In "Behavioral Advertising and Consumer Welfare," business researchers from #CarnegieMellon and #PamplinCollege investigate goods purchased through highly targeted online ads and just plain web-searches, and conclude social media ads push overpriced junk:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4398428
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If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2023/04/08/late-stage-sea-monkeys/#jeremys-razors
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Specifically, stuff that's pushed to you via targeted ads costs an average of 10 percent more, and it significantly more likely to come from a vendor with a poor rating from the #BetterBusinessBureau. This may seem trivial and obvious, but it's got profound implications for media, #CommercialSurveillance, and the future of the internet.
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Writing in the #NewYorkTimes, @Julia - a legendary, muckraking data journalist - breaks down those implications. Angwin builds a case study around #JeremysRazors, a business that advertises itself as a "#woke-free" shaving solution for manly men:
Jeremy's Razors spends a fucking *fortune* on ads.
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According to #Facebook's Ad Library, the company spent $800,000 on FB ads in March, targeting fathers of school-age kids who like Hershey's, #UltimateFighting, hunting or #JohnnyCash:
https://pluralistic.net/jeremys-targeting
Anti-woke razors are an objectively, hilariously stupid idea, but that's not the point here.
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The point is that Jeremy's has to spend $800K/month to reach its customers, which means that it either has to accept $800K less in profits, or make it up by charging more and/or skimping on quality.
#TargetedAdvertising is *incredibly* expensive, and incredibly lucrative - for the #AdTech platforms that sit between creative workers and media companies on one side, and audiences on the other.
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In order to target ads, ad-tech has to collect deep, nonconsensual dossiers on every user, full of personal, sensitive and potentially compromising information.
The switch to targeted ads was part of the #enshittification cycle, whereby companies like Facebook and #Google lured in users by offering high-quality services - FB showed you the things the users you asked to hear from posted, and Google returned the best results it could.
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Eventually, those users became locked in. Once all our friends were on Facebook, we held each other hostage, each unable to leave because the others were there. Google used its access to the capital markets to snuff out any rival search companies, spending tens of billions every year to be the default on #Apple devices, for example.
Once we were locked in, the tech giants made life worse for us in order to make life better for media companies and advertisers.
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FB violated its promise to be the privacy-centric alternative to #Myspace, where our data would never be harvested; it switched on surveillance and created cheap, accurate ad-targeting:
https://lawcat.berkeley.edu/record/1128876?ln=en
Google fulfilled the prophecy in its founding document, the #PagerankPaper: "advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers." They offered cheap, highly targeted ads:
http://infolab.stanford.edu/~backrub/google.html
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Facebook and Google weren't just kind to advertisers - they also gave media companies and creative workers a great deal, funneling vast quantities of traffic to both. Facebook did this by cramming media content into the feeds of people who hadn't asked to see it, displacing the friends' posts they *had* asked to see. Google did it by upranking media posts in search results.
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Then we came to the final stage of the enshittification cycle: having hooked both end-users and business customers, Facebook and Google withdrew the surpluses from both groups and handed them to their own shareholders. Advertising costs went up. The share of ad income paid to media companies went down. Users got more ads in their feeds and search results.
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Facebook and Google illegally colluded to rig the ad-market with a program called #JediBlue that let the companies steal from both advertisers and media companies:
https://techcrunch.com/2022/03/11/google-meta-jedi-blue-eu-uk-antitrust-probes/
Apple blocked Facebook's surveillance on its mobile devices, but increased its own surveillance of #Iphone and #Ipad users in order to target ads to them, even when those users explicitly opted out of spying:
https://pluralistic.net/2022/11/14/luxury-surveillance/#liar-liar
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Today, we live in the enshittification end-times, red of tooth and claw, where media companies' revenues are dwindling and advertisers' costs are soaring. The tech giants are raking in hundreds of billions, firing hundreds of thousands of workers, and pissing away tens of billions on stock buybacks:
https://doctorow.medium.com/mass-tech-worker-layoffs-and-the-soft-landing-1ddbb442e608
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As Angwin points out, in the era before behavioral advertising, Jeremy's might have bought an ad in *Deer & Deer Hunting* or another magazine that caters to he-man types who don't want woke razors; the same is true for *all* products and publications. Before mass, non-consensual surveillance, ads were based on *content* and *context*, not on the reader's prior behavior.
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There's no reason that ads today couldn't return to that regime. Contextual ads operate without surveillance, using the same "real-time bidding" mechanism to place ads based on the content of the article and some basic parameters about the user (rough location based on IP address, time of day, device type):
https://pluralistic.net/2020/08/05/behavioral-v-contextual/#contextual-ads
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Context ads perform about as well as behavioral ads - but they have a radically different power-structure. No media company will ever know as much about a given user as an ad-tech giant practicing dragnet surveillance and buying purchase, location and finance data from data-brokers. But no ad-tech giant knows as much about the context and content of an article as the media company that published it.
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Context ads are, by definition, centered on the media company or creative worker whose work they appear alongside of. They are *much* harder for tech giants to enshittify, because enshittification requires lock-in and it's hard to lock in a publication who knows better than anyone what they're publishing and what it means.
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We should ban surveillance advertising. Period. Companies should not be allowed to collect our data without our meaningful opt-in consent, and if that was the standard, there would be no data-collection:
https://pluralistic.net/2022/03/22/myob/#adtech-considered-harmful
Remember when Apple created an opt *out* button for tracking, more than 94 percent of users clicked it (the people who clicked "yes" to "can Facebook spy on you?" were either Facebook employees, or confused):
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Ad-targeting enables a host of evils, like paid political disinformation. It also leads to more expensive, lower-quality goods. "A Raw Deal For Consumers," Sumit Sharma's new #ConsumerReports paper, catalogs the many other costs imposed on Americans due to the lack of tech regulation:
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Sharma describes the benefits that Europeans will shortly enjoy thanks to the EU's #DigitalMarketsAct and #DigitalServicesAct, from lower prices to more privacy to more choice, from cloud gaming on mobile devices to competing app stores.
