The overall impact of these shenanigans is twofold. First and most obviously, prices will remain inflated, imposing costs on advertisers and publishers. Less obvious but more dangerous in the long run is that these profits eliminate any incentives to change practices within the industry. The money is simply too good. It will keep the market from adjusting quickly and appropriately to structural weaknesses in the value of online advertising, allowing the formation of a bubble that will continue to grow until it pops.What Comes Next?
Market bubbles are the result of harmful, self-reinforcing cycles between buyers and sellers that escalate out of control. These cycles can be surprisingly robust, and bubbles can continue growing long after the underlying economic situation has changed. Mortgage-backed securities continued to inflate home values long after a close look at mortgages would have revealed the inability of a massive number of borrowers to repay the loans.
The same is true in the online advertising space. Digital marketing is succeeding in spite of the deep structural issues of fraud, opacity, and falling effectiveness. The shrinking of legacy advertising channels has produced a stream of dollars largely unresponsive to these problems. At the same time, agencies and ad technology companies face perverse incentives to avoid slowing this flow of dollars and, quite the opposite, work to constantly juice the marketplace. The result is that the market for digital advertising grows, divorced from the reality of how ads are actually functioning.
Bubbles pop, of course. And when they do, it’s loud.
6Exploding the Bubble
Commodifying attention has had a huge impact on the development of the internet. On the one hand, it has enabled massive economic growth and made a wide set of online services accessible to the public in a way that they might not otherwise have been. On the other hand, commodification has introduced a range of structural vulnerabilities that raise questions about the long-term sustainability of the modern model of digital advertising, and therefore the internet itself.
The previous few chapters have laid out this case, outlining how the confluence of opacity, falling asset values, and bad incentives seem to echo previous crises. The financial crisis of 2008 has served as an uncannily good guide in highlighting the corrosive market dynamics playing out in today’s online attention markets.
So what should be done about the precarious state of this economy? Advertising has been the dominant model for making money on the internet in the last few decades. But if the market is fundamentally unstable over the long term, as the financial markets were before the subprime mortgage crisis, what should we do about it?
We should see these structural instabilities as an opportunity. Online advertising has long exerted a corrosive effect on the design of the internet, and the perverse incentives to inflate the bubble make it difficult for alternative business models to emerge. Rather than trying to fix a broken market, we should work toward a controlled demolition that reduces its influence in the long run. The vulnerabilities I have laid out chart a path forward, not toward fixing what has long been a problematic system, but toward starting the internet anew.Against Programmatic Advertising
There are good reasons to dislike the online advertising economy. Many of these critiques are well established and have existed since advertising emerged as the primary business model for funding the internet.
First, an advertising-driven online economy relies on effectively invading the privacy of consumers, a model that critics have labeled “surveillance capitalism.”1 Second, incentives exist for online platforms to continuously manipulate user behavior and seize user attention in ways that may be harmful to mental health and personal development.2 Third, online advertising incentives promote the creation of media that is shocking or reaffirming to the viewer, producing polarization and supporting the formation of echo chambers.3 These long-standing critiques have been an aspect of commentary about the internet for decades. One early web pioneer involved in the creation of the pop-up ad, Ethan Zuckerman, has called advertising the internet’s “original sin.”4
These are general arguments against online advertising. The rise of programmatic advertising—as a distinctly commodified, financialized means of buying and selling attention online—adds a unique set of ills to this list.
Commodification implies standardization. In online advertising, buyers want to know exactly how much attention they can purchase with their available budget. Publishers want to streamline sales by providing a simple menu of attention inventory to buy. This requires that online platforms be actively architected in a way that standardizes user engagement and attention.
In Seeing Like a State, James C. Scott explores a helpful notion of what he terms “legibility.” In order to administrate at scale, governments and large bureaucracies need to be able to see the world effectively. The result is that the world is actively shaped in order to enable administration. To set up a system of taxation, for instance, it is necessary to create a system of fixed identities so that the government can track over time which people have paid their taxes. Establishing a legible system of fixed identities may necessitate cultural changes, like introducing the concept of a last name to cultures that previously did not have one.5
Legibility has shaped the media channels through which advertising has flowed. The creation of the television sitcom, with its consistent, recognizable setting and characters, is historically linked to advertising sponsors’ need to approve content and promote products.6
Social media is no different. The need to create a liquid market in human attention influences the architecture of the social spaces of the web. Commodification requires attention to be legible: in other words, the internet must structure “engagement” in a way that is easy and accurate to measure.
Social interaction between people is mediated by structured tags such as “like” and “favorite” because these render sentiment easy to measure. Even features that we take for granted, such as requiring user registration to create a profile, are
