This book explores exactly this question. Advertising as a marketplace for attention has undergone major structural changes in the past decades, largely driven by the rise of the internet. As a result, the practice of buying and selling billboards in the Mad Men era of the 1960s bears little resemblance to the modern-day marketplace of online advertising.
Today, online advertising is more Wall Street than local bookfair. The exchange of attention is facilitated through a massive global system of digital marketplaces. Attention is not just for sale online: it has been automated and streamlined in ways that we often fail to appreciate.
As they do in modern-day capital markets, machines dominate the modern-day ecosystem of advertising on the web. This method, known in the industry as programmatic advertising, leverages software to automate the buying and selling of advertising inventory.
This is how Facebook and Google—the dominant duopoly—sell the attention they capture on their platforms. But, even beyond these leading companies, advertising both online and offline is increasingly bought and sold by machines. Search advertising, which was the first form to fully adopt this approach, is almost entirely transacted in a programmatic way. Programmatic advertising is dominating the other segments of the digital advertising market as well. As of 2017, programmatic advertising claimed fully 78 percent of the total digital display ad spending in the United States, representing more than $32 billion of activity.13 This trend is set to grow, with projections showing this amount to increase to 86 percent in 2021 as automation continues to replace human buyers and sellers in this marketplace.14
New channels of advertising have also become integrated into the programmatic ecosystem. Advertising distributed alongside online video is now mostly facilitated through this method, accounting for 76.5 percent of the total U.S. digital video ad spend.15 It accounted for some 74.1 percent of U.S. ad spending on mobile advertising in 2017.16 The share of dollars going into programmatic advertising in each of these domains is also projected to rise in the coming years.17 The global infrastructure of programmatic advertising makes it possible to access a seemingly limitless well of opportunities to place ads.
These markets have also radically expanded the scope of who can participate. Programmatic advertising tools are increasingly streamlined for easy use by nonexperts, enabling everyone from the marketing department of Coca-Cola to a local hobbyist blogger to buy and sell attention online. Sophisticated tools for targeting ads and analyzing audiences are more and more available, giving even private individuals the ability to deliver advertisements with a precision that would have been considered unthinkable to the biggest multinationals just a few decades ago.
This was not a foregone conclusion. In an alternative universe, advertising might still have ended up the dominant business model for the web, but the marketplace might have been structured in a very different way depending on how certain choices were made in the history of its development. Markets are designed and implemented by people. Those people make decisions around these economies that subsequently have wide-ranging impact.
In this respect, the resemblance of the online advertising marketplace to the financial markets is no accident. This book investigates the fascinating connections between the finance industry and the evolution of the modern programmatic advertising ecosystem. Financial markets have served as a major source of inspiration in the design of the online ad economy throughout its history, and many of the founding leaders who built these marketplaces hailed from previous careers as brokers and traders in finance.
Why does this matter? Telling this history and exploring these nuances are more than just academic exercises. Because advertising is responsible for such a colossal portion of the money that drives the internet, it is impossible to think about the future of the web without thinking about the future of advertising. Shifts in how attention is bought and sold will have major consequences not only for our everyday experience of the web but also for how the internet affects broad questions of expression, identity, and democracy.
On this count, the parallels between the financial markets and the attention markets reveal crucial hints about what the internet might be evolving toward. Indeed, the rush to architect the buying and selling of attention in the model of the financial markets raises the question of whether some of the problems of the financial markets will follow the attention economies of the web.
There is good reason to believe that the financial foundations of the web are perhaps shakier than we think, maybe even producing the conditions for a “subprime” crisis in attention, similar to the dynamics that brought down the global economy in 2008. Examining these parallels is a key step toward thinking about how society, if it’s not too late, might want to re-architect the web for the better, and about whether the web as we understand it will endure.
1The Plumbing
The jargon of programmatic advertising evokes a vision of the Wall Street of the 1980s. “Trade desks” buy and sell “inventory” on “exchanges.” You might imagine something out of movies like The Wolf of Wall Street and Trading Places: big, cavernous rooms packed with shouting traders in colorful vests. But this vision of how business is done is long out-of-date. The reality resembles the ultra-quantitative, high-frequency trading of Michael Lewis’s Flash Boys more than it does the predigital, smoke-filled rooms of Mad Men.
The manual processes for negotiating the sale of advertising inventory have been replaced over time with something far more mechanized. The trading floors of the global exchanges for attention are a mostly silent affair, a global network of humming servers