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However, both the EU and the US - as well as Canada and Australia - have focused their news industry legislating on misguided #LinkTaxes, where tech giants are required to pay license fees to link to and excerpt the news. This is an approach grounded in the mistaken idea that tech giants are stealing media companies' content - when really, tech giants are stealing their *money*:
https://pluralistic.net/2022/04/18/news-isnt-secret/#bid-shading
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Creating a new pseudocopyright to control who can discuss the news is a terrible idea, one that will make the media companies beholden to the tech giants at a time when we desperately need deep, critical reporting on the tech sector. In Canada, where #BillC18 is the latest link tax proposal in the running to become law, we're already seeing that conflict of interest come into play.
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As #JesseBrown and @Paulatics - veteran reporter turned senator - discuss on #Canadaland, the #TorontoStar's sharp critical series on the tech giants died a swift, unexplained death after the *Star* began receiving license fees for tech users' links:
https://www.canadaland.com/paula-simons-bill-c-18/
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Meanwhile, in #Australia, the #NewsBargainingCode stampeded tech giants into "voluntary" negotiations with the media companies, allowing #RupertMurdoch's #Newscorp to claim the lion's share, and then conduct layoffs across its newsrooms.
While in #France, the link tax depends on publishers integrating with #GoogleShowcase, a product that makes Google *more* money from news content and makes news publishers *more* dependent on Google:
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A link tax only pays for so long as the tech giants remain dominant and continue to extract the massive profits that make them capable of paying the tax. But legislative action to fix the ad-tech markets, like #MikeLee's ad-tech breakup bill (cosponsored by both #TedCruz *and* #ElizabethWarren!) would shift power to publishers, and with it, money:
https://www.lee.senate.gov/2023/3/the-america-act
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Sen. Mike Lee (R-UT), joined by Sens. Amy Klobuchar (D-MN), Ted Cruz (R-TX), Richard Blumenthal (D-CT), Marco Rubio (R-FL), Elizabeth Warren (D-MA), Eric Schmitt (R-MO), Josh Hawley (R-MO), Lindsey Graham (R-SC), JD Vance (R-OH), and John Kennedy (R-LA), introduced the Advertising Middlemen Endangering Rigorous Internet Competition Accountability (AMERICA) Act. The bill would restore and protect competition in digital advertising by eliminating conflicts of interest that have allowed the leading platforms in the market to manipulate ad auctions and impose monopoly rents on a broad swath of the American economy.
With ad-tech intermediaries scooping up 50% or more of every advertising dollar, there is plenty of potential to save news without the need for a link tax. If unrigging the ad-tech market drops the platforms' share of advertising dollars to a more reasonable 10%, then the advertisers and publishers could split the remainder, with advertisers spending 20% less and publishers netting 20% *more*.
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Passing a federal privacy law would end surveillance advertising at the stroke of a pen, shifting the market to context ads that let publishers, not platforms, call the shots. As an added bonus, the law would stop #Tiktok from spying on Americans, and also end Google, Facebook, Apple and Microsoft's spying to boot:
https://pluralistic.net/2023/03/30/tik-tok-tow/#good-politics-for-electoral-victories
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Mandating competition in app stores - as the Europeans are poised to do - would kill Google and Apple's 30% "app store tax" - the percentage they rake off of every transaction from every app on Android and Ios. Drop that down to the 2-5% that the credit cards charge, and every media outlet's revenue-per-subscriber would jump by 25%.
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Add to that an #EndToEnd rule for tech requiring them to deliver updates from willing receivers to willing senders, thus newsletter you subscribed to would stay out of your spam folder and every post by the media you followed shows up in your feed:
https://pluralistic.net/2022/12/10/e2e/#the-censors-pen
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That would make it end tech giants' sleazy enshittification gambit of forcing creative workers and media companies to pay to "boost" their content (or pay $8/month for a #BlueTick) just to get it in front of the people who asked to see it:
https://doctorow.medium.com/twiddler-1b5c9690cce6
The point of enshittification is that it's bad for everyone *except* the shareholders of tech monopolists. Jeremy's Razors are bad, winning a 2.7 star rating out of five:
https://www.facebook.com/JeremysRazors/reviews
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The company charges more for these substandard razors, and you are more likely to find out about them, because of targeted, behavioral ads. These ads starve media companies and creative workers and make social media and search results *terrible*.
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A link tax depends on #BigTech staying big, dribbling a few crumbs for media companies, compromising their ability to report on their deep-pocketed beneficiaries, in a way that advantages the biggest media companies and leaves small, local and independent press in the cold.
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By contrast, a privacy law, ad-tech breakups, app-store competition and end-to-end delivery would shatter the power of Big Tech and shift power to users, creative workers and media companies. These are solutions that don't just keep working if Big Tech goes away - they actually hasten that demise! What's more, they work just as well for big companies as they do for independents.
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Whether you're the *Times* or you're an ex-*Times* reporter who's quit your job and now crowdfunds to cover your local school board and town council meetings, shifting *control* and the *share of income* is will benefit you, whether or not Big Tech is still in the picture.
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Image:
freeimageslive.co.uk (modified)
http://www.freeimageslive.co.uk/free_stock_image/using-mobile-phone-jpg
CC BY 3.0
https://creativecommons.org/licenses/by/3.0/
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Cory Doctorow
