The field of economics offers an interesting template. Founded in 1920, the National Bureau of Economic Research (NBER) is a “private, non-profit, non-partisan organization dedicated to conducting economic research and to disseminating research findings among academics, public policy makers, and business professionals.”10 The NBER’s first effort was a pioneering study measuring national income, a critical basic metric for measuring a “nation’s economic well-being [in] quantitative form,” which had previously been unknown.11 Over the subsequent decades, the data and research released by the NBER have played a major role in shaping thinking around the economy and its management.
Imagine an NBER for the advertising space; we’ll call it the National Bureau of Advertising Research (NBAR). The NBAR could conduct rigorous research on different aspects of the machinery of programmatic advertising, shedding light on previously opaque and murky elements and putting policy around the marketplace on firmer footing. This would allow elements of the bubble to be targeted selectively and focused on, tapping the brakes here and swinging a wrecking ball there as needed to reshape the size and structure of the marketplace.
Advertisers may prove to be allies and supporters of the NBAR, because they bear some of the biggest costs in the current attention marketplace. As the researcher Michael Kaplan notes, the pressure to compete for audience attention online and the declining value of programmatic ads means that the platforms “extract large price surpluses, effectively exploiting their customers [the advertisers].”12 The NBAR would provide those customers with a way of challenging the platforms and a basis on which to exit the market.
What would the NBAR investigate first? Nico Neumann’s claims—that the granular metrics and high accountability of programmatic advertising may not make any difference—might be a good place to start. Along those lines, the NBAR could investigate the intriguing anecdotal evidence that spending significantly less on online advertising actually improves outcomes for the advertiser. In 2017, Procter & Gamble slashed around $200 million of its advertising spending in the digital space, citing concerns about bot fraud and brand safety. This money was reinvested in more traditional advertising channels like television and radio. The outcome? P&G reduced its overall spending and still increased the reach of its messaging by 10 percent.13 More concrete exploration on this front might pressure the market to price the value of online advertising accordingly.
Similar patterns have appeared among sellers of online advertising as well. In response to the new General Data Protection Regulation privacy rules in Europe, The New York Times shut off all open-exchange programmatic buying on its European pages in 2018, preventing ad buyers from using the rich data available about specific consumers. In theory, this should have produced a decline in the demand for the Times’ ad inventory; ad buyers would flow to places with more user data to sell. But the paper’s digital advertising revenue was not affected at all. The Times “briefly tested reintroducing open-exchange programmatic ad buying … but didn’t pursue it.”14 This phenomenon has been analyzed by Dr. Alessandro Acquisti at Carnegie Mellon University, who concludes from his work that it is unclear that data-driven targeted advertising actually produces significant returns. Acquisti’s team found that although targeted advertising increased revenues for publishers, it did so at the barely noticeable rate of about “$0.000008 per advertisement.”15
Well-grounded, hard-hitting research is powerful: it will help to persuade advertisers and publishers to leave the programmatic marketplace, and may even shape the behavior of consumers at large—say, through accelerating the adoption of ad-blocking technologies or encouraging people to switch to alternative platforms not based on advertising. All this would help produce a managed crisis in subprime attention.
But we cannot be confident that the NBAR alone would bring down the programmatic marketplace, given how profitable a willful ignorance about programmatic advertising can be. The effort to help ground public and policy-maker understanding of the internet’s attention marketplaces can and must be complemented by more aggressive action from activists and whistleblowers. This could take the form of a more aggressive style of research, demonstrating the vulnerabilities of the marketplace with direct action: distributing scads of faulty consumer data in order to evaluate the lack of quality control among those buying and selling these assets, or running coordinated algorithmic bidding scripts to identify how the programmatic auction system can be manipulated. Leaks can reveal the extent to which platforms, agencies, and other actors in the ecosystem are behaving badly, and simultaneously keep those actors on their toes. Anonymous online submission systems for whistleblowers to securely leak documents around wrongdoing in the digital advertising industry could be a good way to encourage this activity. These more provocative actions could help to adversarially target and demonstrate the vulnerabilities of more intransigent actors that would otherwise resist their profits shrinking.
As in the financial markets, governments and regulations will have an important role to play. The success of even a relatively tame version of the NBAR would depend on the ability of that organization to accurately assess the state of the marketplace and to conduct experiments that truly scrutinize the claims of the industry. Vested interests within these marketplaces are not likely to grant such access willingly. In the past, access to the inner workings of the programmatic advertising infrastructure has been only grudgingly given by companies after the industry has come under public criticism and business pressure. More consistent disclosure will be critical to the project of a graduated dismantling of the subprime attention bubble.Disclosure and Stability
The toxic blend of eroding value, market opacity, and bad incentives is producing
