Studler, via Unsplash]