What Is to Be Done About the Ad-Based Internet economy?

This is a good interview with author Douglas Rushkoff about his new book, “Team Human.” He says things we are talking about here and is being discussed in books, articles, etc - and is a big driver of this IoH/NGI project. But Doug is a clear thinking, plain speaking guy, who, like many of us, was a true believer for a long time until we have watched our rather rosy view of the digital future become clouded. This interview adds to our understanding of the problem I think.

pushed it to my e-reader for later today. Thanks for linking it!

This isn’t a solution to moving away from the ad-based internet economy, but it surely seems to be a nice niche tool to not having to see those ads (if it at least ensures it can’t be detected by the websites):

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If enough ads got blocked then maybe other business models could emerge. But then, I am someone who has routinely for decades hit the mute button when the ads come on. I always figure that nobody would want to hear them. But at times when I have done that, some in the room actually objected because they wanted to hear the ads. And one time I was told that it is wrong for me to do that because it is my obligation to listen and watch them in exchange for seeing the content. I can see that argument, but how else does one control his or her immediate environment? Furthermore, cable news was sold to us all as an ad-free service since we have to pay for it. But that isn’t how it turned out.

I’m not sure if you are following the Edgeryders festival, but I’m hosting an event on the topic of open source many of you should join on the 28:th november in Stockholm.

“Dont leave the future of internet in the hands of the proprietary software” =)

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@erik_lonroth I am not in Stockholm. But this is really great work, thank you so much. It means a lot :slight_smile:

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“Mozilla is no longer fighting for market share of its browser: it is fighting for the future of the web,” writes the Guardian, citing Mozilla Project co-founder Mitchell Baker: Baker’s pitch is that only Mozilla is motivated, first and foremost, to make using the web a pleasurable experience. Google’s main priority is to funnel user data into the enormous advertising engine that accounts for most of its revenue. Apple’s motivation is to ensure that customers continue to buy a new iPhone every couple of years and don’t switch to Android…"

https://m.slashdot.org/story/363540

It could be argued that the greatest social benefit that came from America Online’s fairly brief reign over the online world was their acquiring Netscape when it went on the sales block, and then, when it was clear that they were buying the talent more than the software (something they did pretty often actually), releasing the Netscape source code. This became the basis for Mozilla (which had been the name of the netscape mascot).

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Hi folks, I’m a digital ethnographer for the NGI Forward team. It’ been really interesting to follow everyone’s discussion in this thread around advertising and the attention economy as the Internet’s business model and how it exacerbates surveillance and information capitalism.

Just saw that this year’s Mozilla Fellows Harriet Kingaby and Frederike Kaltheunejust published a policy brief on this very topic so thought I’d share: “Ad break: The Race to regulate digital advertising and fix online spaces” If you want a quick outline, you can check out summary Twitter thread here.

Thought I’d share a small bit from the executive summary for the policy nerds in the group:

In this policy brief, we will argue that digital advertising – the business model that underpins most of the internet as we know it today – fails to support or sustain healthy digital spaces that are fit for purpose for the majority of people. The nature of contemporary digital advertising and its practices are at the core of some of the most pressing challenges facing societies today, from widespread and routine invasions of consumer protection and fundamental rights, to the funding of hate and misinformation. As a result, Europe’s chance at forging its own vision for the digital world hinges on its ability to regulate and ultimately fix an industry that has become unsustainable, especially as we are moving towards a world of AI and the Internet of Things (IoT) where online and offline environments become increasingly entwined. As it stands however, Europe lacks an overarching vision on how its digital strategy relates to online advertising. The Digital Services Act, the White Paper on AI, the Democracy Action Plan, the reform of the ePrivacy Direction, and the Commission’s plans for enforcing competition in digital markets all address some aspects of the online advertising ecosystem. But there is a real risk that these separate initiatives will either lead to incoherent rules or that they will fail to address the core harms and risks associated with online advertising as we know it today.

If you have a moment to look at this, do these diagnoses and recommendations speak to your experience of navigating targeted advertising?

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Thanks very much for this.

Given that the Internet has a strong winner-take-all tendency regardless of pay model, I do wonder if it is the ad model that is the core of the problem. Would there be less surveillance, profiling, trickery and other manipulations if everything were subscription or a direct pay model?

One example that comes to mind is the Habbo Hotel “chain” of online game environments where you have an animated avatar stand in for yourself. It is free to use and they make money by selling stuff to you and making the games and social status center around the stuff they sell. But they bombard you with sales pitches. But, do they surveil as much as the giants like Facebook? I’m sure they don’t. But then they couldn’t afford it.

Staying on the winner-take-all theme, I would argue that the size of the companies doing the surveilling portrayed in their paper, is as big a factor than any other, perhaps bigger. They have the money to hire the best talent. They can constantly refine every aspect of the service. They can spend the most on lobbying to make regulation as advantageous to them as possible. And they can successfully use tactics to reduce competitors market share.

Since their service gets better and their network of cohorts grows, the “stickiness,” to use an old term, increases. The tradeoffs improve from the consumer perspective.

Part of that of course is nobody really knows the full extent of what is being gathered in any given moment. all they might see is a denial until they turn off their ad blocker. Even then you wouldn’t really know what was going on behind the curtain.

What to do about it? The EU focuses a lot of privacy and one knowing and controlling their data. But I would put anti-trust into the mix.

I’m reading the paper now. It is thorough and well written. I recommend reading the paper itself rather than just the Twitter feed, although that has a bunch of good references too.

And they do touch on market dominance. My main takeaway from it is how unaccountable thew whole system is. Someone might know enough to be pulling many if not most of the strings, but there is no way to find out.

It’s been said that we are now in the era of internet regulation, and all of the solutions proposed in this paper are regulatory in nature. I hope that the EC takes these recommendations into account. It seems that regulation and its enforcement is pretty much the only tool the EU has to determine the future of the Internet ad its effect on people. I think that the EC and NGI would most love to have some technical solutions show up that are European created and incorporate the EU’s privacy and data right into the design. But the odds of that are pretty low, so best to stick with regulation. It will take much fortitude to get it done.

@JollyOrc, we know you are quite busy these days, but @katejsim from our ethnographic research team has worked through this thread that you started a lot and above you can find here resulting comments and questions. I thought this might be interesting for you to look into and maybe react to :slight_smile:

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After a first reading, I must say: Very much so.

There is one sentiment in there that I need to comment, courtesy of my dayjob at polypoly.coop: Your policy brief states that Step 1 should be to

I think I would want to rephrase that we need to

What the heck do I mean with that?

A lot of the data that I generate is not only highly useful for the surveillance capitalism, but also to me personally. My digital assistants get a lot smarter, I can examine my habits and thus have a better life. The important part though is that all this needs to be my data, not Googles or Facebooks data.

Companies will always have a legitimate interest in using personal data to serve us better or more interesting products. But that doesn’t meant that they should keep that data, or use it without our explicit and actually informed consent. That means that the systems need to become a lot more human-friendly, and the infrastructure should support oversight and watchdog organisations right from the ground up.

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ping @erik_lonroth, your view on the comments and questions raised by @katejsim above would also be very interesting :). This is also a good example feedback and questions developed through the SSNA, which is relevant to the conversation we had regarding the opensource teaching resource development inside the plate project, but that is a different discussion, so let’s not have it here, but yes, what does your open source mind say to the development of this conversations and topic at this point?

and also how would you position the open source business models realistically in this context with @JollyOrc 's comment?

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OMG. I have spent so much time in this domain and intersection of many philosophies on freedom, legislation, systems and and how our digital world has put it all to the extreme.

It’s hard to cover that all in a post here. I would rather have a discussion with interested participants such as @katejsim if we are going to have a chance to get even close to the pressing issues that this post entail.

In general - we are running in circles in legislation since we fail collectively to address fundamental systematic flaws in our institutions (and in some cases even our constitutional). Some of these fundamental flaws I argue, prevents us currently from talking about, form solid opinions about and ultimately form up reasonable conclusions and legislation about on many of these pressing issues on how ads (and related topics) affects our lives.

Ping @katjab

Seems like NESTA would find this paper useful.

Has anyone else seen this article on the Ad tech economic bubble and its wider implications?

" Hwang’s new book, Subprime Attention Crisis , lays out the case that the new ad business is built on a fiction. Microtargeting is far less accurate, and far less persuasive, than it’s made out to be, he says, and yet it remains the foundation of the modern internet: the source of wealth for some of the world’s biggest, most important companies, and the mechanism by which almost every “free” website or app makes money. If that shaky foundation ever were to crumble, there’s no telling how much of the wider economy would go down with it."

Curious what others think about it

I forget where right at this moment but just a few days ago I ran past another writer making the same argument that microtargeting is not, and never was, accurate, and is essentially snake oil.

To counter that, I also read someplace that most of Facebook’s revenue comes not from big advertisers but from quite small operations looking mainly in their own geographic regions. I don’t know how micro the targeting gets, but ads like “women who love pets who live in these counties” do seem to get better results. So I am told. This is why, when a bunch of the big companies like Ford threatened to boycott Facebook (and maybe they ewven did boycott), Facebook wasn’t all that bothered by it to the point of actually changing their policy.

The following is from a newsletter I receive regularly from tech analyst Benedict Evans. It’s worth reading if you are interested in this subject because it describes sea changes occurring in this field.

" Apple, Fedex and the cookie apocalypse

We’re now a couple of weeks into Apple’s latest iOS privacy move. If you want to track users between apps and the web, or from an ad through the app store to an install, then you need to ask permission and Apple has deliberately framed the question such that almost no-one will say yes. On some reports, CPMs are already down by half.

We could spend a lot of time arguing about the rights and wrongs of privacy and Apple’s framing and steering and use of its market dominance, but it’s probably more useful to point out that all Apple has really done is implement the EU and California’s cookie laws - ‘but in apps’. Step up another level, and this reflects a pretty broad shift in attitudes towards privacy in general and the huge inverted pyramid of complexity and nonsense of third party ad tracking in particular. Chrome and Safari are turning third party cookies off anyway. The cookie apocalypse is upon us and the tracking model of the last 25 years is going away.

What happens next? No-one in advertising quite knows. There are dozens of different projects for new ‘private’ ways to track users across different sites with different identity or logged-in models, but the most interesting remains Google’s FLoC, in which the browser analyses your behaviour and puts you into (mostly) anonymous, interest-based cohorts. The publisher can ask for a cohort and show you ads, but your actual activity never leaves your device. Apple does more or less the same thing on iOS in its News and Stocks apps, except that Apple also serves the ads and displays the content, so the underlying publishers see nothing at all (except a wire transfer). I think it’s very likely that Apple is looking at offering this in third-party apps and in Safari as well. So, Apple and Google want to move the tracking from the server to the client, and to one company with one point for the user to control instead of disaggregation across hundreds of publishers and ad-tech companies.

There’s a bunch of reasons why this might not work, not least that no-one except Google and Apple want Google and Apple to have that much control over publishing and advertising. But it’s also worth stepping up another level again, and asking what advertisers are trying to do, anyway. People say ‘privacy’ so often that one can lose sight of the fact that advertisers don’t care who you are - they just want to show ads to people that might be interested in them, and not to show ads to people who won’t be interested. They don’t want to ‘violate your privacy’ - they want to show diaper ads to parents, car ads to people who want a car and watch ads to rich people.

Before the internet, that meant car ads in car magazines and watch ads in the Economist. Ads were based on context, and on inferring the audience from the context. The internet gave advertisers the opposite axis - it let them show ads based on the reader instead of the page. One side-effect of this was relocation of value - you can target an Economist reader a week later on a different website. If FLoC works, you can still do that. But the counter-case is that the value gets re-concentrated in the places with the highest value context, rather than following the high-value readers around the web. It also gets re-concentrated in places with first party data. We will not be able to track you across different web sites, but we can still track you inside the same website, if it has lots of content and you spend lots of time there - Instagram or Facebook, but also the New York Times or the Guardian. The strong get stronger, which of course is the great tech policy trade-off - privacy versus competition.

The publisher, meanwhile cares about neither the ads nor your web browsing history, but about the money, and the harder the ad business has become, the more that publishers have shifted emphasis to pay walls, memberships and commerce. When those publishers are in the news business, this is another trade-off - pay walls conflict with reach and public purpose, and again they tend to work best for the strongest. But way beyond news, if ATT/IDFA really does halve the CPMs, a lot more apps might have to change their business models. How many apps are funded by ads that won’t work so well now, and how many were using ads as the best way to acquire users and will have to find a new way to do that?

Now, step up one more level again: why were brands buying ads anyway? Well, to reach a consumer, and how else are they doing that? The joke in D2C for a while now has been that ‘rent is the new CAC’. Should you spend your acquisition budget on ad networks, or Instagram… or on same-day shipping, a pop-up shop in the right part of Manhattan or London, or 100 shops, or free returns? Before the internet you couldn’t choose between shops or ads, but now that’s all the same algebra - how do you reach and serve a customer? If the cookie apocalypse resets the numbers for display, that money can go to search, but it can also go to Fedex or landlords. Which lever do you pull? The entire ad privacy fight is one moving part in a debate about how you reach your customers and how you spend a total of, perhaps, $7-800bn in the USA alone each year."